I. Purpose:
The purpose of this bill is to lower taxes on corporations in Minnesota. Minnesota currently taxes corporations a flat rate of 9.8%. This bill will lower that tax rate to 4.8%. The increased income for corporations will be beneficial for existing corporations in Minnesota and will also attract other companies to Minnesota. By attracting other companies to Minnesota, tax revenue has the potentiality to increase with the passage of this bill. By making Minnesota an attract haven for businesses to relocate to, Minnesota will gain jobs, prestige, and income.
II. Definitions:
Corporation: This shall be defined as any commercial entity that is registered as corporation
III. Penalties:
No penalties are required for this bill
VI. Funding:
Minnesota currently takes in 1.02 billion in corporate tax revenue. Under current conditions that would equal a 500 million reduction in tax income. However, this tax rate reduction will attract large numbers of companies to Minnesota from other states with higher taxes. When these companies move to Minnesota they will bring their tax revenue with them, offsetting the cost of lost tax income. Any further loss will have to be cut from the general budget. Conceivably within a few years this tax will increase state income from corporations because it will attract more businesses to Minnesota.
V. Enforcement:
No enforcement is necessary for this bill
VI. Effective date:
For the next 8 years, each year the corporate income tax shall be reduced by 0.5%, until it reaches 4.8%.