Taxation in Minnesota

Updated on Tuesday 25th September 2018

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Minnesota is among the American states that impose a progressive income tax, depending on the personal revenues and two important taxes applicable to businesses in this state: the minimum fee for LLCs, partnerships, traditional corporations and S corporations and the corporation income tax or the corporation franchise tax which is imposed on C corporations in Minnesota. We invite you to talk to our team of company formation agents in USA and find out information about how you can start a business in USA and about the available tax structure.

How are corporations levied in Minnesota?

The corporation income tax or the corporation franchise tax which is imposed for traditional corporations in Minnesota is set at a flat rate of 9.8% and the alternative minimum tax or the AMT of 5.8% rate which is applicable for a minimum taxable income of more than $40,000.

How is the minimum fee applied to corporations in Minnesota?

According to the Minnesota Department of Revenue, the minimum fee is applicable depending on the sales, payroll and the value of the properties in Minnesota for a total of at least $930,000, as follows in the table below:

Incomes Minimum Fee
Less than $930,000 NO minimum fee imposed
Between $970,000 and $1,959,999 $200
Between $1,960,000 and $9,769,999 $590
Between $9,770,000 and $19,539,999 $1,960
Between $19,540,000 and $39,079,999  $3,910
For $39,080,000 and more $9,770

We remind you that our specialists in company formation in USA are at your disposal with complete assistance and information if you would like to register a company in Minnesota. Also, we invite you to read the general guide to company incorporation in Michigan for extra details.

Taxes for corporations in Minnesota

According to the tax legislation for Minnesota, the corporations registered in this American state must pay the franchise tax (9.8%) and the AMT or the alternative minimum tax. If profits of more than $970,000 are registered by a corporation in Minnesota, the minimum fee is also applicable.

Taxes for LLCs in Minnesota

Limited liability companies in Minnesota are seen as pass-through entities and are subject to a minimum fee if the total value (sales, payroll, properties) sums up to $500,000 or more. We remind that the LLC members will have to observe the income tax as distributed for each earned income. The same tax matters are available for sole proprietorships in Minnesota, meaning that they are subject to the same tax regime as imposed for LLCs.

If you would like to know more about the tax structure in Minnesota, we invite you to talk to our team of company incorporation agents in USA and contact them soon.