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S.F. No. 656 - Modification to apportionment of nonresident board member income
Author: Senator Ann H. Rest
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Date: February 12, 2019


Under current law, income received for the performance of services are attributable to the state where the services are received, and receipts must only be attributed to a state where corporation, partnership, or trust has a fixed place of doing business. Nonresidents must apportion income attributable to Minnesota for purposes of calculating Minnesota tax liability.

Under current Department of Revenue policy, nonresident members of no more than two corporate boards may apportion income to Minnesota by multiplying the total compensation for services performed for a board to the ratio of time spent in Minnesota working for the board and time spent in all locations working for that board. If nonresidents receive compensation for service on more than two boards, this alternative apportionment is not available.

This bill adds language to specify that, for nonresident corporate board members, receipts for their services are attributed to Minnesota based on the ratio of time physically spent in the state providing those services and the time spent out of state providing those services.

Effective beginning in tax year 2019.

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