Conforming with the provisions of the 2025 federal tax bill will promote business investment in Minnesota. Priority should be given to provisions that have the greatest economy-wide impact such as Section 179 expensing, R&D expensing, interest expensing, bonus depreciation (including special depreciation for qualified manufacturing property), and the pass-through deduction.
Reducing Minnesota’s individual income tax rates to get out of the top ten highest in the nation to improve talent recruitment, competitiveness of pass-through businesses, and to encourage talent, investment and economic growth.
Reducing Minnesota’s second highest in the nations corporate income tax rate of 9.8% to get out of the top ten highest in the nation to improve business competitiveness, private sector investment and economic growth.
Enacting reforms for taxation of foreign sourced income to bring Minnesota more in alignment with other states. This includes reducing global intangible low-taxed income (GILTI) subject to Minnesota taxation from the current 50%, increasing dividend received deduction and allowing inclusion of related foreign apportionment factors for foreign sourced income.
Providing property tax relief by lowering the state business property tax levy, an extra tax assessed on businesses that results in the high fixed cost of doing business in Minnesota.
Encouraging investment, innovation, entrepreneurship and productivity growth in Minnesota operations through alternative simplified calculation of R&D, continuing angel investment tax credits, establishing a headquarters tax credit, and providing incentives for investments in workforce training and other investments in Minnesota-based operations.
Conforming to the federal estate tax threshold to remove the high financial disincentive to remain in Minnesota and to reduce barriers for transfers of family farms and businesses.
Opposing tax increases that undermine Minnesota’s competitiveness and hinder economic growth.
Supporting reducing taxpayer administration compliance burdens, improving taxpayer procedural protections and providing clear release guidance to taxpayers.
No new personal income or business taxes. The Chamber successfully advocated against harmful tax proposals like a 5th tier income tax, a social media excise tax, a digital ad tax, an expansion of the state sales tax to professional services, a CEO pay ratio tax and more.
The state conformed with aspects of HR1 which passed last summer. The most notable business-friendly provisions included immediate R&E Expensing for pass-through entities, Section 179 Expensing, Bonus Depreciation and changes to the Business Interest limit.
Revived and extended by two years the state’s Pass-Through Entity Tax to provide Minnesota businesses federal tax relief from the SALT cap.
CONTINUED CHALLENGES
Hostility to business requiring the need to continue fighting for immediate R&E expensing for c-corps and a permanent PTE Tax extension.
No progress on Minnesota high top-line income tax rates (2nd highest corporate rate and 6th highest personal income rate).
No progress on tax administration proposals that would make navigating Minnesota’s complex tax code simpler and more predictable.
Legislators constantly seeking new or increased taxes on businesses that would further harm Minnesota's competitiveness.
