Revenue Notice #13-08: Income and Corporate Franchise Tax - Federal Entity "Check the Box" Classification - Revocation and Replacement of Revenue Notice # 98-08 and Revenue Notice # 97-03

The Minnesota Supreme Court’s decision in Ashland Inc. v. Comm’r of Revenue, No. A16-1257 (Minn. Aug. 2, 2017), revoked Revenue Notice 98-08, which was effective for tax periods beginning after December 31, 1996, and before January 1, 2013.

Introduction

Revenue Notice #98-08, which superseded Revenue Notice #97-03, sets forth the Department’s position regarding federal check-the-box classifications, including when the Department could recognize a check-the-box election by a foreign eligible entity pursuant to Minnesota Statutes, section 290.17, subdivision 4(f). That statute was amended by 2013 Minnesota Laws, chapter 143, article 6, section 28. The amendment made the policy statement regarding foreign eligible entities in Revenue Notice #98-08 obsolete.

Department Position

Pursuant to Treasury Regulations §§ 301.7701-1 through 301.7701-3, the Internal Revenue Service provides an elective system of entity classification commonly known as check-the-box. For Minnesota individual income and corporate franchise tax purposes, the Department will follow elections made by eligible domestic and foreign entities pursuant to these federal regulations.

Revenue Notice #98-08 and Revenue Notice #97-03 are revoked. This revenue notice is effective for taxable years beginning after December 31, 2012, which is the effective date of the law change discussed above.

Signed by Assistant Commissioner Susan Von Mosch and published in the Minnesota State Register on December 23, 2013.