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2009 Minnesota Corporation Franchise Tax

Includes instructions for Forms M4, M4I, M4A and M4T.

Subtraction of prior addback of reacqui-
What’s new for 2009sition of indebtedness income (short-year 
Corporate Tax InformationDesignated member for single 
ﬁlers only). If you federally elected to defer 
Websitecombined reportingdischarge of indebtedness income from 
www.taxes.state.mn.usThe designated member a unitary group se-reacquisition of a business debt in a prior 
lects to represent the other members of the year and for tax year 2009 you included 
Phone
651-556-3075 (TTY: 711 Minnesota Relay)group in tax matters is no longer required all or a portion of this amount in your 
to have Minnesota nexus. Effective for tax federal taxable income, you may subtract 
E-mailyears beginning after Dec. 31, 2008.this amount on your state return (see Form 
businessincome.tax@state.mn.usM4I, line 5p).
Factor percentages have changed
FormsThe property and payroll factors on Sched-Credit for tuberculosis testing on cattle. 
Download forms and other tax informa-ule M4A have changed from 9.5 percent For corporations, the credit is limited to 25 
tion at www.taxes.state.mn.us.to 8 percent each, and the sales factor has percent (reduced from 50 percent) of the 
We provide our publications in other formats upon changed from 81 percent to 84 percent. Ef-expenses incurred during the year to test 
request to persons with disabilities.fective for tax year 2009.your cattle for tuberculosis. Effective for tax-
able years beginning after Dec. 31, 2008.
ContentsAdditions and subtractions
Federal bonus depreciation. If you elected 
What’s new ..................... 1
on your 2009 federal return the special Revenue Notices
Revenue Notices  ................ 1deduction equal to 50 percent of the cost Revenue Notices are policy statements that 
Filing requirements  .............. 1of qualifying property placed in service, 80 provide interpretation, details or supple-
mentary information concerning Minne-
Before you ile ................... 1percent of the bonus depreciation amount 
must be added to income on your Min-sota state tax laws or rules. Recently released 
Which form should you ile?  ....... 2
nesota return (see Form M4I, line 2k). The Revenue Notices regarding corporation 
Due dates and extensions ......... 2amount added back in 2009 can be taken as franchise tax include:
Payments  .................... 2-3a subtraction in equal parts over the next •	 09-07	—	Property	Factor;	Drop	Shipping	
Filing reminders  ................. 3ﬁve years. •	 08-08	—	Credits	and	Additions	to	Federal	
 Accounting periodIncreased section 179 expensing. Min-Taxable	Income;	Net	Income	Taxes	Paid	
 When completing your returnnesota did not adopt the increased federal to Another State 
section 179 expensing for tax year 2009. •	 08-04	—	Apportionment	of	Income;	
 Early audits/bankruptcy
On the Minnesota return, 80 percent of the Two-Factor and One-Factor Weighted 
Deinitions ...................... 3difference between the expensing allowed 
Formulas
Amending your return  ............ 4for federal and state tax purposes must be 
•	 08-03	—	Treatment	of	Partnership	In-
Unitary groups  .................. 4added to income (see Form M4I, line 2n). come	of	Corporate	Partners
The amount added back in 2009 can be 
Instructions for: 
taken as a subtraction in equal parts over For a complete list of Revenue Notices and 
 M4 – Summary page . . . . . . . . . . . 5the next ﬁve years. to download copies, go to our website at 
 M4I – Income calculation ..... 6-8www.taxes.state.mn.us.	Click	on	“Legal	and	
Computer equipment donations. The research info” on the left side of your screen.
 M4A – Apportionment  addition for the amount of the enhanced 
  and minimum fee ........ 9-11charitable deduction for the donation of 
 M4T – Tax calculation .........  12computer equipment was made permanent Filing requirements
in anticipation of the federal deduction be-Corporations must ile a Minnesota tax 
ing extended beyond its curtain 2009 sunset return if they transact business or own 
date (see Form M4I, line 2p). property in Minnesota, regardless of 
Discharge of indebtedness for business their state of incorporation.
debt. Minnesota did not adopt the new fed-
eral election to defer discharge of indebted-Before you ile
ness income from reacquisition of business You need a Minnesota tax ID 
debt (see Form M4I, line 2q). Effective for Your Minnesota tax ID is the seven-digit 
taxable years ending after Dec. 31, 2008.number you’re assigned when you register 
with the department. Generally, this is the 
same as your sales and use tax or Minnesota 
employer’s withholding tax number. 
Stock No. 4009911Continued1

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General information (continued)

