Bill Text: MN HF665 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Corporate franchise taxation; foreign source income preferences eliminated, subtraction for foreign royalties repealed, domestic corporation definition expanded to include certain foreign corporations incorporated in or doing business in tax havens, and foreign operating corporations repealed.
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Introduced - Dead) 2012-04-30 - Author stricken Greene [HF665 Detail]
Download: Minnesota-2011-HF665-Introduced.html
1.2relating to taxation; corporate franchise; eliminating the preferences for foreign
1.3source income; repealing the subtraction for foreign royalties; expanding the
1.4definition of domestic corporations to include certain foreign corporations
1.5incorporated in or doing business in tax havens; repealing foreign operating
1.6corporations; amending Minnesota Statutes 2010, sections 289A.08, subdivision
1.73; 290.01, subdivisions 5, 19c, 19d, by adding a subdivision; 290.17, subdivision
1.84; repealing Minnesota Statutes 2010, sections 290.01, subdivision 6b; 290.0921,
1.9subdivision 7.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2010, section 289A.08, subdivision 3, is amended to
1.12read:
1.13 Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
1.14tax under section290.014, subdivision 5 , must file a return, except that a foreign operating
1.15corporation as defined in section
290.01, subdivision 6b, is not required to file a return.
1.16(b) Members of a unitary business that are required to file a combined report on one
1.17return must designate a member of the unitary business to be responsible for tax matters,
1.18including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
1.19or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
1.20taxes lawfully due. The designated member must be a member of the unitary business that
1.21is filing the single combined report and either:
1.22(1) a corporation that is subject to the taxes imposed by chapter 290; or
1.23(2) a corporation that is not subject to the taxes imposed by chapter 290:
1.24(i) Such corporation consents by filing the return as a designated member under this
1.25clause to remit taxes, penalties, interest, or additions to tax due from the members of the
1.26unitary business subject to tax, and receive refunds or other payments on behalf of other
2.1members of the unitary business. The member designated under this clause is a "taxpayer"
2.2for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
2.3on the unitary business under this chapter and chapter 290.
2.4(ii) If the state does not otherwise have the jurisdiction to tax the member designated
2.5under this clause, consenting to be the designated member does not create the jurisdiction
2.6to impose tax on the designated member, other than as described in item (i).
2.7(iii) The member designated under this clause must apply for a business tax account
2.8identification number.
2.9(c) The commissioner shall adopt rules for the filing of one return on behalf of the
2.10members of an affiliated group of corporations that are required to file a combined report.
2.11All members of an affiliated group that are required to file a combined report must file one
2.12return on behalf of the members of the group under rules adopted by the commissioner.
2.13(d) If a corporation claims on a return that it has paid tax in excess of the amount of
2.14taxes lawfully due, that corporation must include on that return information necessary for
2.15payment of the tax in excess of the amount lawfully due by electronic means.
2.16EFFECTIVE DATE.This section is effective for returns filed for taxable years
2.17beginning after December 31, 2010.
2.18 Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 5, is amended to read:
2.19 Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
2.20means a corporation:
2.21(1) created or organized in the United States, or under the laws of the United States
2.22or of any state, the District of Columbia, or any political subdivision of any of the
2.23foregoing but not including the Commonwealth of Puerto Rico, or any possession of
2.24the United States;
2.25(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
2.26Code;or
2.27(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code.;
2.28 (4) which is incorporated in a tax haven;
2.29 (5) which is engaged in activity in a tax haven sufficient for the tax haven to impose
2.30a net income tax under United States constitutional standards and section 290.015, and
2.31which reports that 20 percent or more of its income is attributable to business in the tax
2.32haven; or
2.33 (6) which has the average of its property, payroll, and sales factors, as defined under
2.34section 290.191, within the 50 states of the United States and the District of Columbia of
2.3520 percent or more.
3.1EFFECTIVE DATE.This section is effective for returns filed for taxable years
3.2beginning after December 31, 2010.
3.3 Sec. 3. Minnesota Statutes 2010, section 290.01, is amended by adding a subdivision
3.4to read:
3.5 Subd. 5c. Tax haven. (a) "Tax haven" means the following foreign jurisdictions,
3.6unless the listing of the jurisdiction does not apply under paragraph (b):
3.7(1) Andorra;
3.8(2) Anguilla;
3.9(3) Antigua and Barbuda;
3.10(4) Aruba;
3.11(5) Bahamas;
3.12(6) Bahrain;
3.13(7) Belize;
3.14(8) British Virgin Islands;
3.15(9) Cayman Islands;
3.16(10) Cook Islands;
3.17(11) Costa Rica;
3.18(12) Dominica;
3.19(13) Gibraltar;
3.20(14) Grenada;
3.21(15) Guernsey-Sark-Alderney;
3.22(16) Jersey;
3.23(17) Jordan;
3.24(18) Lebanon;
3.25(19) Liberia;
3.26(20) Liechtenstein;
3.27(21) Maldives;
3.28(22) Marshall Islands;
3.29(23) Monaco;
3.30(24) Montserrat;
3.31(25) Nauru;
3.32(26) Netherlands Antilles;
3.33(27) Niue;
3.34(28) Panama;
3.35(29) St. Kitts and Nevis;
4.1(30) St. Lucia;
4.2(31) St. Vincent and Grenadines;
4.3(32) Tonga;
4.4(33) Turks and Caicos; and
4.5(34) Vanuatu.
4.6(b) A foreign jurisdiction's listing under paragraph (a) does not apply to the first
4.7taxable year after the United States enters into a tax treaty or other agreement with the
4.8foreign jurisdiction that provides for prompt, obligatory, and automatic exchange of
4.9information with the United States government relevant to enforcing the provisions of
4.10federal tax laws and the treaty or other agreement was in effect for the taxable year.
