Partnership Taxes and Minimum Fee
A business partnership is subject to the minimum fee if its Minnesota property, payroll, and sales total at least $1,040,000 for the year.
The $1,040,000 figure is for the 2020 tax year and is adjusted annually for inflation.
In some cases, the property, payroll, and sales used for computing the minimum fee are different from those used to apportion Minnesota income.
Exceptions to the Minimum Fee
A partnership doesn’t have to pay the minimum fee if:
More than 80% of the partnership’s income is from farming
The partnership is a qualified business participating in a Minnesota Job Opportunity Building Zone (JOBZ), and all of its property and payroll are within the zone
Limited Liability Companies (LLCs)
The minimum fee does not apply to a one-member LLC that reports its income and other information only on that member’s Individual Income Tax return (Form M1).
However, any LLC that files as a partnership and has two or more members must pay the minimum fee if its Minnesota property, payroll, and sales total at least $1,040,000.*
*2020 threshold, this number is adjusted annually for inflation