It’s important to include your Minnesota       Insurance companies as deﬁned in the              To pay your extension payment electroni-
tax ID on your return so that any payments     IRC	are	not	required	to	ile	a	corporation	        cally,	see	“Paying	electronically”	on	this	
you make are properly credited to your         franchise tax return.                             page. If you make your extension payment 
account.                                                                                         by	check,	you	must	use	Form	PV80.	(Do	
                                               Software-generated forms                          not	use	Form	PV80	if	you’re	making	your	
If you don’t have a Minnesota tax ID, apply    If you use tax preparation software, the 
                                                                                                 extension payment electronically or if you’re 
for one online at www.taxes.state.mn.us or     information must be in the same format as 
                                                                                                 not making an extension payment.)
call 651-282-5225 or 1-800-657-3605.           our own forms and schedules. If it’s not in 
                                               the same format, the forms and schedules 
                                               will be returned to you for correction.           Payments
Forms
                                                                                                 Unitary groups:	Payments	must	be	made	
Which form should you ile?                                                                       under	the	designated	iler.	See	“Filing	a	
                                               Due dates and extensions
Most corporations, other than S corpora-                                                         combined return” on page 4.
tions, ﬁle Form M4, Corporation Franchise      When is the return due?
Tax Return.                                    The regular due date is the 15th day of the       Paying electronically
                                                                                                 If your estimated tax payments during the 
                                               third month after the end of the calendar or 
S corporations ﬁling federal Form 1120S ﬁle                                                      last 12 months ending June 30 were $10,000 
                                               ﬁscal year. The U.S. postmark date, or date 
Minnesota Form M8, S Corporation Return.                                                         or more, you are required to pay your tax 
                                               recorded or marked by a designated delivery 
Nonresident entertainers ﬁle Form ETR,                                                           electronically starting January 1 of the fol-
                                               service, is considered the ﬁling date (postage 
Nonresident Entertainer Tax.                                                                     lowing year. Your required electronic pay-
                                               meter marks are not valid). When the due 
                                                                                                 ments would include estimated, extension 
                                               date falls on a Saturday, Sunday or legal 
Exempt organizations	ile	Form	M4NP,	                                                             and tax-return payments. 
Unrelated Business Income Tax Return.          holiday, returns postmarked on the next 
Exempt organizations include:                  business day are considered on time. When         You must also pay electronically if you’re 
                                               a return is ﬁled late, the date it is received at required to pay any Minnesota business tax 
•		exempt	organizations	with	unre-             the department is treated as the date ﬁled.       electronically, such as sales or withholding tax.
lated business income that ﬁle federal 
Form	990-T;                                    The regular due date for short-year returns       e-File Minnesota. You can pay your corpora-
•		farmers’	tax	exempt	cooperatives	as	de-     is the 15th day of the third month following      tion franchise taxes electronically over the 
ined	in	section	521	of	the	IRC;	               the month in which the short year ends. If        Internet or by phone using our e-File Min-
•	 homeowner	associations	iling	federal	       you have a short taxable year due to being        nesota system.
Form	1120-H;	                                  divested from a unitary group, and you’re 
                                                                                                 •	 To	pay	over	the	Internet,	go	to	our	
•	 political	organizations	iling	federal	      included in a combined income report for 
                                                                                                 website at www.taxes.state.mn.us and 
Form	1120-POL.	                                the short period, your return for that short 
                                                                                                 click	“Login	to	e-File	Minnesota”	on	the	
                                               period is due on the 15th day of the third 
Unit investment trusts. A unit invest-                                                           e-Services menu. Follow the prompts for 
                                               month after the tax year for the rest of the 
ment trust, as deﬁned in the Investment                                                          a business to make a corporation fran-
                                               unitary group.
Company	Act	of	1940,	is	not	considered	a	                                                        chise tax payment.
person, corporation, partnership, trust or     The regular due date for returns ﬁled by 
                                                                                                 •	 If	you	don’t	have	Internet	access,	you	can	
investment company for Minnesota income        cooperative associations	(other	than	IRC	
                                                                                                 pay by phone at 1-800-570-3329.
tax purposes if it:                            section 521 organizations) is the 15th day of 
•	 issues	periodic	payment	plan	certiicates,   the ninth month after the end of the calen-       For both methods, you’ll need your Minne-
•	 has	assets	consisting	mostly	of	a	single	   dar	or	iscal	year.	Check	the	co-op	box	at	the	    sota tax ID number, password and banking 
management company’s securities, and           top of Form M4.                                   information. Note: If you’re using the e-File 
•	 has	no	power	to	invest	in	other	types	of	                                                     Minnesota system for the ﬁrst time and 
securities.                                    If you need an extension                          you need a temporary password, call our 
                                               All corporations are granted an automatic         Registration Services ofﬁce at 651-282-5225 
If a trust meets these conditions, no return   seven-month extension to ﬁle Form M4.             or 1-800-657-3605.
needs to be ﬁled. Each holder of an interest   You are not required to submit a form to 
in the trust, however, is considered to own    Minnesota to receive the seven-month ﬁling        After you authorize the payment, you’ll re-
a proportionate share of the assets and        extension.                                        ceive a conﬁrmation number. You can can-
must report any distributions on his or her                                                      cel a payment up to one business day before 
individual income tax return.                  However, if the Internal Revenue Service          the scheduled payment date, if needed.
                                               (IRS) grants an extension of time to ﬁle 
Real estate mortgage investment conduits       your federal return that is longer than the       Credit card. You can pay by credit card 
(REMICs), valid under Internal Revenue         Minnesota automatic seven-month exten-            through	Oficial	Payments	Corpora-
Code	(IRC)	section	860D[b],	are	not	re-        sion, your state ﬁling due date is extended       tion, a national credit-card payment 
quired to ﬁle a return. Holders of an interest to the federal due date.                          service. You will be charged a fee by 
in	a	REMIC,	however,	must	report	their	                                                          Ofﬁcial Payments to use this service. 
share of income or loss on their individual    This is a ﬁling extension only, however, not      Go to www.ofﬁcialpayments.com or call 
income tax returns.                            a payment extension. Any tax not paid by          1-800-272-9829.
                                               the regular due date is subject to penalties 
                                               and interest (see instructions for lines 12 
                                               and 13 on page 5).                                                                           2
                                                                                                 Continued

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General information (continued)

ACH credit method and Fed Wire. If you
use other electronic payment methods,
such as ACH credit method or Fed Wire, be Deinitions
sure to check with your bank or Fed Wire
representative to ﬁnd out when to initiate Nexus foreign corporation (MS 290.01, subd. 5a).
Corporations that are required to ile a A foreign corporation that has nexus with
the payment in order for it to be received on
Minnesota tax return are referred to as Minnesota must ﬁle a separate return.
time. Some banks require up to three busi-
having nexus with Minnesota.
ness days to transfer funds.
Foreign operating
Paying by check Designated iler corporation (FOC)
If you are not required to pay electronically A unitary group ﬁling a combined return A domestic corporation with the follow-
and you choose to pay by check, you must must select one of its members to be the ing characteristics is a foreign operating
send your check with a personalized pay- designated ﬁler. corporation under MS 290.01, subd. 6b:
ment voucher. To obtain Form M18, PV41, The designated ﬁler’s name and tax ID 1 The corporation is part of a unitary
or PV80, go to our website and download numbers go on the face of the corporation group having at least one member with
the voucher you need. Type in the required franchise tax return and in the heading nexus in Minnesota, and
information while the voucher is on the of Column B of1each columnar schedule 2 the corporation has either:
screen and print a copy. A personalized scan attached to the return. All payments (es-
a. a valid election under section 936 of
line will be printed on the voucher using the timated, extension and tax return) will be
the IRC, or
information you entered. made under the Minnesota tax ID number
Your check authorizes us to make a one-time of the designated ﬁler and any refunds will b. at least 80 percent of the gross
electronic fund transfer from your account. be issued to the designated ﬁler. income from all sources of the corpo-
You may not receive your canceled check. ration in the tax year is active foreign
Domestic corporation business income. (Active foreign
Estimated payments Any corporation organized under the laws business income means gross income
If your estimated tax is more than $500, of the United States or any state, the Dis- that is derived from sources outside
you must make quarterly payments based trict of Columbia or political subdivision the United States, as deined in IRC
on the entire estimated amount. Payments of these, excluding the Commonwealth subtitle A, chapter 1, subchapter N,
are due by the 15th day of the third, sixth, of Puerto Rico or any possession of the part 1, and attributable to the active
ninth and 12th months of the tax year. You United States. Domestic international conduct of a trade or business in a
can make your payments electronically or sales corporations (DISCs), qualifying foreign country.)
by check using Form M18. For additional under IRC section 992(a), and foreign An FOC is not:
information, see Corporation Estimated Tax sales corporations (FSCs), qualifying
• a foreign sales corporation under IRC
instructions. under IRC section 922, are also domestic
section 922 (as amended through
corporations (MS 290.01, subd. 5).
Dec. 31, 1999) for the taxable year, or
Tax return payment
If there is an amount due on line 15 of Foreign corporation • an interest charge domestic internation-
Form M4, you can pay it electronically or by A corporation that doesn’t meet the al sales corporation under IRC sections
check using Form PV41. deﬁnition of a domestic corporation is a 992, 993, 994 and 995.
There is no late-payment penalty if at least
90 percent of your tax liability is paid by the
regular due date (see instructions for lines • Use attachment sequence numbers papers, dissolution date and distribution
12 and 13 on page 5). when assembling. Assemble Form M4 papers, or, for S corporations, a copy of
and schedules according to the attach- your federal approval.
ment numbers in the top right corners.
Filing reminders • If your M4 return shows a refund, Min-
Attach any additional information nesota law requires you to provide your
Accounting period requested and a copy of all 2009 returns banking information so that your refund
You must use the same accounting period iled with the IRS including 1120-FSCs. can be deposited electronically.
for Minnesota as you use for your federal re- Be sure to include copies of all support-
turn. If you change your federal accounting ing schedules, except for Forms 1118, Early audits/bankruptcy
period, attach a copy of federal Form 1128, 1122, 3115, 5471, 5472 and 5713. Your To request an early audit or notify the
Application to Adopt, Change or Retain a Tax Minnesota tax return will not be consid- department of bankruptcy proceedings,
Year, to your short-period Minnesota return. ered complete unless all required federal complete Form M22, Request for Early Audit
returns are attached. of Minnesota Income Tax Returns. If the
When completing your return corporation is in bankruptcy, check the “in
• Enter the beginning and ending dates • Corporate partners. Attach a copy of
of your tax year at the top of Form M4. Schedule KPC, Partner’s Share of Income, bankruptcy” box at the top of Form M4.
Credits and Modiﬁcations.
• Round amounts to whole dollars. Drop
amounts less than 50 cents and increase • If this is your ﬁnal return, check the
amounts 50 cents or more to the next correct box at the top of Form M4. Attach Continued
higher dollar. an explanation and a copy of merger 3