4.11EFFECTIVE DATE.This section is effective for returns filed for taxable years
4.12beginning after December 31, 2010.
4.13 Sec. 4. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
4.14 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
4.15there shall be added to federal taxable income:
4.16 (1) the amount of any deduction taken for federal income tax purposes for income,
4.17excise, or franchise taxes based on net income or related minimum taxes, including but not
4.18limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
4.19another state, a political subdivision of another state, the District of Columbia, or any
4.20foreign country or possession of the United States;
4.21 (2) interest not subject to federal tax upon obligations of: the United States, its
4.22possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
4.23state, any of its political or governmental subdivisions, any of its municipalities, or any
4.24of its governmental agencies or instrumentalities; the District of Columbia; or Indian
4.25tribal governments;
4.26 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
4.27Revenue Code;
4.28 (4) the amount of any net operating loss deduction taken for federal income tax
4.29purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
4.30deduction under section 810 of the Internal Revenue Code;
4.31 (5) the amount of any special deductions taken for federal income tax purposes
4.32under sections 241 to 247 and 965 of the Internal Revenue Code;
4.33 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
4.34clause (a), that are not subject to Minnesota income tax;
5.1 (7) the amount of any capital losses deducted for federal income tax purposes under
5.2sections 1211 and 1212 of the Internal Revenue Code;
5.3 (8) the exempt foreign trade income of a foreign sales corporation under sections
5.4921(a) and 291 of the Internal Revenue Code;
5.5 (9) the amount of percentage depletion deducted under sections 611 through 614 and
5.6291 of the Internal Revenue Code;
5.7 (10) for certified pollution control facilities placed in service in a taxable year
5.8beginning before December 31, 1986, and for which amortization deductions were elected
5.9under section 169 of the Internal Revenue Code of 1954, as amended through December
5.1031, 1985, the amount of the amortization deduction allowed in computing federal taxable
5.11income for those facilities;
5.12 (11) for taxable years beginning before January 1, 2011, the amount of any deemed
5.13dividend from a foreign operating corporation determined pursuant to section290.17,
5.14subdivision 4 , paragraph (g). The deemed dividend shall be reduced by the amount of the
5.15addition to income required by clauses (20), (21), (22), and (23);
5.16 (12) the amount of a partner's pro rata share of net income which does not flow
5.17through to the partner because the partnership elected to pay the tax on the income under
5.18section 6242(a)(2) of the Internal Revenue Code;
5.19 (13) the amount of net income excluded under section 114 of the Internal Revenue
5.20Code;
5.21 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
5.22Revenue Code, for the taxable year when subpart F income is calculated without regard to
5.23the provisions of Division C, title III, section 303(b) of Public Law 110-343;
5.24 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
5.25and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
5.26has an activity that in the taxable year generates a deduction for depreciation under
5.27section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
5.28that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
5.29under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
5.30depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
5.31amount of the loss from the activity that is not allowed in the taxable year. In succeeding
5.32taxable years when the losses not allowed in the taxable year are allowed, the depreciation
5.33under section 168(k)(1)(A) and (k)(4)(A) is allowed;
5.34 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
5.35Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
5.36Revenue Code of 1986, as amended through December 31, 2003;
6.1 (17) to the extent deducted in computing federal taxable income, the amount of the
6.2deduction allowable under section 199 of the Internal Revenue Code;
6.3 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
6.4federal subsidies for prescription drug plans;
6.5 (19) the amount of expenses disallowed under section290.10, subdivision 2 ;
6.6 (20) for taxable years beginning before January 1, 2011, an amount equal to the
6.7interest and intangible expenses, losses, and costs paid, accrued, or incurred by any
6.8member of the taxpayer's unitary group to or for the benefit of a corporation that is a
6.9member of the taxpayer's unitary business group that qualifies as a foreign operating
6.10corporation. For purposes of this clause, intangible expenses and costs include:
6.11 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
6.12use, maintenance or management, ownership, sale, exchange, or any other disposition of
6.13intangible property;
6.14 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
6.15transactions;
6.16 (iii) royalty, patent, technical, and copyright fees;
6.17 (iv) licensing fees; and
6.18 (v) other similar expenses and costs.
6.19For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
6.20applications, trade names, trademarks, service marks, copyrights, mask works, trade
6.21secrets, and similar types of intangible assets.
6.22This clause does not apply to any item of interest or intangible expenses or costs paid,
6.23accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
6.24to such item of income to the extent that the income to the foreign operating corporation
6.25is income from sources without the United States as defined in subtitle A, chapter 1,
6.26subchapter N, part 1, of the Internal Revenue Code;
6.27 (21) for taxable years beginning before January 1, 2011, except as already included
6.28in the taxpayer's taxable income pursuant to clause (20), any interest income and income
6.29generated from intangible property received or accrued by a foreign operating corporation
6.30that is a member of the taxpayer's unitary group. For purposes of this clause, income
6.31generated from intangible property includes:
6.32 (i) income related to the direct or indirect acquisition, use, maintenance or
6.33management, ownership, sale, exchange, or any other disposition of intangible property;
6.34 (ii) income from factoring transactions or discounting transactions;
6.35 (iii) royalty, patent, technical, and copyright fees;
6.36 (iv) licensing fees; and
7.1 (v) other similar income.
7.2For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
7.3applications, trade names, trademarks, service marks, copyrights, mask works, trade
7.4secrets, and similar types of intangible assets.
