Michele Engdahl with Thomson Reuters, Eagan, receives an up-close look at a hog-producing facility – Baarsch Farms-Next Generation Pork, Inc. near Austin – as part of Leadership Minnesota. The Minnesota Chamber program is an exclusive look at the state’s changing economy and the issues that will shape its future. Grow Minnesota! events help businesses prepare for the economic recovery. Sharing their perspectives on how the recession has changed the job market were (from left) Simon Foster of SpencerStuart, Minneapolis; Sue Metcalf of Ecolab, St. Paul; and Jan Erickson of Medtronic, Inc., Fridley. Dee Schutte, executive director of the Litchfield Chamber of Commerce, visits with House Minority Leader Kurt Zellers at the Session Priorities event. Governor Tim Pawlenty congratulates John M. Rivisto, president and CEO of Wells Concrete Company, on its new facility in Sartell. The plant has created 50 jobs in central Minnesota and will add another 100 jobs over the next five years. Minnesota legislative leaders share their priorities at the Minnesota Chamber’s annual Session Priorities event: (from left) House Minority Leader Kurt Zellers, House Speaker Margaret Anderson Kelliher, moderator Tom Hauser of KSTP-TV Eyewitness News; Senate Minority Leader David Senjem; Senate Majority Leader Larry Pogemiller. Governor Tim Pawlenty addresses nearly 1,600 business leaders and policy-makers at the Minnesota Chamber’s annual Session Priorities event, the largest legislative gathering of its kind.

Tax Administration

Issue

Are the requirements related to the administration of the state’s tax statutes fair and balanced?

Policy

Minnesota generally receives good marks with respect to tax administration; however, fairness could be improved with the following change:
  • Federal adjustments should not open the entire state tax return to audit.
    The Minnesota Chamber believes that the Department of Revenue should have 3½ years to make assessments on a corporation’s state tax return. If the 3½ years have lapsed, the department should be able to make adjustments only to the portions of the corporation’s state return that are due to federal adjustments.

Business Impact

Limiting the Department of Revenue’s authority to make assessments to the 3½-year statute of limitations will give corporations more certainty over their state tax returns. Under current law, if a corporation signs a waiver to keep its federal tax return open and the Minnesota Department of Revenue has not conducted a field audit, its state tax return also remains open. Since federal returns can be open for a decade or more, the department has an extended period in which to make assessments. In addition, according to the Council on State Taxation, only nine states require a state return to remain open if a federal waiver is signed. Making a change would put Minnesota in line with the majority of states.

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