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General information (continued)

                                               notiﬁed by the IRS or after you ﬁled your 
Amending your return                                                                         Mail	Station	1255,	St.	Paul,	MN	55146-1255.	
Use Form M4X, Amended Franchise Tax            federal amended return. Enclose a copy of     Do not send these with your current tax 
Return/Claim for Refund, to report changes     the IRS report or your amended federal re-    return. 
to your Minnesota liability or to claim a      turn with your amended Minnesota return.
                                                                                             If you fail to report federal tax changes 
refund.                                        If the changes do not affect your Minnesota   within 180 days, you are subject to a penalty 
If the IRS changes or audits your federal      return, you have 180 days to send a letter of equal to 10 percent of any additional tax 
return or you amend your federal return        explanation to the department. Send your      due. In addition, the period of time increas-
and it affects your Minnesota return, you      letter and a complete copy of your amended    es during which we may make adjustments 
must amend your Minnesota return. File         federal return or the correction notice to:   to your Minnesota return.
Form M4X within 180 days after you were        Minnesota	Revenue,	Corporation	Franchise,	

Unitary groups

Below are guidelines for corporations          ment companies. Foreign corporations and      should be apportioned and reported by that 
whose activities are part of a unitary         investment companies that have nexus with     corporation on the combined Minnesota 
                                               Minnesota, even if they are part of a unitary tax return. Income not derived from the 
business.                                                                                    trade or business is assigned to Minnesota 
                                               group, must ﬁle separate tax returns (see 
What is a unitary business?                    Deﬁnitions on page 3).                        or another state. 
“Unitary	business”	means	business	activities	                                                To determine the income (loss) from 
                                               One member of the unitary group must be 
or operations that result in a ﬂow of value                                                  Minnesota sources for each member of 
                                               selected as the designated ﬁler to ﬁle the 
and includes both foreign and domestic                                                       the group, the total apportionable income 
                                               return, make payments, receive refunds and 
companies. A business is presumed to be                                                      (loss) of the entire group is multiplied by 
                                               represent the other members of the group 
unitary whenever there is unity of own-                                                      the weighted average of the factors of each 
                                               in tax matters.
ership, operation and use. Unity is also                                                     member.
presumed when business activities or opera-    If you are ﬁling a combined return, com-
tions are of mutual beneﬁt to, dependent       plete Schedule AFF, Afﬁliations for Com-      None of the apportionable income of a 
upon or contributory to one another, either    bined Returns, and attach it to your return.  unitary business will be considered derived 
individually or as a group.                                                                  from any particular source or place except 
                                               Using the combined-income                     as determined by using the combined- in-
Unity of ownership exists when a corpora-                                                    come method. 
                                               method 
tion is a member of a group of two or more 
                                               The combined-income method uses 
corporations and more than 50 percent of                                                     Common accounting periods
                                               formula apportionment to determine 
the voting stock of each member is directly                                                  The combined-income method for a group 
                                               what percentage of the combined business 
or indirectly owned by a common owner,                                                       of related corporations requires the income 
                                               income of a unitary group is reportable to 
either corporate or noncorporate, or by one                                                  and factors of all corporations be deter-
                                               Minnesota by each unitary group member 
or more of the member corporations of a                                                      mined on the basis of a common account-
                                               required to ﬁle a Minnesota return.
unitary group.                                                                               ing period.
                                               The apportionment factors for each mem-
Unity of operation and use can be shown by     ber are determined by dividing the corpora-   If the members have different accounting 
centralized	management	or	executive	force;	    tion’s own property, payroll and sales ﬁgures periods, the income and factor computa-
or centralized purchasing, advertising, ac-    for Minnesota by the total property, payroll  tions of all members should be computed 
counting or other controlled activity.         and sales of the entire group, both in and    for the same period as the designated ﬁler’s 
The absence of these centralized activities    outside Minnesota.                            normal accounting period (MR 8019.0405, 
does not necessarily mean that a business is                                                 subp. 4).
                                               Income and deductions from transac-
not unitary. A business is unitary if there is                                               The due date of the return is still deter-
                                               tions between members included in the 
functional integration, centralized manage-                                                  mined according to the actual accounting 
                                               combined return are eliminated to avoid 
ment and economies of scale (MS 290.17,                                                      period of the designated ﬁler ﬁling the Min-
                                               distortion of the group’s income or of the 
subd. 4).                                                                                    nesota return.
                                               numerators or denominators used by each 
                                               member in ﬁguring apportionment factors. 
Filing a combined return                                                                     Estimated tax
A unitary group must ﬁle a combined            If a corporation is part of a unitary busi-   Members of a unitary group must compute 
return. A combined return for Minnesota        ness, the entire income (loss) derived from   the estimated tax using the combined- 
may only include domestic corporations         the trade or business of the unitary group    income method. Estimated tax payments 
excluding insurance companies and invest-      is used to ﬁgure how much income or loss      must be made by the designated ﬁler only.

                                                                                                                                       4

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M4              Summary page

Complete Forms M4I, M4A, M4T and               Line 7                                                Line 14
applicable schedules before completing         Amount credited from your 2008 return                 Additional charge for underpayment of 
Form M4. You must include these forms          If your 2008 return showed an overpay-                estimated tax
with your M4 return.                           ment that was to be credited to your 2009             If you did not pay the correct amount of es-
                                               estimated tax, enter that amount on line 7.           timated tax by the due dates, you may have 
Name and address of corporation                                                                      to pay an additional charge for underpay-
Unitary groups ﬁll in the name of the des-     Line 8                                                ment of estimated tax. 
ignated	iler	(see	“Filing	a	combined	return”	  Corporate estimated tax payments
on page 4). Enter the address associated       Enter the total estimated tax payments                If your 2009 tax on Form M4, line 1 (less 
with corporate tax matters.                    made for the year.                                    any credits on lines 4, 5 and 6), is more than 
                                                                                                     $500, use Schedule EST, Additional Charge 
Line 2                                         Line 9                                                for Underpayment of Estimated Tax, to ﬁgure 
Minnesota Nongame Wildlife Fund                2009 extension payment                                the additional charge or to show that you 
You can help preserve Minnesota’s rare and     Enter any payment made by the regular due             qualify for an exception. Attach Sched-
endangered animals and plants by donating      date of your return.                                  ule EST to your return.

