Partnership Taxes and Minimum Fee


​A business partnership is subject to the minimum fee if its Minnesota property, payroll, and sales total at least $1,050,000 for the year.

The $1,050,000 figure is for the 2021 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.

The minimum fee is determined when you complete Form M3, Partnership Return. For more information, see Form M3 instructions.

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 $1,050,000.*

*2021 threshold, this number is adjusted annually for inflation

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