Amount excluded from the Minnesota taxable estate increased, and conforming changes made.

A bill for an act

relating to taxation; estate; increasing the amount excluded from the Minnesota

taxable estate; making conforming changes; amending Minnesota Statutes 2024,

sections 289A.10, subdivision 1; 291.016, subdivision 3; 291.03, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 289A.10, subdivision 1, is amended to read:

Subdivision 1.

Return required.

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(a)
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In the case of a decedent who has an interest in

property with a situs in Minnesota, the personal representative must submit a Minnesota

estate tax return to the commissioner, on a form prescribed by the commissioner, if:

(1) a federal estate tax return is required to be filed; or

(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in

section 2001(b) of the Internal Revenue Code, made within three years of the date of the

decedent's death exceeds
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$1,200,000 for estates of decedents dying in 2014; $1,400,000 for

estates of decedents dying in 2015; $1,600,000 for estates of decedents dying in 2016;

$2,100,000 for estates of decedents dying in 2017; $2,400,000 for estates of decedents dying

in 2018; $2,700,000 for estates of decedents dying in 2019; and $3,000,000 for estates of

decedents dying in 2020 and thereafter
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$4,000,000
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.

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(b)
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The return must contain a computation of the Minnesota estate tax due. The return

must be signed by the personal representative.

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EFFECTIVE DATE.

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This section is effective for estates of decedents dying after

December 31, 2025.

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Sec. 2.

Minnesota Statutes 2024, section 291.016, subdivision 3, is amended to read:

Subd. 3.

Subtraction.

(a) For estates of decedents dying after December 31,
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2016
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2025
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,

a subtraction is allowed in computing the Minnesota taxable estate, equal to the sum of:

(1) the exclusion amount for the year of death under paragraph (b); and

(2) the lesser of:

(i) the value of qualified small business property under section
291.03, subdivision 9
,

and the value of qualified farm property under section
291.03, subdivision 10
; or

(ii)
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$5,000,000
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$6,000,000
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minus the exclusion amount for the year of death under

paragraph (b).

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(b) The following exclusion amounts apply for the year of death:

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(1) $2,100,000 for decedents dying in 2017;

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(2) $2,400,000 for decedents dying in 2018;

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(3) $2,700,000 for decedents dying in 2019; and

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(4) $3,000,000 for decedents dying in 2020 and thereafter.

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(b) The exclusion amount for estates of decedents dying in 2026 and thereafter equals

$4,000,000.

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(c) The subtraction under this subdivision must not reduce the Minnesota taxable estate

to less than zero.

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EFFECTIVE DATE.

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This section is effective for estates of decedents dying after

December 31, 2025.

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Sec. 3.

Minnesota Statutes 2024, section 291.03, subdivision 1, is amended to read:

Subdivision 1.

Tax amount.

The tax imposed must be computed by applying to the

Minnesota taxable estate the following schedule of rates and then the resulting amount

multiplied by a fraction, not greater than one, the numerator of which is the value of the

Minnesota gross estate plus the value of gifts under section
291.016, subdivision 2
, clause

(3), with a Minnesota situs, and the denominator of which is the federal gross estate plus

the value of gifts under section
291.016, subdivision 2
, clause (3):

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(a) For estates of decedents dying in 2017:

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Amount of Minnesota Taxable Estate

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Rate of Tax

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Not over $5,100,000

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12 percent

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Over $5,100,000 but not over $7,100,000

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$612,000 plus 12.8 percent of the excess over

$5,100,000

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Over $7,100,000 but not over $8,100,000

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$868,000 plus 13.6 percent of the excess over

$7,100,000

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Over $8,100,000 but not over $9,100,000

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$1,004,000 plus 14.4 percent of the excess

over $8,100,000

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Over $9,100,000 but not over $10,100,000

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$1,148,000 plus 15.2 percent of the excess

over $9,100,000

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Over $10,100,000

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$1,300,000 plus 16 percent of the excess over

$10,100,000

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(b) For estates of decedents dying in 2018 and thereafter:

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Amount of Minnesota Taxable Estate

Rate of Tax

Not over $7,100,000

13 percent

Over $7,100,000 but not over $8,100,000

$923,000 plus 13.6 percent of the excess over

$7,100,000

Over $8,100,000 but not over $9,100,000

$1,059,000 plus 14.4 percent of the excess

over $8,100,000

Over $9,100,000 but not over $10,100,000

$1,203,000 plus 15.2 percent of the excess

over $9,100,000

Over $10,100,000

$1,355,000 plus 16 percent of the excess over

$10,100,000

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EFFECTIVE DATE.

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This section is effective the day following final enactment.

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