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SF 3364

Subtraction from income provision for certain commercial loans issued by financial institutions

2025-2026 Regular Session Introduced by Jeff Howe and 2 co-sponsors

Bill allows Minnesota businesses to deduct income from certain commercial loans from state taxable income, reducing tax liability for qualifying lenders.

Author added Howe
#taxation #taxation-income
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Bill Summary · SF 3364

Legislative bill overview

SF 3364 proposes to allow Minnesota businesses a tax deduction for income derived from certain commercial loans issued by financial institutions. The bill would subtract qualifying loan income from taxable business income, effectively reducing the state tax burden for lenders on specific lending activities.

Why is this important

This provision could lower taxes for financial institutions and businesses engaged in commercial lending within Minnesota, potentially affecting state tax revenue. It may also influence lending behavior and competitiveness of Minnesota-based financial institutions in the commercial lending market.

Potential points of contention

  • Revenue impact: The fiscal cost to the state budget is unclear without knowing which loans qualify and the volume of affected lending
  • Scope definition: The bill's language about "certain commercial loans" may be vague, creating uncertainty about which lenders and loan types actually qualify
  • Equity concerns: Selective tax treatment of financial institutions and lending income could be questioned as favoring particular industries over others
  • Implementation complexity: Tax administrators may face challenges determining loan eligibility and verifying compliance

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

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