to this fund. Your donation will be added to                                                         Line 16
                                               Line 12
your total tax and will decrease your refund   Penalty                                               If line 10 is less than the sum of lines 3 and 
or increase your balance due.                  Penalties	are	collected	as	part	of	the	tax	and	       14, subtract line 10 from the sum of lines 3 
For more information about the fund, go        are in addition to any additional charge for          and 14. Enter the result on line 15 and enter 
to the Minnesota Department of Natural         underpaying estimated tax.                            zero on line 16.
Resources website at www.dnr.state.mn.us.      Late payment. A penalty is due if you don’t           Signature
                                               pay at least 90 percent of your total tax by          The return must be signed by a person 
Line 4 
                                               the regular due date. The penalty is 6 per-
Enterprise zone credit                                                                               authorized by the corporation. 
                                               cent of the unpaid tax on line 11.
Attach the enterprise zone credit form. 
                                                                                                     Preparer information
Forms and information are available from       There is no penalty if at least 90 percent 
                                                                                                     If you pay someone to prepare your return, 
the Minnesota Department of Employment         of your total tax is paid by the regular due 
                                                                                                     the preparer must sign the return and enter 
and Economic Development website at            date, and any remaining balance is paid by 
                                                                                                     his or her ID number and daytime phone 
www.deed.state.mn.us.                          the extended due date. You must calculate 
                                                                                                     number. If you check the box after the pre-
                                               interest, however, on the remaining balance.
                                                                                                     parer’s signature, you authorize the depart-
Line 5 
JOBZ jobs credit                               Late ﬁling. If you ﬁle after the extended due         ment to discuss the return with the preparer. 
Credits	are	available	to	qualiied	businesses	  date and owe tax, you must pay an additional 
operating in job opportunity building zones    penalty for ﬁling late. The late-ﬁling penalty        Other penalties
(JOBZ). A qualiﬁed business must have          is 5 percent of the unpaid tax on line 11.            If you understate your tax by more than 10 
signed a Business Subsidy Agreement with       Balance not paid. An additional penalty               percent or $10,000, whichever is more, the 
the zone administrator.                        of 5 percent of the unpaid tax is due if the          penalty is 20 percent of the underpayment. 
On line 5, enter any JOBZ jobs credit (com-    return is ﬁled after the regular due date with        If you intentionally don’t ﬁle a return to 
plete and include Schedule JOBZ, JOBZ Tax      a balance due, and that balance is not paid           evade paying tax, or if you ﬁle a false or 
Beneﬁts). Include any credit you may have      at the time of ﬁling.                                 fraudulent return, the penalty is 50 percent 
received as a partner of a partnership from    Payment method. If you are required to                of the tax due or refund.
line	20	of	Schedule	KPC	(include	Schedule	     pay electronically and do not, an additional          If you are negligent or intentionally dis-
KPC	with	your	return).                         5 percent penalty applies to payments not             regard the law or rules (but without intent 
To learn more about the zones, go to the       made electronically, even if a paper check is         to defraud), the penalty is 10 percent of any 
Minnesota Department of Employment             sent on time.                                         additional tax assessed.
and Economic Development website at                                                                  If you don’t ﬁle a return within 30 days of 
                                               Line 13
                                                                                                     a written demand from the department, 
www.deed.state.mn.us.                          Interest 
                                                                                                     the penalty is 5 percent of the tax or $100, 
                                               You must pay interest on the unpaid tax 
Line 6                                                                                               whichever is greater.
                                               plus penalty from the regular due date until 
Credit for tuberculosis testing on cattle                                                            Also be aware of the following:
                                               the total is paid. The interest rate for calen-
If you own cattle in Minnesota and you 
incurred expenses during the year to test      dar year 2010 is 3 percent.                           It is a gross misdemeanor to knowingly not 
your cattle for tuberculosis, enter 25 percent To ﬁgure how much interest you owe, use               ﬁle a return or pay a tax when required. If 
of your testing expenses on line 6. Ex-        the following formula with the appropriate            you willfully attempt to evade or defeat a tax 
penses incurred in a calendar year in which    interest rate:                                        or tax law, the action becomes a felony.
tuberculosis testing of cattle in Minnesota                                                          It is a felony to knowingly ﬁle a false or 
is not federally required are not allowed in   Interest = 
                                               (tax + penalty) × # of days late × interest rate ÷ 365fraudulent return or to knowingly help 
claiming the credit.                                                                                 someone prepare, or advise someone on 
                                                                                                     how to prepare, a false or fraudulent  
                                                                                                     return.                                      5

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M4I Income calculation

Line 1 2008, Public Law 110-343, Division A, title
Federal taxable income before NOL and III. (MS 290.01, subds. 19c[7] and 19h) Line 1
special deductions
c. Exempt interest income
Use the line references below to ﬁgure the Unitary groups
amount to enter from your federal return. Enter all interest income received that is Do not include foreign sales corpora-
Do not include the net income of an FOC. not included on your federal return. (MS tion income on line 1. See Schedule FSC,
290.01, subd. 19c[2]) Foreign Sales Corporation.
If the amount you enter on line 1 does not
match the amount listed on your federal d. Exempt interest dividends Because of differences in federal and
return, complete Schedule REC, Reconcilia- Enter all exempt interest dividends received state law, the amount on line 1 may not
tion, and attach it to your M4 return. (as deﬁned in IRC section 852[b][5]) that are match the amount listed on your attached
not included on your federal return. (MS federal return. If it doesn’t match, com-
If you’re ﬁling Enter amount 290.01, subd. 19c[3]) plete Schedule REC, and attach it to your
federal Form: from line: e. Deemed dividends from FOCs M4 return.
1120 28 Complete Schedule FOC, Foreign Operating For example, line 28 on a consolidated
1120-F 29, Section II Corporation, to determine the deemed divi- federal Form 1120 might not include
1120-FSC See MN Sch. FSC dends from FOCs to include on line 2e. (MS income from companies that are part of a
1120-IC-DISC 5 290.01, subd. 19c[11] and 290.17, subd. 4g) Minnesota combined return. Line 1 must
1120-ND 10 f. Foreign sales corporations (FSCs) include the income of those companies
1120-RIC 26* Use Schedule FSC to igure the amount of that meet the Minnesota deﬁnition of a
1120-REIT 22 + 21a FSC adjustment to include on line 2f. (MS unitary business but are not included on
1120-C 25 – 26a 290.01, subd. 19c[8]) line 28 on a consolidated Form 1120.
* For Minnesota purposes, the federal g. Losses from mining operations The consolidated Form 1120 does not in-
taxable income of a regulated investment Enter the amount of losses from mining op- clude income from less-than-80-percent-
company must be increased by the net erations (from Form M30, Occupation Tax) owned companies. Minnesota’s deﬁnition
capital gain exclusion provided in IRC if these losses are included in your federal of a unitary group only requires greater
section 852(b)(2)(A). The dividend paid taxable income before NOL and special de- than 50 percent ownership.
deduction must be applied by allowing a
deduction for capital gains dividends and ductions. For gains from mining operations, Federal Form 1120, line 28, may include
exempt interest dividends (IRC sections go to line 5i. (MS 290.01, subd. 19c[6]) income from the following companies
852[b][3][C] and 852[b][5]). This also h. Percentage depletion that should not be included on line 1.
applies to any undistributed capital gains Enter the amount of percentage depletion • Insurance companies
which are elected to receive IRC section deducted on your federal return under sec-
852(b)(3)(D) treatment. • Mexican and Canadian companies
tions 611 through 614 and 291 of the IRC.
included in the federal consolidated
(MS 290.01, subd. 19c[9])
return under provision 1504d of IRC.
Additions i. Extraterritorial income exclusion (IRC • Non-unitary companies. These are
Line 2 section 114) members that don’t meet the deﬁnition
Corporate partners. Be sure to include any Enter the amount of extraterritorial income of a unitary business.
addition amounts reported on the Schedule excluded under IRC section 114 from your
• Foreign operating corporations
KPC you received from the partnership (in- federal Form 8873, line 52. (MS 290.01,
(FOCs). The income of a corporation
clude Schedule KPC with your return). subd. 19c[13])
that meets the deinition of an FOC (see
a. Taxes j. Federal subpart F addback deﬁnition on page 3) is not included on
Enter the amount deducted on your federal Enter any increase in subpart F income line 1 (see Schedule FOC instructions).
return for taxes based on net income and as deined in IRC section 952(a) for the (MS 290.17, subd. 4[f])
related minimum taxes paid to Minnesota taxable year for which subpart F income is
or another state, a political subdivision of calculated, without regard to the provisions
a state, the District of Columbia, any U.S. of Division C, title III, section 304(a)(1)-(2) Do not include in this adjustment bonus
possession or any foreign country. This also of Public Law 110-343. (MS 290.01, subd. depreciation attributable to qualiied Lib-
includes the Minnesota minimum fee. (MS 19c[14]) erty Zone, Go Zone or cellulosic biomass
290.01, subd. 19c[1]; Revenue Notice 08-08) ethanol plant property.
k. Federal bonus depreciation
b. Capital losses adjustment If an activity generating bonus deprecia-
Enter any deduction for capital losses taken If you claimed a deduction for the special tion also generates a loss that you are not
on your federal return under IRC sections depreciation allowance (bonus deprecia- allowed to claim in the taxable year, the
1211 and 1212. Include any loss from the tion) under IRC section 168(k) on lines addition is limited to 80 percent of the
sale or exchange of certain preferred stock 14 or 25 of federal Form 4562, include 80 excess of the bonus depreciation claimed by
which is treated as an ordinary loss for percent of that amount on line 2k of Form the activity over the amount of the loss not
federal purposes under section 301 of the M4I. Also include 80 percent of any bonus allowed in the taxable year.
Emergency Economic Stabilization Act of depreciation amount you may have received
as a partner of a partnership on line 2k. Continued 6

