How to move your company out of Minnesota and keep the EIN [step-by-step]

Attorney and CPA Chad D. Cummings presents this timely presentation on the five features of Minnesota’s tax code that make the state uniquely expensive for business owners. Minnesota taxes long-term capital gains at a higher effective rate than ordinary income through a surtax that few business owners discover until the year they sell. The top individual income tax rate is 9.85 percent, the fifth highest in the country, so one million dollars of pass-through income generates a $98,500 state tax bill that would be zero in Florida or Texas. The corporate income tax rate is 9.8 percent, the second highest in the nation, and the state also imposes an alternative minimum tax plus inclusion of certain foreign subsidiary income. Minnesota is one of the few states that maintains an alternative minimum tax on individuals, requiring many taxpayers to calculate liability twice and pay the higher amount. The legislature is considering a one percent annual wealth tax on non-real assets exceeding ten million dollars. Minnesota also maintains a 16 percent top estate tax rate and a split-roll property tax that shifts more of the burden onto commercial property. Every one of Minnesota’s five neighbors offers a lower tax burden. South Dakota imposes no income tax. The most expensive state in its region is surrounded by states competing for its residents and businesses by cutting rates while Minnesota responds by proposing a wealth tax. Learn more about transfering your company out of Minnesota: https://www.cummings.law/redomestication/move-business-out-of-minnesota/