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 [Repealed, 1980 c 607 art 9 s 2]
Subd. 3. [Repealed, 1Sp2001 c 5 art 9 s 30]
Subd. 3a. [Repealed, 1983 c 342 art 1 s 44]
Subd. 4. Dividends received from another corporation. (a)(1) Eighty 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 in section 1504(a)(4) of the Internal Revenue Code when 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 20 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 20 percent of dividends if the dividends are received from a corporation which is subject to tax under section 290.36 and 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 under section 243(b) of the Internal Revenue Code; or
(iii) the remaining 20 percent of the dividends if the dividends are received from a property and casualty insurer as defined under section 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 under Treasury Regulation 1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted under an election under section 243(b) of the Internal Revenue Code.
(b) Seventy 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 in section 1504(a)(4) of the Internal Revenue Code when 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 under section 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 in section 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 under section 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 of section 246(c) or 246A of the Internal Revenue Code.
(d) If dividends received by a corporation that does not have nexus with Minnesota under the provisions of Public Law 86-272 are included as income on the return of an affiliated corporation permitted or required to file a combined report under section 290.17, subdivision 4, or 290.34, 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 in section 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 under section 290.191 or 290.20.
Subd. 5. [Repealed, 1987 c 268 art 1 s 127]
Subd. 6. [Repealed, 1987 c 268 art 1 s 127]
Subd. 7. [Repealed, 1982 c 523 art 1 s 72]
Subd. 8. [Repealed, 1988 c 719 art 2 s 56]
Subd. 9. Controlled foreign corporations. The net income of a domestic corporation that is included pursuant to section 951 of the Internal Revenue Code is dividend income.
(2394-27) 1933 c 405 s 27; Ex1937 c 49 s 18; 1939 c 446 s 8; 1941 c 550 s 21; 1943 c 656 s 28; 1947 c 635 s 10; 1949 c 734 s 10; 1951 c 679 s 3; 1953 c 321 s 1; 1955 c 385 s 2; 1955 c 742 s 1; 1955 c 775 s 1; 1961 c 508 s 1; 1963 c 331 s 1; 1965 c 367 s 1; 1971 c 769 s 2; 1973 c 711 s 3; 1974 c 157 s 3; 1975 c 284 s 48; 1975 c 349 s 17,29; 1976 c 2 s 106; 1976 c 334 s 14; 1977 c 376 s 13; 1977 c 386 s 5; 1978 c 463 s 107; 1978 c 766 s 5; 1979 c 303 art 1 s 20; 1980 c 607 art 1 s 32; 1981 c 29 art 7 s 31; 1981 c 60 s 27; 1981 c 178 s 62-66; 3Sp1981 c 2 art 3 s 14; 1982 c 523 art 1 s 30; art 29 s 3; art 40 s 14; 1983 c 15 s 18; 1983 c 207 s 43; 1983 c 342 art 1 s 27,28,43; 1984 c 502 art 5 s 14,15; 1984 c 514 art 1 s 8; art 4 s 4; 1985 c 248 s 70; 1Sp1985 c 14 art 1 s 46; art 21 s 32,49; 1986 c 444; 1Sp1986 c 1 art 1 s 9; art 2 s 3; art 3 s 12,13; 1987 c 268 art 1 s 78-80; 1988 c 719 art 2 s 36,37; art 3 s 12; 1989 c 28 s 25; 1Sp1989 c 1 art 10 s 28; 1990 c 604 art 2 s 16; 1991 c 291 art 6 s 46; 1992 c 511 art 6 s 19; 1993 c 375 art 8 s 14; 1994 c 587 art 1 s 24; 1998 c 389 art 6 s 15; 1Sp2001 c 5 art 9 s 23; 2002 c 377 art 1 s 6; 2008 c 366 art 12 s 5; 2013 c 143 art 6 s 30; 1Sp2019 c 6 art 1 s 57; art 2 s 22
Structure Minnesota Statutes
Chapters 289A - 295 — Various State Taxes And Programs
Chapter 290 — Income And Franchise Taxes
Section 290.0111 — Temporary Conformity To Certain Federal Tax Changes.
Section 290.0121 — Dependent Exemption.
Section 290.0122 — Itemized Deductions.
Section 290.0123 — Standard Deduction.
