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Minnesota Statutes Various State Taxes and Programs (Ch. 289A-295) § 290.21. Deductions allowed to corporations

Current as of January 01, 2025 | Updated by Findlaw Staff

Subdivision 1. Scope and application. The following deductions shall be allowed only to corporations and shall be deductions from a corporation's taxable net income.

Subd. 2. Repealed by Laws 1980, c. 607, art. 9, § 2.

Subd. 3. Repealed byLaws 2001, 1st Sp., c. 5, art. 9, § 30, par. (b).

Subd. 3a. Repealed by Laws 1983, c. 342, art. 1, § 44.

Subd. 4. Dividends received from another corporation. (a)(1) Fifty percent of dividends received by a corporation during the taxable year from another corporation, in which the recipient owns 20 percent or more of the stock, by vote and value, not including stock described insection 1504(a)(4) of the Internal Revenue Codewhen the corporate stock with respect to which dividends are paid does not constitute the stock in trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not constitute property held by the taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or business, or when the trade or business of the taxpayer does not consist principally of the holding of the stocks and the collection of the income and gains therefrom; and

(2)(i) the remaining 50 percent of dividends if the dividends received are the stock in an affiliated company transferred in an overall plan of reorganization and the dividend is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as amended through December 31, 1989;

(ii) the remaining 50 percent of dividends if the dividends are received from a corporation which is subject to tax undersection 290.36and which is a member of an affiliated group of corporations as defined by the Internal Revenue Code and the dividend is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as amended through December 31, 1989, or is deducted under an election undersection 243(b) of the Internal Revenue Code; or

(iii) the remaining 50 percent of the dividends if the dividends are received from a property and casualty insurer as defined undersection 60A.60, subdivision 8, which is a member of an affiliated group of corporations as defined by the Internal Revenue Code and either: (A) the dividend is eliminated in consolidation underTreasury Regulation 1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted under an election undersection 243(b) of the Internal Revenue Code.

(b) Forty percent of dividends received by a corporation during the taxable year from another corporation in which the recipient owns less than 20 percent of the stock, by vote or value, not including stock described insection 1504(a)(4) of the Internal Revenue Codewhen the corporate stock with respect to which dividends are paid does not constitute the stock in trade of the taxpayer, or does not constitute property held by the taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or business, or when the trade or business of the taxpayer does not consist principally of the holding of the stocks and the collection of income and gain therefrom.

(c) The dividend deduction provided in this subdivision shall be allowed only with respect to dividends that are included in a corporation's Minnesota taxable net income for the taxable year.

The dividend deduction provided in this subdivision does not apply to a dividend from a corporation which, for the taxable year of the corporation in which the distribution is made or for the next preceding taxable year of the corporation, is a corporation exempt from tax undersection 501 of the Internal Revenue Code.

The dividend deduction provided in this subdivision does not apply to a dividend received from a real estate investment trust as defined insection 856 of the Internal Revenue Code.

The dividend deduction provided in this subdivision applies to the amount of regulated investment company dividends only to the extent determined undersection 854(b) of the Internal Revenue Code.

The dividend deduction provided in this subdivision shall not be allowed with respect to any dividend for which a deduction is not allowed under the provisions ofsection 246(c)or246A of the Internal Revenue Code.

(d) If dividends received by a corporation that does not have nexus with Minnesota under the provisions ofPublic Law 86-272are included as income on the return of an affiliated corporation permitted or required to file a combined report undersection 290.17, subdivision 4, or290.34, subdivision 2, then for purposes of this subdivision the determination as to whether the trade or business of the corporation consists principally of the holding of stocks and the collection of income and gains therefrom shall be made with reference to the trade or business of the affiliated corporation having a nexus with Minnesota.

(e) The deduction provided by this subdivision does not apply if the dividends are paid by a FSC as defined insection 922 of the Internal Revenue Code.

(f) If one or more of the members of the unitary group whose income is included on the combined report received a dividend, the deduction under this subdivision for each member of the unitary business required to file a return under this chapter is the product of: (1) 100 percent of the dividends received by members of the group; (2) the percentage allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business income apportionable to this state for the taxable year undersection 290.191or290.20.

Subds. 5, 6. Repealed by Laws 1987, c. 268, art. 1, § 127.

Subd. 7. Repealed by Laws 1982, c. 523, art. 1, § 72.

Subd. 8. Repealed byLaws 1988, c. 719, art. 2, § 56.

Subd. 9. Controlled foreign corporations. The net income of a corporation that is included pursuant tosection 951 of the Internal Revenue Codeis dividend income.

Subd. 10. Global intangible low-taxed income. Any amounts included in taxable income pursuant tosection 951A of the Internal Revenue Code, are dividend income.

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Cite this article: FindLaw.com - Minnesota Statutes Various State Taxes and Programs (Ch. 289A-295) § 290.21. Deductions allowed to corporations - last updated January 01, 2025 | https://codes.findlaw.com/mn/various-state-taxes-and-programs-ch-289a-295/mn-st-sect-290-21/

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