7.5This clause does not apply to any item of interest or intangible income received or accrued
7.6by a foreign operating corporation with respect to such item of income to the extent that
7.7the income is income from sources without the United States as defined in subtitle A,
7.8chapter 1, subchapter N, part 1, of the Internal Revenue Code;
7.9 (22) for taxable years beginning before January 1, 2011, the dividends attributable to
7.10the income of a foreign operating corporation that is a member of the taxpayer's unitary
7.11group in an amount that is equal to the dividends paid deduction of a real estate investment
7.12trust under section 561(a) of the Internal Revenue Code for amounts paid or accrued by
7.13the real estate investment trust to the foreign operating corporation;
7.14 (23) for taxable years beginning before January 1, 2011, the income of a foreign
7.15operating corporation that is a member of the taxpayer's unitary group in an amount that
7.16is equal to gains derived from the sale of real or personal property located in the United
7.17States;
7.18 (24) the additional amount allowed as a deduction for donation of computer
7.19technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
7.20extent deducted from taxable income; and
7.21(25) discharge of indebtedness income resulting from reacquisition of business
7.22indebtedness and deferred under section 108(i) of the Internal Revenue Code.
7.23EFFECTIVE DATE.This section is effective for returns filed for taxable years
7.24beginning after December 31, 2010.
7.25 Sec. 5. Minnesota Statutes 2010, section 290.01, subdivision 19d, is amended to read:
7.26 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
7.27corporations, there shall be subtracted from federal taxable income after the increases
7.28provided in subdivision 19c:
7.29 (1) the amount of foreign dividend gross-up added to gross income for federal
7.30income tax purposes under section 78 of the Internal Revenue Code;
7.31 (2) the amount of salary expense not allowed for federal income tax purposes due to
7.32claiming the work opportunity credit under section 51 of the Internal Revenue Code;
7.33 (3) any dividend (not including any distribution in liquidation) paid within the
7.34taxable year by a national or state bank to the United States, or to any instrumentality of
8.1the United States exempt from federal income taxes, on the preferred stock of the bank
8.2owned by the United States or the instrumentality;
8.3 (4) amounts disallowed for intangible drilling costs due to differences between
8.4this chapter and the Internal Revenue Code in taxable years beginning before January
8.51, 1987, as follows:
8.6 (i) to the extent the disallowed costs are represented by physical property, an amount
8.7equal to the allowance for depreciation under Minnesota Statutes 1986, section290.09,
8.8subdivision 7 , subject to the modifications contained in subdivision 19e; and
8.9 (ii) to the extent the disallowed costs are not represented by physical property, an
8.10amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
8.11290.09, subdivision 8
;
8.12 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
8.13Internal Revenue Code, except that:
8.14 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
8.15capital loss carrybacks shall not be allowed;
8.16 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
8.17a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
8.18allowed;
8.19 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
8.20capital loss carryback to each of the three taxable years preceding the loss year, subject to
8.21the provisions of Minnesota Statutes 1986, section290.16 , shall be allowed; and
8.22 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
8.23a capital loss carryover to each of the five taxable years succeeding the loss year to the
8.24extent such loss was not used in a prior taxable year and subject to the provisions of
8.25Minnesota Statutes 1986, section290.16 , shall be allowed;
8.26 (6) an amount for interest and expenses relating to income not taxable for federal
8.27income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
8.28expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
8.29291 of the Internal Revenue Code in computing federal taxable income;
8.30 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
8.31which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
8.32reasonable allowance for depletion based on actual cost. In the case of leases the deduction
8.33must be apportioned between the lessor and lessee in accordance with rules prescribed
8.34by the commissioner. In the case of property held in trust, the allowable deduction must
8.35be apportioned between the income beneficiaries and the trustee in accordance with the
9.1pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
9.2of the trust's income allocable to each;
9.3 (8) for certified pollution control facilities placed in service in a taxable year
9.4beginning before December 31, 1986, and for which amortization deductions were elected
9.5under section 169 of the Internal Revenue Code of 1954, as amended through December
9.631, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
9.71986, section290.09, subdivision 7 ;
9.8 (9) amounts included in federal taxable income that are due to refunds of income,
9.9excise, or franchise taxes based on net income or related minimum taxes paid by the
9.10corporation to Minnesota, another state, a political subdivision of another state, the
9.11District of Columbia, or a foreign country or possession of the United States to the extent
9.12that the taxes were added to federal taxable income under section290.01, subdivision 19c ,
9.13clause (1), in a prior taxable year;
9.14 (10) for taxable years beginning before January 1, 2011, 80 percent of royalties,
9.15fees, or other like income accrued or received from a foreign operating corporation
9.16or a foreign corporation which is part of the same unitary business as the receiving
9.17corporation, unless the income resulting from such payments or accruals is income from
9.18sources within the United States as defined in subtitle A, chapter 1, subchapter N, part
9.191, of the Internal Revenue Code;
9.20 (11) income or gains from the business of mining as defined in section290.05,
9.21subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
9.22 (12) the amount of disability access expenditures in the taxable year which are not
9.23allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
9.24 (13) the amount of qualified research expenses not allowed for federal income tax
9.25purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
9.26the amount exceeds the amount of the credit allowed under section290.068 ;
9.27 (14) the amount of salary expenses not allowed for federal income tax purposes due
9.28to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
9.29Code;
9.30 (15) for a corporation whose foreign sales corporation, as defined in section 922
9.31of the Internal Revenue Code, constituted a foreign operating corporation during any
9.32taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
9.33claiming the deduction under section290.21, subdivision 4 , for income received from
9.34the foreign operating corporation, an amount equal to1.23 multiplied by the amount of
9.35income excluded under section 114 of the Internal Revenue Code, provided the income is
9.36not income of a foreign operating company;
10.1 (16) any decrease in subpart F income, as defined in section 952(a) of the Internal
10.2Revenue Code, for the taxable year when subpart F income is calculated without regard to
10.3the provisions of Division C, title III, section 303(b) of Public Law 110-343;
10.4 (17) in each of the five tax years immediately following the tax year in which an
10.5addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
10.6the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
10.7amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
10.8resulting delayed depreciation cannot be less than zero;
10.9 (18) in each of the five tax years immediately following the tax year in which an
10.10addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
10.11the amount of the addition; and
10.12(19) to the extent included in federal taxable income, discharge of indebtedness
10.13income resulting from reacquisition of business indebtedness included in federal taxable
10.14income under section 108(i) of the Internal Revenue Code. This subtraction applies only
10.15to the extent that the income was included in net income in a prior year as a result of the
10.16addition under section290.01, subdivision 19c , clause (25).
