A Guide To STARTING A BUSINESS IN MINNESOTA 42nd Ed 2024

Companies that substantially refurbish a data or network operations center of at least 25,000 square feet and invest at least $50 million within 24 months may qualify for the Data Center Sales Tax incentives. • Employers Transit Pass Credit: For employers who purchased transit passes to give or resell to employees for use in Minnesota. The credit is 30 percent of the difference between what employers paid for the passes and charged for employees. (Minn. Stat. § 290.06, subd. 28). • Angel Tax Credit: Credit provides a 25-percent credit to investors or investment funds that make equity investments in startup companies focused on high technology, new proprietary technology, or a new proprietary product, process or service in specified fields. The maximum credit is $125,000 per person, per year ($250,000 if filing jointly). The credit is refundable. Residents of other states and foreign countries are eligible. (Minn. Stat. §§ 116J.8737 and 290.0692). • Beginning Farmer Tax Credit: Provides tax credits for the rent or sale of farm land or a variety of farm assets to beginning farmers. Beginning farmers that participate in an approved financial management program. (Minn. Stat. § 41B.03, subd. 3, paragraph (a), clause (2). The beginning farmer may need to participate in an approved financial management program. Costs of financial management programs up to a maximum of $1,500 per year (for up to 3 years) may also be eligible for a tax credit. The financial management credit need not be tied to any agricultural asset sale or rental. • Owners of Agricultural Assets Credit : Agricultural asset owners who sell or rent their assets to beginning farmers in Minnesota may be eligible for a nonrefundable credit. Unused portions of this credit can be carried over for 15 years. (Minn. Stat. §§ 41B.0391, subd. 2 and 290.06, subd. 37). • Film Production Tax Credit: Provides nonrefundable tax credits for 25 percent of eligible production costs. The tax credit is administered by the Department of Employment and Economic Development (DEED). DEED may issue $4,950,000 of credits each year. Any unused credit amounts may be carried over by DEED for the next five years. The credit may be assigned one time. (Minn. Stat. §§ 116U.27, 290.06, and 297I.20) Federal Tax Credits • Work Opportunity Federal Tax Credit: Provides an incentive to hire individuals from targeted groups. The PATH Act expanded the targeted groups of individuals to include qualified long-term unemployment recipients. In Minnesota, the Department of Employment and Economic Development (DEED), (Work Opportunity Tax Credit (WOTC) Unit) certifies members of targeted groups. For more information, see Work Opportunity Tax Credit (WOTC) from DEED, and IRS-Work Opportunity Tax Credit. • Small Business Health Care Tax Credit: Receive a tax credit of up to 50 percent of annual premiums paid toward health insurance for employees, (35 percent for tax years (2010- 2013).

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