- 7 -

M4I (continued)

If you’re claiming a suspended loss from • Enter the information from lines 6 and 7
Subtractions
2001–2005 on your federal return that was of your federal Form 4562 on lines 6 and
generated by bonus depreciation, multiply 7 of your Minnesota Form 4562. How- Line 5
that bonus depreciation by 80 percent and ever, if you have section 179 expensing Corporate partners. Be sure to include any
include the result on line 2k. from a partnership, use the amount from subtraction amounts reported on the Schedule
line 10 of Schedule KPC instead of line 12 KPC you received from the partnership (in-
(MS 290.01, subd. 19c[15]) clude Schedule KPC with your return).
of federal Schedule K-1 (1065).
l. Domestic production activities • Enter line 10 of your federal Form 4562 a. Tax refunds
deduction on line 10 of your Minnesota Form 4562. Include refunds of any taxes of the type
Enter the amount deducted on your federal described on line 2a that are included on
• Recalculate lines 4, 5, 8, 9, 11 and 12 of
return under IRC section 199 for domestic your federal return and were added back
your Minnesota Form 4562.
production activities. (MS 290.01, subd. �e result on
on your Minnesota return in prior years.
19c[17]) line 12 of Minnesota Form 4562 cannot
(MS 290.01, subd. 19d[9])
be more than line 1 of that form.
m. Federal subsidies for prescription b. Capital losses
Then complete the following worksheet to
drug plans Enter an amount for capital losses as al-
determine line 2n of Form M4I:
Enter any amount excluded from federal lowed under IRC sections 1211 and 1212,
taxable income under IRC section 139A for 1 Amount from line 12 from except that for losses incurred in taxable
federal subsidies of prescription drug plans. your federal Form 4562 .... years beginning after 1986, there is no car-
(MS 290.01, subd. 19c[18]) 2 Line 12 of your Minnesota ryback allowed and the carryforward period
n. Excess IRC section 179 deduction Form 4562 .............. is 15 years. Include any loss from the sale or
Minnesota did not adopt the federal 3 Subtract step 2 from step 1 exchange of certain preferred stock, which is
increase in IRC section 179 expensing for (if zero or less, enter 0) . . . . treated as an ordinary loss for federal pur-
poses under section 301 of the Emergency
tax year 2009. If, during the year, your total 4 Multiply step 3 by 80% (.80). Economic Stabilization Act of 2008, Public
investment in qualifying property was more Enter here and on line 2n Law 110-343, Division A, title III, but has
than $200,000 or if you elected more than of Form M4I ............ been treated as a capital loss for Minnesota.
$25,000 in section 179 expensing, you must
add back on your state return 80 percent o. Fines, fees and penalties (MS 290.01, subd 19d[5])
of the difference between the expensing You must add ﬁnes, fees and penalties that c. Sum of select federal tax credit
allowed for federal and Minnesota tax pur- were deducted on your federal return as a expenses
poses. You will be allowed to subtract the trade or business expense paid to a govern- The amount on line 5c includes the sum
amount of the addition in equal parts over ment entity or nongovernment regulatory of expenses associated with the following
the next ﬁve tax years. (MS 290.01, subd. body as a result of a violation of law, or the federal tax credits. Attach a list naming the
19c[16]) investigation of any potential violation of federal tax credit and the expenses associ-
law. Do not include amounts identiﬁed in ated with the credit.
If you completed federal Form 4562 to a court order or settlement agreement as
claim the section 179 expensing for federal restitution or as an amount paid to come • Research expenses. Include any re-
tax purposes, you must also complete lines into compliance with the law. (MS 290.01, search expenses that are disallowed on
1 through 12 on a separate federal Form subd. 19c[19] and 290.10, subd. 2) your federal return due to claiming the
4562 (referred to as your Minnesota Form federal research credit under IRC section
4562 in the worksheet below) to determine p. Computer equipment donations 280C(c), but only to the extent that they
the amount you need to add back for Min- If you made a qualiﬁed contribution of exceed your Minnesota research credit
nesota purposes. Write “Minnesota” at the computer technology or equipment and from Schedule RD, line 29. (MS 290.01,
top of this separate Form 4562 and include received an enhanced charitable contribu- subd. 19d[13])
it with your return. tion deduction under IRC section 170(e)
(6), include the enhanced deduction on line • Federal work opportunity credit and/or
Recalculate line 12 of your Minnesota Form 2p. (MS 290.01, subd. 19c[24]) the Indian employment credit. Include
4562 using the same information from any salary expenses disallowed due to
your federal Form 4562 and the following q. Discharge of indebtedness income the federal work opportunity credit
modiﬁcations: If you elected to defer federally the dis- under IRC section 51, and/or the Indian
charge of indebtedness income from reac- employment credit under IRC section
• Subtract $225,000 from line 1 of your quisition of business debt, you must add 45A(a). (MS 290.01, subd. 19d[2 and 14])
federal Form 4562, and enter the result back the excluded amount on your Minne- • Disability access expenditures. Include
on line 1 of your Minnesota Form 4562. sota return. You will be allowed to subtract any disability access expenditures that are
• Enter the amount from line 2 of your this amount in future tax years when you not allowed to be deducted or capitalized
federal Form 4562 on line 2 of your Min- include this income in your federal taxable on your federal return due to claiming
nesota Form 4562. income. (MS 290.01, subd. 19c[25]) the federal credit under IRC section 44(d)
• Subtract $600,000 from line 3 of your (7). (MS 290.01, subd. 19d[12])
federal Form 4562, and enter the result
on line 3 of your Minnesota Form 4562.
7
Continued