10.17EFFECTIVE DATE.This section is effective for returns filed for taxable years
10.18beginning after December 31, 2010.
10.19 Sec. 6. Minnesota Statutes 2010, section 290.17, subdivision 4, is amended to read:
10.20 Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
10.21within this state or partly within and partly without this state is part of a unitary business,
10.22the entire income of the unitary business is subject to apportionment pursuant to section
10.23290.191
. Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
10.24business is considered to be derived from any particular source and none may be allocated
10.25to a particular place except as provided by the applicable apportionment formula. The
10.26provisions of this subdivision do not apply to business income subject to subdivision 5,
10.27income of an insurance company, or income of an investment company determined under
10.28section290.36 .
10.29(b) The term "unitary business" means business activities or operations which
10.30result in a flow of value between them. The term may be applied within a single legal
10.31entity or between multiple entities and without regard to whether each entity is a sole
10.32proprietorship, a corporation, a partnership or a trust.
10.33(c) Unity is presumed whenever there is unity of ownership, operation, and use,
10.34evidenced by centralized management or executive force, centralized purchasing,
10.35advertising, accounting, or other controlled interaction, but the absence of these
11.1centralized activities will not necessarily evidence a nonunitary business. Unity is also
11.2presumed when business activities or operations are of mutual benefit, dependent upon or
11.3contributory to one another, either individually or as a group.
11.4(d) Where a business operation conducted in Minnesota is owned by a business
11.5entity that carries on business activity outside the state different in kind from that
11.6conducted within this state, and the other business is conducted entirely outside the state, it
11.7is presumed that the two business operations are unitary in nature, interrelated, connected,
11.8and interdependent unless it can be shown to the contrary.
11.9(e) Unity of ownership is not deemed to exist when a corporation is involved unless
11.10that corporation is a member of a group of two or more business entities and more than 50
11.11percent of the voting stock of each member of the group is directly or indirectly owned
11.12by a common owner or by common owners, either corporate or noncorporate, or by one
11.13or more of the member corporations of the group. For this purpose, the term "voting
11.14stock" shall include membership interests of mutual insurance holding companies formed
11.15under section66A.40 .
11.16(f) The net income and apportionment factors under section290.191 or
290.20 of
11.17foreign corporations and other foreign entities which are part of a unitary business shall
11.18not be included in the net income or the apportionment factors of the unitary business.
11.19A foreign corporation or other foreign entity which is required to file a return under this
11.20chapter shall file on a separate return basis.The net income and apportionment factors
11.21under section
290.191 or
290.20 of foreign operating corporations shall not be included in
11.22the net income or the apportionment factors of the unitary business except as provided
11.23in paragraph (g). The legislature intends that the provisions of this paragraph are not
11.24severable from the provisions of section 290.01, subdivision 5, clauses (4) to (6), and if
11.25any of those provisions are found to be unconstitutional, the provisions of this paragraph
11.26are void for the respective taxable years.
11.27(g) The adjusted net income of a foreign operating corporation shall be deemed to
11.28be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
11.29proportion to each shareholder's ownership, with which such corporation is engaged in
11.30a unitary business. Such deemed dividend shall be treated as a dividend under section
11.31290.21, subdivision 4.
11.32Dividends actually paid by a foreign operating corporation to a corporate shareholder
11.33which is a member of the same unitary business as the foreign operating corporation shall
11.34be eliminated from the net income of the unitary business in preparing a combined report
11.35for the unitary business. The adjusted net income of a foreign operating corporation
11.36shall be its net income adjusted as follows:
12.1(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
12.2Rico, or a United States possession or political subdivision of any of the foregoing shall
12.3be a deduction; and
12.4(2) the subtraction from federal taxable income for payments received from foreign
12.5corporations or foreign operating corporations under section
290.01, subdivision 19d,
12.6clause (10), shall not be allowed.
12.7If a foreign operating corporation incurs a net loss, neither income nor deduction
12.8from that corporation shall be included in determining the net income of the unitary
12.9business.
12.10(h) (g) For purposes of determining the net income of a unitary business and the
12.11factors to be used in the apportionment of net income pursuant to section290.191 or
12.12290.20
, there must be included only the income and apportionment factors of domestic
12.13corporations or other domestic entitiesother than foreign operating corporations that are
12.14determined to be part of the unitary business pursuant to this subdivision, notwithstanding
12.15that foreign corporations or other foreign entities might be included in the unitary business.
12.16(i) (h) Deductions for expenses, interest, or taxes otherwise allowable under
12.17this chapter that are connected with or allocable against dividends, deemed dividends
12.18described in paragraph (g), or royalties, fees, or other like income described in section
12.19290.01, subdivision 19d, clause (10), shall not be disallowed.
