S.F. No. 2346 Summary

• Exempts compensation earned by qualifying nonresident individuals for employment duties performed in Minnesota from Minnesota state income tax, subject to specified limitations.

• Qualifies nonresident individuals whose residence is in another state, work in Minnesota 30 or fewer days per tax year (excluding entertainer duties), perform employment duties in multiple states, and whose home state provides substantially similar tax treatment.

• Exempts qualifying nonresident employees from Minnesota income tax withholding and filing requirements, but requires full withholding if the employee exceeds 30 days of work in Minnesota during the tax year.

• Protects employers from penalties and interest if they relied on either a time and attendance system or reasonable employer records and employee representations when determining withholding obligations, provided no fraud or collusion occurred.

• Effective for taxable years beginning after December 31, 2023.