- 8 -

M4I (continued)

d. Eighty percent of royalties j. Deduction for cost depletion Line 6
Enter 80 percent of royalties, fees or similar Include an amount of cost depletion for Intercompany eliminations
income accrued or received from an FOC or property on which percentage depletion was Attach a separate list explaining any du-
foreign corporation that is part of the same added back on line 2h. (MS 290.01, subd. plication of income (loss) resulting from
unitary business as the receiving corpo- 19d[7]) intercompany transactions and enter the
ration unless the income resulting from amount on line 6. For example, if line 1 in-
k. Pollution control facilities
such payments or accruals is income from cluded $10,000 of dividends that were paid
Include an amount of depreciation as
sources within the United States as deﬁned by one member to another, you would need
allowed by Minnesota law for certiﬁed
in subtitle A, chapter 1, subchapter N, part to include that $10,000 on line 6. List any
pollution control facilities placed in service
1, of the IRC. Attach a schedule identifying item of income as a positive amount and
in a taxable year beginning before 1987 on
the sources and amounts. any item of loss as a negative amount. Do
which federal amortization deductions were
Do not include this income in the sales previously added back. (MS 290.01, subd. not include dividends received from an FSC
factor on Form M4A. Royalties, fees and 19d[8]) that are included on Schedule FSC, line 6.
similar income received from foreign corpo-
l. Extraterritorial income adjustment Line 8
rations that are not part of the same unitary
Enter 1.23 times the amount on line 2i if: Nonapportionable income
group are not eligible for the subtraction
Nonapportionable income is income that
and are to be included in the sales factor • the corporation to which the IRC section
cannot be apportioned due to provisions of
on Form M4A. (MS 290.01, subd. 19d[10]; 114 exclusion applies owned a foreign
the United States Constitution. Nonappor-
Revenue Notice 93-24) sales corporation that was an FOC (see
tionable income is allocated by assignment
deﬁnition on page 3) in any tax year end-
e. Foreign dividend gross-up based on the type of property that gives rise
ing before 1995; and
Enter the amount of foreign dividend to the income. Nonapportionable income
gross-up added to gross income for federal • you iled a return by Aug. 15, 1996, claim- must be reduced by the expenses incurred
income tax purposes required under IRC ing a deduction under MS 290.21, subd. to generate the income.
section 78. (MS 290.01, subd. 19d[1]) 4, for income received from the FOC.
Frequently used assignment rules are:
f. Interest and expenses This subtraction does not apply to income
Include interest and expenses related to received from a foreign operating company. • Income/gains from tangible property not
income exempt from federal tax, provided (MS 290.01, subd 19d[16]) employed in the trade or business is allo-
cated by assignment to the state in which
the income is taxable by Minnesota and the m. Federal subpart F subtraction the property is located.
interest and expenses are disallowed as de- Enter any decrease in subpart F income as
• Gain on the sale of a partnership interest
ductions on your federal return. (MS 290.01, deined IRC section 952(a) for the taxable
not employed in the trade or business is
subd. 19d[6]) year when subpart F income is calculated,
allocated to Minnesota in the ratio of
g. Dividends paid by national and state without regard to the provisions of Division
the original cost of partnership tangible
banks to U.S. government C, title III, section 304(a)(1)-(2) of Public
property located in Minnesota to that
National and state banks only: Include Law 110-343. (MS 290.01, subd 19d[17])
located everywhere as determined at the
any dividend paid to the U.S. government n. Subtraction for prior bonus time of the sale. If more than 50 percent
on the preferred stock of the bank owned depreciation addback of the value of the partnership’s assets are
by the U.S. government. (MS 290.01, subd If you added back 80 percent of the federal intangibles, the gain/loss is allocated to
19d[3]) bonus depreciation in any of the last ﬁve Minnesota using the partnership’s prior
h. Intangible drilling costs years, enter one-ﬁfth of the amount added year sales factor.
Enter intangible drilling costs incurred in back on line 5n. (MS 290.01, subd. 19d[18])
Other assignment rules are in MS 290.17,
taxable years beginning before 1987 that o. Subtraction for prior IRC section 179 subd. 2. Income not assigned in any particu-
were disallowed due to differences between addback lar manner is allocated by assignment to the
Minnesota and federal law at the time. If you added back 80 percent of the excess taxpayer’s state of domicile.
For costs represented by physical property, IRC section 179 deduction, enter one-ifth
All other types of income are referred to
include a deduction for depreciation as of the add-back on line 5o. (MS 290.01,
as business income, and are subject to ap-
allowed by Minnesota law. For costs not subd. 19d[19])
portionment.
represented by physical property, include a p. Subtraction for prior addback of
If you are a corporate partner, include any
deduction for cost depletion as allowed by discharge of indebtedness income
nonapportionable income you may have re-
Minnesota law. (MS 290.01, subd. 19d[4]) If you included in this year’s federal tax-
ceived as reported on line 2 of the Schedule
i. Mining companies able income any discharge of indebtedness
KPC you received from the partnership.
Enter the amount of income or gain from income from reacquisition of business debt
mining operations (from Form M30, Oc- which you elected to defer federally in a
cupation Tax) if these gains are included in prior year, enter that amount on line 5p.
your federal taxable income before NOL (MS 290.01, subd. 19c[20])
and special deductions. (MS 290.01, subd.
19d[11])
8

