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Business Costs <br />"...the move <br />solidifies GE's 'center <br />of excellence' in <br />Minnesota and its <br />commitment to <br />growing its $300 <br />million business here <br />for the long term". <br />— GE Water & Process <br />Technologies <br />Minnesota Business Taxes are Very Competitive <br />• Minnesota's business taxes rank among the 16 lowest in the nation, <br />according to a report by Ernst & Young and the Council on State Taxation, <br />which assessed business taxes as a share of private sector gross state product <br />for fiscal year 2009. Minnesota's tax ranking was better than that for <br />California, Texas, New York, Ohio and Illinois. <br />• Minnesota is among the Top States for Business 2009, ranking sixth <br />overall, according to a CNBC report. That report found that Minnesota's <br />economic competitiveness was better than such states as California, <br />Pennsylvania, New Jersey, New York, Ohio, Georgia, North Carolina, <br />Massachusetts and Illinois. <br />Corporate Income Tax <br />• Minnesota's lack of a throwback rule (sales to states without income taxes <br />"thrown back" to the taxing state for apportionment purposes) reduces net <br />income, and a generous carryforward period helps reduce tax liabilities. <br />Corporate Income Tax <br />State <br />Corporate <br />Income Tax Rate <br />Apportionment Formula Throwback Carryforward <br />(sales/property/payroll) Rule <br />R&D <br />Credit <br />Minnesota 9.80% <br />90/5.0/5.0* <br />No <br />Yes (0 back, <br />15 forward) <br />Yes <br />Illinois <br />Ohio <br />4.8% (plus 2.5% <br />personal property <br />replacement tax) <br />Commercial Activity <br />Tax (CAT) on gross <br />receipts: $150,000 <br />-1 million = $150; <br />over $1 million = <br />$150 plus 0.26% <br />multiplied by 100%. <br />Indiana 8.50% <br />Michigan <br />Wisconsin 7.90% <br />4.95% Michigan <br />Business Tax (MBT) <br />and modifited gross <br />receipts tax of <br />0.8% on receipts of <br />$350,000 or more. <br />One -factor sales <br />Triple weighted sales <br />One -factor Sales <br />One -factor sales <br />One -factor Sales <br />Yes <br />No <br />Yes <br />No <br />Yes <br />Yes (0 back, 12 <br />forward) <br />Yes (0 back, 20 <br />forward) <br />Yes (2 back, <br />20 forward) <br />Yes (0 back, 10 <br />forward) na <br />Yes (0 back, 15 Yes <br />forward) <br />Yes <br />Yes <br />Yes <br />na: Not applicable. <br />*Minnesota is phasing in a single sales apportionment by 2014. <br />Source: 2011 State Tax Handbook, CCH Inc. A Practical Guide to Research and Development Tax Incentives, Second <br />Edition, CCH Inc. State websites. <br />Because of Minnesota's favorable tax provisions, <br />bottom -line tax liability is very competitive. <br />14 <br />