Minnesota enacts significant tax changes, including Compact repeal

On May 23, 2013, Governor Mark Dayton signed H.F. 677, which makes significant changes to Minnesota corporate income tax, individual income tax, and sales and use tax, including repeal of the Multistate Tax Compact. Corporate income tax changes include repeal of foreign operating corporation provisions, repeal of foreign royalty deductions, inclusion of foreign disregarded entities in unitary groups, and adoption of a Finnigan apportionment approach. The personal income tax rate increases. Sales and use tax changes include tax base expansion to certain business purchases and services, click-through nexus, multiple points of use exemption certificates, and a capital equipment exemption. Finally, the bill requires remote sellers to collect and pay sales and use tax consistent with federal legislation.

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