Section 290.0133 — Corporations; Additions To Federal Taxable Income.
Section 290.0134 — Corporations; Subtractions From Federal Taxable Income.
Section 290.0135 — Basis Modifications Affecting Gain Or Loss On Disposition Of Property.
Section 290.0136 — Certain Preferred Stock Losses.
Section 290.0137 — Accelerated Recognition Of Certain Installment Sale Gains.
Section 290.014 — Jurisdiction To Tax In General.
Section 290.015 — Minimum Contacts Required For Jurisdiction To Tax Trade Or Business.
Section 290.02 — Franchise Tax On Corporations Measured By Net Income.
Section 290.03 — Income Tax; Imposition, Classes Of Taxpayers.
Section 290.032 — Lump-sum Distribution Tax.
Section 290.04 — Liability For Tax.
Section 290.05 — Exempt Individuals, Organizations, Estates, Trusts.
Section 290.06 — Rates Of Tax; Credits.
Section 290.067 — Dependent Care Credit.
Section 290.0671 — Minnesota Working Family Credit.
Section 290.0672 — Long-term Care Insurance Credit.
Section 290.0674 — Minnesota Education Credit.
Section 290.0675 — Marriage Penalty Credit.
Section 290.0677 — Military Service Credits.
Section 290.0679 — Assignment Of Refund.
Section 290.068 — Credit For Increasing Research Activities.
Section 290.0681 — Credit For Historic Structure Rehabilitation.
Section 290.0682 — Student Loan Credit.
Section 290.0683 — Minnesota Housing Tax Credit.
Section 290.0684 — Section 529 Plan Credit.
Section 290.0685 — Credit For Parents Of Stillborn Children.
Section 290.0686 — Credit For Attaining Master's Degree In Teacher's Licensure Field.
Section 290.0692 — Small Business Investment Credit.
Section 290.07 — Net Income; Computation, Accounting Period.
Section 290.0802 — Subtraction For The Elderly And Disabled.
Section 290.081 — Income Of Nonresidents, Reciprocity.
Section 290.091 — Alternative Minimum Tax On Preference Items.
Section 290.0921 — Corporate Alternative Minimum Tax After 1989.
Section 290.0922 — Minimum Fee; Corporations; Partnerships.
Section 290.093 — Tax Computation For Mutual Savings Banks Conducting Life Insurance Business.
Section 290.095 — Operating Loss Deduction.
Section 290.10 — Nondeductible Items.
Section 290.17 — Gross Income, Allocation To State.
Section 290.172 — Commissioner Of Revenue.
Section 290.191 — Apportionment Of Net Income.
Section 290.20 — Net Income; Allocation To State.
Section 290.21 — Deductions Allowed To Corporations.
Section 290.22 — Estates And Trusts, Imposition Of Tax.
Section 290.26 — Exemption For Individual Retirement Account.
Section 290.281 — Common Trust Fund.
Section 290.30 — Fiduciaries, Duty To Pay Tax.
Section 290.31 — Partnerships; Individual Liability Of Partners.
Section 290.311 — Partnership Gross Income.
Section 290.32 — Taxes For Part Of Year, Computation.
Section 290.34 — Corporations, Special Provisions.
Section 290.371 — Notice Of Business Activities Report.
Section 290.431 — Nongame Wildlife Checkoff.
Section 290.432 — Corporate Nongame Wildlife Checkoff.
Section 290.48 — Large Amounts Of Cash; Presumption Of Jeopardy.
Section 290.491 — Tax On Gain; Discharge In Bankruptcy.
Section 290.62 — Distribution Of Revenues.
Section 290.92 — Tax Withheld At Source Upon Wages; Other Payments.
Section 290.9201 — Tax On Nonresident Entertainers.
Section 290.923 — Tax Withheld On Royalties Upon Ore.
Section 290.9705 — Surety Deposits Required For Construction Contracts.
Section 290.9725 — S Corporation.
Section 290.9726 — Corporation Taxable Income Taxed To Shareholders.
Section 290.9727 — Tax On Certain Built-in Gains.
Section 290.9728 — Tax On Capital Gains.
Section 290.9729 — Tax On Passive Investment Income.
Section 290.9741 — Election By Remic.
Section 290.9742 — Remic Income Taxable To Holders Of Interests.