12.20(j) (i) Each corporation or other entity, except a sole proprietorship, that is part of
12.21a unitary business must file combined reports as the commissioner determines. On the
12.22reports, all intercompany transactions between entities included pursuant to paragraph
12.23(h) (g) must be eliminated and the entire net income of the unitary business determined in
12.24accordance with this subdivision is apportioned among the entities by using each entity's
12.25Minnesota factors for apportionment purposes in the numerators of the apportionment
12.26formula and the total factors for apportionment purposes of all entities included pursuant
12.27to paragraph(h) (g) in the denominators of the apportionment formula.
12.28(k) (j) If a corporation has been divested from a unitary business and is included in a
12.29combined report for a fractional part of the common accounting period of the combined
12.30report:
12.31(1) its income includable in the combined report is its income incurred for that part
12.32of the year determined by proration or separate accounting; and
12.33(2) its sales, property, and payroll included in the apportionment formula must
12.34be prorated or accounted for separately.
12.35EFFECTIVE DATE.This section is effective for returns filed for taxable years
12.36beginning after December 31, 2010.
13.1 Sec. 7. REPEALER.
13.2Minnesota Statutes 2010, sections 290.01, subdivision 6b; and 290.0921, subdivision
13.37, are repealed.
13.4EFFECTIVE DATE.This section is effective for returns filed for taxable years
13.5beginning after December 31, 2010.
1.3source income; repealing the subtraction for foreign royalties; expanding the
1.4definition of domestic corporations to include certain foreign corporations
1.5incorporated in or doing business in tax havens; repealing foreign operating
1.6corporations; amending Minnesota Statutes 2010, sections 289A.08, subdivision
1.73; 290.01, subdivisions 5, 19c, 19d, by adding a subdivision; 290.17, subdivision
1.84; repealing Minnesota Statutes 2010, sections 290.01, subdivision 6b; 290.0921,
1.9subdivision 7.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2010, section 289A.08, subdivision 3, is amended to
1.12read:
1.13 Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
1.14tax under section
1.15
1.16(b) Members of a unitary business that are required to file a combined report on one
1.17return must designate a member of the unitary business to be responsible for tax matters,
1.18including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
1.19or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
1.20taxes lawfully due. The designated member must be a member of the unitary business that
1.21is filing the single combined report and either:
1.22(1) a corporation that is subject to the taxes imposed by chapter 290; or
1.23(2) a corporation that is not subject to the taxes imposed by chapter 290:
1.24(i) Such corporation consents by filing the return as a designated member under this
1.25clause to remit taxes, penalties, interest, or additions to tax due from the members of the
1.26unitary business subject to tax, and receive refunds or other payments on behalf of other
2.1members of the unitary business. The member designated under this clause is a "taxpayer"
2.2for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
2.3on the unitary business under this chapter and chapter 290.
2.4(ii) If the state does not otherwise have the jurisdiction to tax the member designated
2.5under this clause, consenting to be the designated member does not create the jurisdiction
2.6to impose tax on the designated member, other than as described in item (i).
2.7(iii) The member designated under this clause must apply for a business tax account
2.8identification number.
2.9(c) The commissioner shall adopt rules for the filing of one return on behalf of the
2.10members of an affiliated group of corporations that are required to file a combined report.
2.11All members of an affiliated group that are required to file a combined report must file one
2.12return on behalf of the members of the group under rules adopted by the commissioner.
2.13(d) If a corporation claims on a return that it has paid tax in excess of the amount of
2.14taxes lawfully due, that corporation must include on that return information necessary for
2.15payment of the tax in excess of the amount lawfully due by electronic means.
2.16EFFECTIVE DATE.This section is effective for returns filed for taxable years
2.17beginning after December 31, 2010.
2.18 Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 5, is amended to read:
2.19 Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
2.20means a corporation:
2.21(1) created or organized in the United States, or under the laws of the United States
2.22or of any state, the District of Columbia, or any political subdivision of any of the
2.23foregoing but not including the Commonwealth of Puerto Rico, or any possession of
2.24the United States;
2.25(2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
2.26Code;
2.27(3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code
2.28 (4) which is incorporated in a tax haven;
2.29 (5) which is engaged in activity in a tax haven sufficient for the tax haven to impose
2.30a net income tax under United States constitutional standards and section 290.015, and
2.31which reports that 20 percent or more of its income is attributable to business in the tax
2.32haven; or
2.33 (6) which has the average of its property, payroll, and sales factors, as defined under
2.34section 290.191, within the 50 states of the United States and the District of Columbia of
2.3520 percent or more.
3.1EFFECTIVE DATE.This section is effective for returns filed for taxable years
3.2beginning after December 31, 2010.
3.3 Sec. 3. Minnesota Statutes 2010, section 290.01, is amended by adding a subdivision
3.4to read:
3.5 Subd. 5c. Tax haven. (a) "Tax haven" means the following foreign jurisdictions,
3.6unless the listing of the jurisdiction does not apply under paragraph (b):
3.7(1) Andorra;
3.8(2) Anguilla;
3.9(3) Antigua and Barbuda;
3.10(4) Aruba;
3.11(5) Bahamas;
3.12(6) Bahrain;
3.13(7) Belize;
3.14(8) British Virgin Islands;
3.15(9) Cayman Islands;
3.16(10) Cook Islands;
3.17(11) Costa Rica;
3.18(12) Dominica;
3.19(13) Gibraltar;
3.20(14) Grenada;
3.21(15) Guernsey-Sark-Alderney;
3.22(16) Jersey;
3.23(17) Jordan;
3.24(18) Lebanon;
3.25(19) Liberia;
3.26(20) Liechtenstein;
3.27(21) Maldives;
3.28(22) Marshall Islands;
3.29(23) Monaco;
3.30(24) Montserrat;
3.31(25) Nauru;
3.32(26) Netherlands Antilles;
3.33(27) Niue;
3.34(28) Panama;
3.35(29) St. Kitts and Nevis;
4.1(30) St. Lucia;
4.2(31) St. Vincent and Grenadines;
4.3(32) Tonga;
4.4(33) Turks and Caicos; and
4.5(34) Vanuatu.
