Individual taxpayers have been in our spotlight so far, but Minnesota businesses of various sizes also will feel some relief from last week’s state tax cuts. As with the M1 crowd, businesses will be able to take some deductions etc. for 2013 and others in future tax years.
Among some of the wider applying changes, the Legislature repealed business-to-business sales taxes on repairs to electronic, farm and commercial equipment. A general sales tax on telecommunications equipment and a warehousing tax that had been scheduled to go into effect on April 1 also are gone.
In the work force, businesses now can help their employees with tax-free dollars for tuition and for costs of adoptions.
Here are some retroactive tax breaks for 2013:
- Businesses can take a larger deduction than in the past for contributing food from their inventories to charitable organizations.
- S Corporation shareholders can deduct donations of stock to charities to greater benefit than in the past.
- The recognition period for the built-in gains tax for S Corps has been reduced. Also, the new law allows 100 percent of gains from certain small business stock to be excluded instead of 50 percent.
- The treatment of certain payments to controlling nonprofit corporations has changed.
- Prior increases in some tax benefits of contributions of property for conservation are continued.
- Regulated investment companies now can designate an “interest-related dividend” by mailing a writing notice to shareholders.
- Restaurant and retail business owners can count on accelerated depreciation for qualifying business improvements. A change in Minnesota law eliminates the need for owners to keep different sets of records for state and federal taxing authorities.
Going forward, the new law simplified other business taxes so that separate records for Minnesota and federal tax systems now are not necessary, Gov,. Mark Dayton’s office says.
State lawmakers authorized an expansion of tax credits for startup businesses for 2014.
Check Gov. Mark Dayton’s Web site (http://mn.gov/governor/blog/the-office-of-the-governor-blog-entry-detail.jsp?id=102-121244) and the orange “Tax Changes” button on Minnesota Department of Revenue’s home page for more details.
DOR is bringing tax professionals up to speed on the latest changes this week. Revenue Commissioner Myron Frans also is holding a news conference on Thursday to discuss new state tax breaks that apply to Minnesota businesses.