Latest Posts

Home

Facebook

Twitter

Search
About

Minnesota should ditch its alternative minimum tax for corporations

It is no secret that Minnesota taxes it’s corporations at a higher rate than almost anywhere else in the United States. The state’s top rate of Corporate Income Tax (9.8%) is the third highest in the country. Only Iowa (12%) and Pennsylvania (9.99%) have higher rates.

But, as we wrote in our recent report The State of Minnesota’s Economy: 2017, its isn’t just a question of tax rates, Minnesota’s corporate tax system is also more complex than in many other jurisdictions. The Tax Foundation ranks Minnesota 46th out of the 50 states for its business tax climate. Minnesota imposes a deduction schedule for natural resource depletion on top of the federal one. This which adds another layer of compliance difficulties beyond the federal. It it also one of only eight states to have an Alternative Minimum Tax (AMT) for corporations.

Fortunately, there could be some relief on its way in this legislative session. A bill, 2526, introduced by Senator Ann H. Rest (DFL) will repeal the corporate alternative minimum tax and the corporate minimum fee. As the Minnesota Center for Fiscal Excellence puts it,

With the federal repeal of the AMT and various modifications throughout the Internal Revenue Code, the Minnesota AMT would be even more complicated and burdensome and certainly no picnic for the Department to audit. While waiting on the Department’s revenue estimate for the cost of this proposal, it’s worth noting the last time they published a corporate income tax bulletin (about a decade ago) the corporate AMT constituted about 1% of state corporate income tax collections. Given the current circumstances, that’s not worth retaining.

In short, the state’s separate AMT for corporations is more hassle that its worth. We recommended its repeal in our report and we at the Center wish Senator Rest the best of luck in getting this bill passed.

John Phelan is an economist at Center of the American Experiment. 

Comments

Subscribe

Categories

Upcoming Events

  • YLC Curling Event

    Location: Chaska Curling Center 3210 Chaska Blvd, Chaska, MN 55318

    Grab your broom and stone and join the Young Leadership Council for an evening of Curling at the Chaska Curling Center! $40 registration includes: Instruction Ice time and equipment Appetizers (Curling Center Bar will be available to purchase drinks) The event will begin with 15-20 minutes of classroom instruction on curling rules and basics followed by 20-30 minutes on the ice for practice and drills. Instructors will be on hand the whole evening to guide your games. Dress Code: Bring a pair of clean-on-the-bottom shoes to change into. No leather soles or metal lace hooks Loose fitting or strechy clothes…

    Register Now
  • The Diversity Delusion

    Location: Hilton Minneapolis 1001 South Marquette Avenue Minneapolis, MN 55403

    Please join Center of the American Experiment on Wednesday, April 24th at the Hilton Hotel for a lunch forum with Heather Mac Donald as she discusses her new book, The Diversity Delusion: How Race and Gender Pandering Corrupt the University and Undermine Our Culture.  Heather Mac Donald is the Thomas W. Smith Fellow at the Manhattan Institute, a contributing editor of City Journal, and a New York Times bestselling author. She is a recipient of the 2005 Bradley Prize. Mac Donald’s work at City Journal has covered a range of topics, including higher education, immigration, policing, homelessness and homeless advocacy, criminal-justice reform, and race…

    Register Now
  • 2019 Annual Dinner Featuring Nigel Farage

    Location: Hilton Minneapolis 1001 South Marquette Avenue Minneapolis, MN 55403

    Purchase Tickets Here

    Register Now