4.6(b) A foreign jurisdiction's listing under paragraph (a) does not apply to the first
4.7taxable year after the United States enters into a tax treaty or other agreement with the
4.8foreign jurisdiction that provides for prompt, obligatory, and automatic exchange of
4.9information with the United States government relevant to enforcing the provisions of
4.10federal tax laws and the treaty or other agreement was in effect for the taxable year.
4.11EFFECTIVE DATE.This section is effective for returns filed for taxable years
4.12beginning after December 31, 2010.
4.13 Sec. 4. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
4.14 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
4.15there shall be added to federal taxable income:
4.16 (1) the amount of any deduction taken for federal income tax purposes for income,
4.17excise, or franchise taxes based on net income or related minimum taxes, including but not
4.18limited to the tax imposed under section
4.19another state, a political subdivision of another state, the District of Columbia, or any
4.20foreign country or possession of the United States;
4.21 (2) interest not subject to federal tax upon obligations of: the United States, its
4.22possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
4.23state, any of its political or governmental subdivisions, any of its municipalities, or any
4.24of its governmental agencies or instrumentalities; the District of Columbia; or Indian
4.25tribal governments;
4.26 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
4.27Revenue Code;
4.28 (4) the amount of any net operating loss deduction taken for federal income tax
4.29purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
4.30deduction under section 810 of the Internal Revenue Code;
4.31 (5) the amount of any special deductions taken for federal income tax purposes
4.32under sections 241 to 247 and 965 of the Internal Revenue Code;
4.33 (6) losses from the business of mining, as defined in section
4.34clause (a), that are not subject to Minnesota income tax;
5.1 (7) the amount of any capital losses deducted for federal income tax purposes under
5.2sections 1211 and 1212 of the Internal Revenue Code;
5.3 (8) the exempt foreign trade income of a foreign sales corporation under sections
5.4921(a) and 291 of the Internal Revenue Code;
5.5 (9) the amount of percentage depletion deducted under sections 611 through 614 and
5.6291 of the Internal Revenue Code;
5.7 (10) for certified pollution control facilities placed in service in a taxable year
5.8beginning before December 31, 1986, and for which amortization deductions were elected
5.9under section 169 of the Internal Revenue Code of 1954, as amended through December
5.1031, 1985, the amount of the amortization deduction allowed in computing federal taxable
5.11income for those facilities;
5.12 (11) for taxable years beginning before January 1, 2011, the amount of any deemed
5.13dividend from a foreign operating corporation determined pursuant to section
5.14subdivision 4
5.15addition to income required by clauses (20), (21), (22), and (23);
5.16 (12) the amount of a partner's pro rata share of net income which does not flow
5.17through to the partner because the partnership elected to pay the tax on the income under
5.18section 6242(a)(2) of the Internal Revenue Code;
5.19 (13) the amount of net income excluded under section 114 of the Internal Revenue
5.20Code;
5.21 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
5.22Revenue Code, for the taxable year when subpart F income is calculated without regard to
5.23the provisions of Division C, title III, section 303(b) of Public Law 110-343;
5.24 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
5.25and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
5.26has an activity that in the taxable year generates a deduction for depreciation under
5.27section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
5.28that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
5.29under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
5.30depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
5.31amount of the loss from the activity that is not allowed in the taxable year. In succeeding
5.32taxable years when the losses not allowed in the taxable year are allowed, the depreciation
5.33under section 168(k)(1)(A) and (k)(4)(A) is allowed;
5.34 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
5.35Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
5.36Revenue Code of 1986, as amended through December 31, 2003;
6.1 (17) to the extent deducted in computing federal taxable income, the amount of the
6.2deduction allowable under section 199 of the Internal Revenue Code;
6.3 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
6.4federal subsidies for prescription drug plans;
6.5 (19) the amount of expenses disallowed under section
6.6 (20) for taxable years beginning before January 1, 2011, an amount equal to the
6.7interest and intangible expenses, losses, and costs paid, accrued, or incurred by any
6.8member of the taxpayer's unitary group to or for the benefit of a corporation that is a
6.9member of the taxpayer's unitary business group that qualifies as a foreign operating
6.10corporation. For purposes of this clause, intangible expenses and costs include:
6.11 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
6.12use, maintenance or management, ownership, sale, exchange, or any other disposition of
6.13intangible property;
6.14 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
6.15transactions;
6.16 (iii) royalty, patent, technical, and copyright fees;
6.17 (iv) licensing fees; and
6.18 (v) other similar expenses and costs.
6.19For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
6.20applications, trade names, trademarks, service marks, copyrights, mask works, trade
6.21secrets, and similar types of intangible assets.