- 9 -

M4A Apportionment/minimum fee

Single ilers: Complete the irst               If only Column A, line 9, is zero,            In	Column	B  (and1the remaining columns 
column only.                                  Change	factor	weight	on:		     To:            as needed by unitary groups), enter your 
                                              Line	7	(property)		            0.087          total payroll paid, or incurred, or paid for 
                                              Line	15	(sales)	               0.913          labor performed in Minnesota, for the tax 
                                                                                            year in connection with the business.
Unitary groups: Enter amounts                 If only Column A, line 13, is zero, 
for the designated iler in Col-               Change	factor	weight	on:		     To:
                                              Line	7	(property)		            0.5            Sales
umn B  and complete a column 1                Line	11	(payroll)	             0.5            Line 13
for each corporation with Min-
                                              If two amounts in Column A, lines 5,          Sales or receipts
nesota nexus. Each corporation                                                              In	Column	A,	line	13,	enter	the	total	sales	
                                              9 and 13 are zero, the remaining factor 
must have a Minnesota tax ID                  weight on line 7, 11 or 15 changes to 1.00.   for	the	tax	year.	In	Column	B  (and1in the 
                                                                                            remaining columns as needed by unitary 
number.
                                                                                            groups) enter Minnesota sales only. Finan-
Minnesota uses a weighted three-factor        Property                                      cial institutions, see instructions on page 11.
formula comprised of property, payroll and    In	Column	A,	lines	1	–	4,	enter	the	total	
sales (or receipts) during the tax year to    property items for your entire business.      The sales factor includes all sales, gross 
determine the apportionment percentage.       In	Column	B  (and1remaining columns as        earnings or receipts received in the ordinary 
                                              needed by unitary group members with          course of your business, except:
For tax year 2009, the factor weights are     Minnesota nexus), enter the property items    •	 interest;
0.08 for property, 0.08 for payroll and 0.84  for your business in Minnesota.               •	 dividends;
for sales (receipts).
If you conduct all business in Minnesota      Line 1                                        •	 sales	of	capital	assets	under	IRC	section	
and are not a unitary group, complete	Col-    Inventory                                        1221;
                                              Enter the average value of inventories for    •	 sales	of	property	used	in	the	business,	
umns A and B1.	Enter	1.000	in	Column	B ,    1 your business for the tax year.                  except sales of leased property that is 
line 17, even if any or all amounts in 
Column	A,	lines	5,	9	or	13	are	zero.	                                                          regularly	sold	as	well	as	leased;
                                              Line 2                                        •	 sales	of	stock	or	sales	of	debt	instruments	
If you conduct business in and outside        Tangible property and land                       under	IRC	section	1275(a)(1);	
Minnesota (including sales of goods and       Enter the average value of total tangible 
services made outside Minnesota), and are     property (real, personal and mixed) used in   •	 income	that	qualiies	for	the	foreign	
not a unitary group,	complete	Columns	A	      connection with your business during the         source	income	subtraction;
and B1.	If	any	of	the	amounts	in	Column	A,	   tax	year.	Property	must	be	valued	at	original	•	 intercompany	sales	between	members	of	
lines 5, 9 or 13 are zero, the factor weights cost and includes land, buildings, machin-       a combined return.
on lines 7, 11 and 15 must be changed         ery, equipment and other tangible personal 
(see If Column A, line 5, 9 or 13 is zero).   property.
                                                                                            Determining Minnesota 
If you are a unitary group, Column	A	must	                                                  sales
                                              Line 3 
include the total amounts of all corpora-     Financial institutions only:                  Real property
tions included on the combined return ex-     Intangible property                           Sales, rents, royalties and other income from 
cluding	FOCs.	If	any	amounts	in	Column	A,	    For ﬁnancial institutions only, include       real property are attributed to the state in 
lines 5, 9 or 13 are zero, the factor weights intangible assets in the property factor (see which the property is located.
on lines 7, 11 and 15 must be changed (see    page 11). (MS 290.191, subd. 3)
If Column A, line 5, 9 or 13 is zero). 
                                                                                            Tangible personal property
                                              Line 4
Column	B  is1for the designated ﬁler. The                                                   Sales of tangible personal property are 
remaining columns are for each of the other   Capitalized rents                             attributed to Minnesota if the property is 
corporations in the group that have a Min-    Capitalized	rents	are	based	on	the	actual	    received by the purchaser within Minne-
nesota apportionment factor. If you need      rent for property used during the tax year.   sota and the taxpayer is taxed in this state, 
more than three columns, attach additional    Do not use an average of rents paid during    regardless of the f.o.b. point, other condi-
forms as needed.                              the year to determine capitalized rents. De-  tions of sale, or the ultimate destination of 
                                              termine the value of rented property used     the property. 
Financial institutions, read Apportionment    by multiplying the rent paid for the tax year 
for ﬁnancial institutions on page 11.         by eight.                                     Tangible personal property delivered to 
                                                                                            a common or contract carrier or foreign 
If Column A, line 5, 9 or 13 is zero                                                        vessel for delivery to a purchaser in another 
(Revenue Notice 08-04)                        Payroll                                       state or nation is a sale in that state or na-
If only Column A, line 5, is zero,            Line 9                                        tion regardless of the f.o.b. point or other 
Change	factor	weight	on:		      To:           Payroll                                       conditions of sale. 
Line	11	(payroll)		             0.087         In	Column	A,	enter	the	total	payroll	paid	or	
Line	15	(sales)	                0.913         incurred for the tax year in connection with  Continued
                                              the entire business. 
                                                                                                                                       9

- 10 -

M4A (continued) 

Property	is	received	by	a	purchaser	in	Min-       If the property is used in more than one 
                                                                                                 Minimum fee
nesota if the recipient is located in this state, state, then the sales or royalties must be ap- The franchise tax on corporations includes 
even if the property is ordered from outside      portioned to Minnesota pro rata based on       a minimum fee. This is in addition to the 
Minnesota.                                        the portion of use within this state.          regular tax and the alternative minimum 
Sales of tobacco products, beer, wine and         If the amount of use in Minnesota cannot       tax. 
other alcoholic beverages to someone              be determined, then exclude the sales or       Entities that are exempt from the minimum 
licensed to resell the products only within       royalties from both the numerator and the      fee include:
the state of ultimate destination is a sale in    denominator of the sales factor.
the destination state.                                                                           •	 regulated	investment	companies	(RICs)	
                                                  Services                                       •	 real	estate	investment	trusts	(REITs)	
Receipts from leasing or renting tangible         Receipts from the performance of services 
                                                                                                 •	 real	estate	mortgage	investment	conduits	
personal property, including ﬁnance leases        are attributed to the state in which the ser-
                                                                                                 (REMICs)
and true leases, are attributed to the state in   vices are received. 
which the property is located. Receipts from                                                     •	 corporations	that	are	a	qualiied	business	
the lease or rental of moving property are        Receipts from services provided to a cor-      and have all of their property and payroll 
attributed to Minnesota to the extent the         poration, partnership or trust may only be     within a job opportunity building zone  
moving property is used in Minnesota. The         attributed to a state in which it has a ﬁxed   (JOBZ) in Minnesota 
extent of use is determined as follows:           place of doing business.
•	 A	motor	vehicle	is	used	wholly	in	the	         If you can’t determine where the service       Line 18 
state in which it is registered.                  was received, or if it was received in a state Adjustments
                                                                                                 The minimum fee is determined by your 
•	 Receipts	from	rolling	stock	are	assigned	      where the corporation, partnership or trust 
                                                                                                 total Minnesota property, payroll and sales.  
to Minnesota in the ratio of miles trav-          doesn’t have a ﬁxed place of business, use 
                                                                                                 In some cases the property, payroll and sales 
eled in Minnesota to total miles traveled.        the location of the ofﬁce of the customer 
                                                                                                 used for computing the minimum fee will 
                                                  from which the service was ordered.
•	 Receipts	from	aircraft	are	assigned	to	                                                       be different than those used for apportion-
Minnesota in the ratio of landings in             If you can’t determine the ordering ofﬁce,     ment. The following adjustments should be 
Minnesota to total landings.                      use the ofﬁce location to which the service    made to your Minnesota factors on line 18.
                                                  was billed. 
•	 Receipts	from	vessels,	mobile	equipment	                                                      Add tangible property owned or rented 
and other mobile property are assigned                                                           that is not included on line 5 of Form M4A. 
to Minnesota in the ratio of days the             Petitioning to use another                     Some examples include construction in 
property is in Minnesota to the total days                                                       progress, idle property and any nonbusi-
                                                  method of allocation
of the tax year.                                  State law (MS 290.20, subd. 1a and Minne-      ness property or rent expense. The amounts 
                                                  sota Rules 8020.0100, subp. 3) allows entities should be determined in the same manner 
Intangible property                                                                              as the amounts on line 5.
Sales of intangible property are attributed       to request permission from the department 
to the state in which the property is used by     to allocate all, or any part of, taxable net   Subtract:
the purchaser.                                    income in a manner other than the three-       •	 JOBZ	zone	minimum	fee	adjustment	
                                                  factor formula or applying the methodology     from Schedule JOBZ (enclose Schedule 
Royalties, fees and similar income not            contained in Revenue Notice 08-04.             JOBZ).
qualifying for the subtraction on Form M4I, 
line 5d, received for the use of or privilege     To	request	permission,	complete	Form	ALT,	     •	 Any	partnership	amounts	included	on	
of using intangible property (such as pat-        Petition to Use Alternative Method of Alloca-  lines 5, 9 and 13.
ents, copyrights, trade names, franchises or      tion (see Revenue Notice 04-07).               •	 For	inancial	institutions	only,	the	
                                                                                                 amount of intangible property listed on 
similar items) are attributed to the state in     Permission	will	be	granted	only	if	you	can	    line 3.
which the property is used by the purchaser.      show that the three-factor formula does not    •	 Reduction	of	property	owned	for	a	short	
Intangible property is attributed to Min-         properly and fairly reﬂect your Minnesota      taxable year. To determine, multiply the 
nesota if the purchaser uses the property, or     income, and that the alternative formula       sum of line 1 and line 2 by a fraction: the 
rights in the property, to conduct business       you have chosen does.                          numerator is 365 minus the number of 
within this state, regardless of the location                                                    days	in	the	tax	year;	the	denominator	is	
of the purchaser’s customers.                                                                    365.
                                                                                                 Enclose a schedule showing the computa-
                                                                                                 tion and pass-through information of any 
                                                                                                 adjustments listed on M4A, line 18.

