field_block:node:page:title

Foreign Disregarded Entities

field_block:node:page:body

The department’s policy on foreign disregarded entities depends on the taxpayer’s tax year and the taxpayer’s check-the-box election on their federal form.

Minnesota Reporting and Check-the-Box Impacts

For tax years beginning 2013, Minnesota follows the federal check-the-box election on federal Form 8832.

Minnesota does not have a separate disclosure form for disregarded entities.

This table shows what a foreign entity must do based on the tax year and the federal check-the-box election.

Tax years beginning Election D Election E Election F
 After 12/31/2012

The foreign entity files a separate Form M4, Corporation Franchise Tax Return.

Minnesota follows the federal election. If the foreign entity is included in the federal return, the foreign entity is included in the Minnesota return for income and apportionment purposes.

 Minnesota follows the federal election. If the foreign entity is included in the federal return, the foreign entity is included in the Minnesota return for income and apportionment purposes.
After 12/31/1996 and before 1/1/2013 The foreign entity files a separate Form M4. Income and apportionment factors of the foreign entity must be excluded from the Minnesota return. Income and apportionment factors of the foreign entity must be included in the Minnesota return.

 

Policy History

The Minnesota Supreme Court’s decision in 2017 Ashland Inc. v. Commissioner of Revenue retroactively overturned the department’s previous policy, for tax years 1997 - 2012, which was to exclude foreign disregarded entities from the unitary group. After the court decision, the department changed its policy for tax years 2013 and later. (See Revenue Notice 13-08.)

  • Print Page

Contact Info

Email
Phone
Hours
Address
field_block:node:page:field_last_updated
Last Updated