6.22This clause does not apply to any item of interest or intangible expenses or costs paid,
6.23accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
6.24to such item of income to the extent that the income to the foreign operating corporation
6.25is income from sources without the United States as defined in subtitle A, chapter 1,
6.26subchapter N, part 1, of the Internal Revenue Code;
6.27 (21) for taxable years beginning before January 1, 2011, except as already included
6.28in the taxpayer's taxable income pursuant to clause (20), any interest income and income
6.29generated from intangible property received or accrued by a foreign operating corporation
6.30that is a member of the taxpayer's unitary group. For purposes of this clause, income
6.31generated from intangible property includes:
6.32 (i) income related to the direct or indirect acquisition, use, maintenance or
6.33management, ownership, sale, exchange, or any other disposition of intangible property;
6.34 (ii) income from factoring transactions or discounting transactions;
6.35 (iii) royalty, patent, technical, and copyright fees;
6.36 (iv) licensing fees; and
7.1 (v) other similar income.
7.2For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
7.3applications, trade names, trademarks, service marks, copyrights, mask works, trade
7.4secrets, and similar types of intangible assets.
7.5This clause does not apply to any item of interest or intangible income received or accrued
7.6by a foreign operating corporation with respect to such item of income to the extent that
7.7the income is income from sources without the United States as defined in subtitle A,
7.8chapter 1, subchapter N, part 1, of the Internal Revenue Code;
7.9 (22) for taxable years beginning before January 1, 2011, the dividends attributable to
7.10the income of a foreign operating corporation that is a member of the taxpayer's unitary
7.11group in an amount that is equal to the dividends paid deduction of a real estate investment
7.12trust under section 561(a) of the Internal Revenue Code for amounts paid or accrued by
7.13the real estate investment trust to the foreign operating corporation;
7.14 (23) for taxable years beginning before January 1, 2011, the income of a foreign
7.15operating corporation that is a member of the taxpayer's unitary group in an amount that
7.16is equal to gains derived from the sale of real or personal property located in the United
7.17States;
7.18 (24) the additional amount allowed as a deduction for donation of computer
7.19technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
7.20extent deducted from taxable income; and
7.21(25) discharge of indebtedness income resulting from reacquisition of business
7.22indebtedness and deferred under section 108(i) of the Internal Revenue Code.
7.23EFFECTIVE DATE.This section is effective for returns filed for taxable years
7.24beginning after December 31, 2010.
7.25 Sec. 5. Minnesota Statutes 2010, section 290.01, subdivision 19d, is amended to read:
7.26 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
7.27corporations, there shall be subtracted from federal taxable income after the increases
7.28provided in subdivision 19c:
7.29 (1) the amount of foreign dividend gross-up added to gross income for federal
7.30income tax purposes under section 78 of the Internal Revenue Code;
7.31 (2) the amount of salary expense not allowed for federal income tax purposes due to
7.32claiming the work opportunity credit under section 51 of the Internal Revenue Code;
7.33 (3) any dividend (not including any distribution in liquidation) paid within the
7.34taxable year by a national or state bank to the United States, or to any instrumentality of
8.1the United States exempt from federal income taxes, on the preferred stock of the bank
8.2owned by the United States or the instrumentality;
8.3 (4) amounts disallowed for intangible drilling costs due to differences between
8.4this chapter and the Internal Revenue Code in taxable years beginning before January
8.51, 1987, as follows:
8.6 (i) to the extent the disallowed costs are represented by physical property, an amount
8.7equal to the allowance for depreciation under Minnesota Statutes 1986, section
8.8subdivision 7
8.9 (ii) to the extent the disallowed costs are not represented by physical property, an
8.10amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
8.12 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
8.13Internal Revenue Code, except that:
8.14 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
8.15capital loss carrybacks shall not be allowed;
8.16 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
8.17a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
8.18allowed;
8.19 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
8.20capital loss carryback to each of the three taxable years preceding the loss year, subject to
8.21the provisions of Minnesota Statutes 1986, section
8.22 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
8.23a capital loss carryover to each of the five taxable years succeeding the loss year to the
8.24extent such loss was not used in a prior taxable year and subject to the provisions of
8.25Minnesota Statutes 1986, section
8.26 (6) an amount for interest and expenses relating to income not taxable for federal
8.27income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
8.28expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
8.29291 of the Internal Revenue Code in computing federal taxable income;
8.30 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
8.31which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
8.32reasonable allowance for depletion based on actual cost. In the case of leases the deduction
8.33must be apportioned between the lessor and lessee in accordance with rules prescribed
8.34by the commissioner. In the case of property held in trust, the allowable deduction must
8.35be apportioned between the income beneficiaries and the trustee in accordance with the
9.1pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
9.2of the trust's income allocable to each;
9.3 (8) for certified pollution control facilities placed in service in a taxable year
9.4beginning before December 31, 1986, and for which amortization deductions were elected
9.5under section 169 of the Internal Revenue Code of 1954, as amended through December
9.631, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
9.71986, section
9.8 (9) amounts included in federal taxable income that are due to refunds of income,
9.9excise, or franchise taxes based on net income or related minimum taxes paid by the
9.10corporation to Minnesota, another state, a political subdivision of another state, the
9.11District of Columbia, or a foreign country or possession of the United States to the extent
9.12that the taxes were added to federal taxable income under section
9.13clause (1), in a prior taxable year;
9.14 (10) for taxable years beginning before January 1, 2011, 80 percent of royalties,
9.15fees, or other like income accrued or received from a foreign operating corporation
9.16or a foreign corporation which is part of the same unitary business as the receiving
9.17corporation, unless the income resulting from such payments or accruals is income from
9.18sources within the United States as defined in subtitle A, chapter 1, subchapter N, part
9.191, of the Internal Revenue Code;
9.20 (11) income or gains from the business of mining as defined in section
9.21subdivision 1
9.22 (12) the amount of disability access expenditures in the taxable year which are not
9.23allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
9.24 (13) the amount of qualified research expenses not allowed for federal income tax
9.25purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
9.26the amount exceeds the amount of the credit allowed under section
9.27 (14) the amount of salary expenses not allowed for federal income tax purposes due
9.28to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
9.29Code;
9.30 (15) for a corporation whose foreign sales corporation, as defined in section 922
9.31of the Internal Revenue Code, constituted a foreign operating corporation during any
9.32taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
9.33claiming the deduction under section
9.34the foreign operating corporation, an amount equal to
9.35income excluded under section 114 of the Internal Revenue Code, provided the income is
9.36not income of a foreign operating company;
10.1 (16) any decrease in subpart F income, as defined in section 952(a) of the Internal
10.2Revenue Code, for the taxable year when subpart F income is calculated without regard to
10.3the provisions of Division C, title III, section 303(b) of Public Law 110-343;
10.4 (17) in each of the five tax years immediately following the tax year in which an
10.5addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
10.6the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
10.7amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
10.8resulting delayed depreciation cannot be less than zero;
10.9 (18) in each of the five tax years immediately following the tax year in which an
10.10addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
10.11the amount of the addition; and
10.12(19) to the extent included in federal taxable income, discharge of indebtedness
10.13income resulting from reacquisition of business indebtedness included in federal taxable
10.14income under section 108(i) of the Internal Revenue Code. This subtraction applies only
10.15to the extent that the income was included in net income in a prior year as a result of the
10.16addition under section
10.17EFFECTIVE DATE.This section is effective for returns filed for taxable years
10.18beginning after December 31, 2010.
