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01/13/21 REVISOR EAP/HR 21-01750 <br />2.1 Sec. 2. Minnesota Statutes 2020, section 289A.08, is amended by adding a subdivision to <br />2.2 read: <br />2.3 Subd. 7a. Election to file as C-option corporation. (a) A qualifying entity may elect <br />2.4 to file a return as a C-option corporation. Except as provided in this subdivision, a C-option <br />2.5 corporation must calculate its tax liability as a corporation subject to the franchise tax on <br />2.6 corporations imposed in section 290.02 and must allocate its income as a corporation as <br />2.7 required under sections 290.17, 290.191, and 290.20. <br />2.8 (b) The election under paragraph (a): <br />2.9 (1) must be made on or before the due date or extended due date of the qualifying entity's <br />2.10 return as a C-option corporation; <br />2.11 (2) may only be made by persons who hold more than 50 percent ownership interest in <br />2.12 the qualifying entity; and <br />2.13 (3) is binding on all persons who have an ownership interest in the qualifying entity. <br />2.14 (c) The election is binding for a period of four taxable years following the taxable year <br />2.15 of the election. The election may be revoked before the expiration of the period if: <br />2.16 (1) the revocation is requested by persons who hold more than 50 percent ownership <br />2.17 interest in the qualifying entity; and <br />2.18 (2) the revocation is made on or before the due date or the extended due date of the <br />2.19 qualifying entity's return for that year. <br />2.20 (d) If an election is revoked before the expiration of the period, a new election to file as <br />2.21 a C-option corporation may not be made by the qualifying entity for the following four <br />2.22 taxable years. <br />2.23 (e) The expiration or revocation of an election is effective at the close of a taxable year <br />2.24 and nothing in this section releases a C-option corporation from complying with the <br />2.25 requirements of this chapter for that taxable year. <br />2.26 (f) For purposes of this subdivision: <br />2.27 (1) "qualifying entity" means a: <br />2.28 (i) partnership; <br />2.29 (ii) limited liability company; or <br />Sec. 2. 2 <br />