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HF 173

Income and corporate franchise tax; research credit modified.

2025-2026 Regular Session Introduced by Jeff Dotseth and 5 co-sponsors

Minnesota bill modifies research and development tax credits for businesses under income and corporate franchise taxes, potentially affecting state revenue and R&D investment incentives.

Introduction and first reading, referred to Taxes
#corporationsandpartnerships #taxation-income
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Bill Summary · HF 173

Legislative bill overview

HF 173 modifies Minnesota's research and development tax credit under the state's income and corporate franchise tax systems. The bill adjusts how businesses can claim credits for qualifying research activities and expenses. Specific modifications to the credit structure, eligibility criteria, or calculation methods would be detailed in the bill's provisions.

Why is this important

Tax credits for research and development activities influence business investment decisions in innovation-focused sectors like technology, manufacturing, and life sciences. Changes to these credits can affect state competitiveness for attracting or retaining companies engaged in R&D, while also impacting state tax revenue. Minnesota's approach to R&D tax incentives shapes whether the state remains attractive to research-intensive industries.

Potential points of contention

  • Revenue impact: Modifying the credit could either reduce state tax collections (if credits are expanded) or remove tax benefits businesses currently rely on (if credits are restricted)
  • Eligibility and definition disputes: Disagreement over what activities qualify as "research" and whether the definition is too broad, too narrow, or appropriately targeted
  • Effectiveness questions: Debate over whether R&D tax credits actually drive additional research investment or primarily benefit companies that would conduct research anyway

Compiled from official sources — confirm details with the bill’s official record.

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