                                                                                                                                          10

- 11 -

Apportionment for inancial institutions

In general, a ﬁnancial institution is any     •	 credit	card	receivables	if	the	fees	and	   •	 interest	on	consumer	loans	not	secured	
national or state bank, bank holding          charges	are	regularly	billed	to	Minnesota;    by real or tangible personal property if 
company, savings and loan, or any other       •	 receivables	from	merchant	discount	        the	borrower	is	a	Minnesota	resident;	
corporation that does business that a bank    income if the merchant is located in Min-     •	 interest	on	commercial	loans	not	
or other ﬁnancial institution would be        nesota;	and                                   secured by real or tangible personal 
authorized to do.                             •	 securities,	money	market	instruments	      property if the proceeds are applied in 
Financial institutions complete Form          and secondary market assets apportioned       Minnesota;
M4A the same way that other corpora-          to Minnesota, in the ratio of Minnesota       •	 merchant	discount	income	if	the	mer-
tions would, with the exception of lines 3    deposits to all deposits if a regulated       chant	is	located	in	Minnesota;	
and 13.                                       ﬁnancial institution, or in the ratio of      •	 receipts	from	travelers	checks	if	pur-
                                              Minnesota gross business income to total      chased	in	Minnesota;	
Line 3                                        gross business income if unregulated.
Property factor                                                                             •	 receipts	from	credit	cards	if	regularly	
The property factor for ﬁnancial institu-     Secondary market assets are obligations       billed	in	Minnesota;
                                              that are not originally solicited or entered 
tions includes certain intangible property.                                                 •	 receipts	for	regulated	inancial	institu-
                                              into by the owner. They include secured, 
                                                                                            tions from securities, based on the ratio 
The following is considered Minnesota         consumer and commercial loans and lease 
                                                                                            of total deposits from Minnesota to 
property:                                     ﬁnancing, credit card, and merchant dis-
                                                                                            total	deposits	in	and	outside	Minnesota;	
                                              count receivables. 
•	 coin	and	currency	located	in	Minnesota;                                                  •	 receipts	for	nonregulated	inancial	
•	 lease	inancing	receivables,	to	the	extent	 Line 13                                       institutions from securities, based on 
the	property	is	located	in	Minnesota;         Sales or receipts factor                      the ratio of gross business income 
•	 secured	loans	if	real	or	tangible	personal	Financial institutions use a receipts factor  from Minnesota to total gross business 
property	is	located	in	Minnesota;             instead of a sales factor.                    income;	
•	 unsecured	(or	secured	by	intangible	       Include the gross income from activities in   •	 receipts	from	secondary	market	assets	
property) consumer loans to Minnesota         the ordinary course of business, including    treated	in	the	same	way	as	securities;
residents;                                    income from securities and money market       •	 receipts	from	the	performance	of	ser-
•	 unsecured	(or	secured	by	intangible	       instruments.                                  vices received in Minnesota. 
property) commercial loans if the pro-        The following is considered Minnesota 
ceeds	are	applied	in	Minnesota;               income: 
                                              •	 interest	income	from	loans	secured	by	
                                              real or tangible personal property located 
                                              in	Minnesota;	

Mailing label
Use this mailing label on your own envelope to mail your Form M4 and copies of your federal 
return and schedules. (Cut on the dotted line and tape to your envelope.)

                 Mail Station 1250
                 St. Paul, MN 55145-1250

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M4T  Tax calculation

Each corporation must have a                  Line 13
Minnesota tax ID number.                      Alternative minimum tax                        Annual reporting of all 
                                              Complete	and	attach	Schedules	AMTI,	           JOBZ tax beneits
                                              Alternative Minimum Tax, Calculation of        Each qualiﬁed business participating in 
Line 1                                        Income, and AMTT, Alternative Minimum          a JOBZ zone is required to annually ﬁle 
Enter the amount from line 10 of Form M4I 
                                              Tax, Calculation of Tax, if your Minnesota 
in each column. Do not divide the amount                                                     two forms with the Department of Rev-
                                              net income (Form M4I, line 8) combined 
between columns.                                                                             enue that are in addition to and separate 
                                              with your adjustments and tax preferences      from the qualiﬁed business’s tax return.
                                              (including adjusted current earnings) ex-
Line 4                                                                                       1. By October 15, 2010, each qualiﬁed 
                                              ceeds $40,000 or your allowable exemption 
Minnesota nonapportionable income                                                            business must ﬁle Form M500, Re-
Enter any income from Form M4I, line 9,       amount.
                                                                                             porting of JOBZ Tax Beneﬁts, to report 
that is assigned to Minnesota and attach a                                                   the amount of taxes the business 
                                              Line 15
schedule. Include the Minnesota nonappor-                                                    would have paid in 2009 had it not 
                                              AMT credit 
tionable income you may have received as a                                                   been in a JOBZ zone.
                                              Complete	and	attach	Schedule	AMTI	and	
partner in a partnership, as reported on line 
                                              AMTT to claim the AMT carryover credit.
1	of	Schedule	KPC.                                                                           2. By December 1, 2010, each qualiﬁed 
                                                                                             business must certify to the Depart-
                                              Line 17                                        ment of Revenue that it is in compli-
Line 6                                        Minnesota research credit                      ance with the terms of its business 
Net operating loss deduction
                                              Complete	and	attach	Schedule	RD,	Credit 
A net operating loss incurred in a prior year                                                subsidy agreement.
                                              for Increasing Research Activities, to claim 
and not previously used to offset net in-                                                    Failure to submit either of these reports 
                                              credit for research and development ex-
come	may	be	deducted	on	line	6.	Complete	                                                    will result in the business being removed 
                                              penses.
and	attach	Schedule	NOL,	Net Operating                                                       from the JOBZ program.
Loss Deduction.                               Your credit is limited to the regular fran-
                                              chise tax or the liability for tax, whichever 
Unitary groups only:	A	separate	NOL	
                                              is less.
schedule is required for each corporation 
claiming a net operating loss deduction.      Include any research credit you may have 
                                              received as a partner in a partnership, as 
Line 8                                        reported on line 17 of Schedule	KPC.
Dividends received deduction
                                              Unitary groups only: A separate Sched-
Complete	and	attach	Schedule	DIV,	Deduc-
                                              ule RD is required for each corporation 
tion for Dividends Received.
                                              claiming this credit.
Line 9
JOBZ zone exemption                           Line 21
If you are a qualiﬁed business, complete and  Employer transit pass credit
attach Schedule JOBZ to claim your zone       If you purchase transit passes to sell or give 
exemption.                                    to your employees, you may be eligible for 
                                              this credit. The credit is 30 percent of the 
If you are a corporate partner, include any   difference between the price you paid for 
JOBZ zone exemption as reported on line 3     the passes and the price charged employ-
of	the	Schedule	KPC	you	received	from	the	    ees.	Complete	and	attach	Schedule	ETP,	
partnership.                                  Employer Transit Pass Credit. 
Unitary groups only: A separate schedule      Include any credit you may have received as 
is required for each corporation claiming a   a partner in a partnership, as reported on 
zone exemption.                               line 19 of Schedule	KPC.

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