10.19 Sec. 6. Minnesota Statutes 2010, section 290.17, subdivision 4, is amended to read:
10.20 Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
10.21within this state or partly within and partly without this state is part of a unitary business,
10.22the entire income of the unitary business is subject to apportionment pursuant to section
10.24business is considered to be derived from any particular source and none may be allocated
10.25to a particular place except as provided by the applicable apportionment formula. The
10.26provisions of this subdivision do not apply to business income subject to subdivision 5,
10.27income of an insurance company, or income of an investment company determined under
10.28section
10.29(b) The term "unitary business" means business activities or operations which
10.30result in a flow of value between them. The term may be applied within a single legal
10.31entity or between multiple entities and without regard to whether each entity is a sole
10.32proprietorship, a corporation, a partnership or a trust.
10.33(c) Unity is presumed whenever there is unity of ownership, operation, and use,
10.34evidenced by centralized management or executive force, centralized purchasing,
10.35advertising, accounting, or other controlled interaction, but the absence of these
11.1centralized activities will not necessarily evidence a nonunitary business. Unity is also
11.2presumed when business activities or operations are of mutual benefit, dependent upon or
11.3contributory to one another, either individually or as a group.
11.4(d) Where a business operation conducted in Minnesota is owned by a business
11.5entity that carries on business activity outside the state different in kind from that
11.6conducted within this state, and the other business is conducted entirely outside the state, it
11.7is presumed that the two business operations are unitary in nature, interrelated, connected,
11.8and interdependent unless it can be shown to the contrary.
11.9(e) Unity of ownership is not deemed to exist when a corporation is involved unless
11.10that corporation is a member of a group of two or more business entities and more than 50
11.11percent of the voting stock of each member of the group is directly or indirectly owned
11.12by a common owner or by common owners, either corporate or noncorporate, or by one
11.13or more of the member corporations of the group. For this purpose, the term "voting
11.14stock" shall include membership interests of mutual insurance holding companies formed
11.15under section
11.16(f) The net income and apportionment factors under section
11.17foreign corporations and other foreign entities which are part of a unitary business shall
11.18not be included in the net income or the apportionment factors of the unitary business.
11.19A foreign corporation or other foreign entity which is required to file a return under this
11.20chapter shall file on a separate return basis.
11.21
11.22
11.23
11.24severable from the provisions of section 290.01, subdivision 5, clauses (4) to (6), and if
11.25any of those provisions are found to be unconstitutional, the provisions of this paragraph
11.26are void for the respective taxable years.
11.27
11.28
11.29
11.30
11.31
11.32
11.33
11.34
11.35
11.36
12.1
12.2
12.3
12.4
12.5
12.6
12.7
12.8
12.9
12.10
12.11factors to be used in the apportionment of net income pursuant to section
12.13corporations or other domestic entities
12.14determined to be part of the unitary business pursuant to this subdivision, notwithstanding
12.15that foreign corporations or other foreign entities might be included in the unitary business.
12.16
12.17this chapter that are connected with or allocable against dividends
12.18
12.19
12.20
12.21a unitary business must file combined reports as the commissioner determines. On the
12.22reports, all intercompany transactions between entities included pursuant to paragraph
12.23
12.24accordance with this subdivision is apportioned among the entities by using each entity's
12.25Minnesota factors for apportionment purposes in the numerators of the apportionment
12.26formula and the total factors for apportionment purposes of all entities included pursuant
12.27to paragraph
12.28
12.29combined report for a fractional part of the common accounting period of the combined
12.30report:
12.31(1) its income includable in the combined report is its income incurred for that part
12.32of the year determined by proration or separate accounting; and
12.33(2) its sales, property, and payroll included in the apportionment formula must
12.34be prorated or accounted for separately.
12.35EFFECTIVE DATE.This section is effective for returns filed for taxable years
12.36beginning after December 31, 2010.
13.1 Sec. 7. REPEALER.
13.2Minnesota Statutes 2010, sections 290.01, subdivision 6b; and 290.0921, subdivision
13.37, are repealed.
13.4EFFECTIVE DATE.This section is effective for returns filed for taxable years
13.5beginning after December 31, 2010.
