MN SF2585

Minnesota's corporate franchise tax rate of 9.8% would be reduced by 0.312 percentage points each time two conditions are met: the budget surplus equals or exceeds the net revenue reduction from the rate cut, and the tax incidence report shows over 70% of the corporate franchise tax is passed on to consumers.

The corporate franchise tax rate cannot be reduced below a floor of 8.24%, allowing for a maximum total reduction of 1.56 percentage points from the current 9.8% rate.

The Commissioner of Revenue must publish notice of any rate reduction by December 31, with the new rate taking effect for taxable years beginning after that date.

"Budget surplus" is defined as the positive unrestricted general fund balance remaining after required transfers to the budget reserve account.

Effective for taxable years beginning after December 31, 2025.