“Throwback Rule” Minnesota does not use the "Throwback Rule" for sales received in another state. The rule is including sales received in another state as in-state sales when the seller lacks taxable nexus in the other state. Instead, Minnesota uses the location of sales received (destination) to determine what is an in- state sale for the apportionment formula. For example, if the destination of a sale is in Minnesota, the sale is included in the sales factor as an in-state sale. If the destination of the sale is in another state, the sale is not an in-state sale. BUSINESS ACTIVITY REPORT Every business that has property or personnel in Minnesota or receives income from Minnesota sources is required to file the Form M4R, Minnesota Business Activity Report, with the Minnesota Department of Revenue unless the business files a timely state corporation income tax return (Form M4, Corporation Franchise Tax Return or Form M8, S Corporation Return), has a certificate of authority to do business in Minnesota, or is otherwise exempt from this requirement. A business that is required to file a Business Activities Report that fails to do so does not have any cause of action to bring suit under Minnesota law. It cannot use Minnesota courts for all contracts executed and all causes of action that arose before the accounting period for which the business failed to file the report. The Commissioner of Revenue may disclose to litigants whether a Business Activity Report has been filed by a party to a lawsuit. Contact the Minnesota Department of Revenue for questions and copies of Form M4R. ESTIMATED TAX Individuals who are sole proprietors, partners, S corporation shareholders, and members of Limited Liability Companies generally will be required to make federal and Minnesota estimated tax payments if their income tax and - for federal purposes, self-employment tax - will exceed taxes paid through withholding and credits by $500 or more ($1,000 for federal individual income tax purposes). The tax is determined on income from all sources, not just on income from the business. Individuals may use federal Form 1040-ES, Estimated Taxes for Individuals, to determine and pay estimated taxes. To make federal tax payments, individuals may or may use the Electronic Federal Tax Payments System (EFTPS). The IRS also offers a secure service called Direct Pay with Bank Account to pay estimated taxes. Minnesota estimated payments may be made through the Minnesota Department of Revenue website using direct debit or by credit/debit card (additional fees apply). Minnesota estimated tax payments made by check must include a voucher. Payment vouchers can be created using the Payment Voucher System. For more information see payment options for Estimated Tax.
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