Recent debates in the Minnesota Legislature on individual income tax proposals have focused on their impact on and implications for businesses that are taxed under the individual income tax. Most businesses are organized as sole proprietorships, partnerships, subchapter S corporations or limited liability companies (LLCs), and pay tax on their business income under the individual income tax. C corporations pay tax under the federal and state corporate taxes with their owner/investors also paying individual income tax on the dividends and capital gains they derive from the corporation.
The following posts will give an overview of the various forms of business organization and describe how they are taxed. In particular, they will:
- Discusses the tax implications of the choice of business entity;
- Provides national and Minnesota data on entity type and business size; and
- Presents and discusses data on Minnesota returns that report partnership, S corporation, and sole proprietor income.
Minnesota Small Business Taxation Posts
- Executive Summary
- Types of Business Entities and Tax Implications
- National and State Data on Business Type and Size
- Minnesota Tax Data on Businesses Subject to Pass-through
- Appendix A: Comparative Tax Treatment of Different Entities
- Appendix B: Tax Calculations for an Example Pass-through Taxpayer
- Appendix C: 2007 Data Including Returns with Losses
The content of this and any related posts has been copied or adopted from the Minnesota House of Representatives Research Department’s Information Brief, Taxation and Small Businesses in Minnesota, written by legislative analysts Nina Manzi and Joel Michael.