The Twin Cities Tax Climate Competitive According to Report

Published On: 15th August 2014

From the internet

A new report says that the Twin Cities isn’t so bad after all when it comes to taxes.

There was an announcement made early in June by Cardiovascular Systems that they would be building a new multi-million dollar headquarters and research facility in New Brighton. This actually didn’t get a lot of attention due to the fact there is a lot of expansion occurring throughout the Twin Cities.

But what this development underscores is a report that was released by KPMG International. The report stated that the Twin Cities has an overall tax structure for business that is very competitive, ranking it second for research and development companies, such as technology and medical firms.

Minneapolis and St. Paul may not be as low tax as Ireland, which is where Medtronic is relocating its legal headquarters, but friendly tax policies make the Twin Cities ideal for businesses.

The Twin Cities holds the rank of 17th for having the most competitive tax structure among the 51 highest-ranked international cities and ranks eighth among the 31 highest-ranked metro areas in the U.S.

For firms that put a great deal of money in research and development, such as the medical product companies, Minneapolis and St. Paul rank second in the United States, which makes them eighth in the world.

Minnesota’s tax credit for research and development has helped improved the result for the Twin Cities in this study. This is especially true since Minnesota has made the research and development credit refundable. What this means is that companies can receive the cash support that they need for their research and development, even if they do not have any income tax liability. The refundable research and development credits are a rare exception in the United States. In other words, they are not normal.

Minneapolis is a city that is ranked in the top five large cities that have the most favorable tax structures for the research and development sector.

The Minnesota Revenue Commissioner is very pleased with the findings of KPMG.

This shows how there is a trade-off and that businesses looking for locations that are tax friendly can search for the lowest tax. However, there is not always economic growth where the tax is friendly and that is something that businesses should consider. In the Twin Cities, the economic growth is there with the low taxes.

When KPMG conducted their study, they looked at the totality of business taxation and how the states treat the different components of taxation, such as the research and development credits that Minnesota gives and how those credits work.

The 10 percent nominal corporate tax rate in Minnesota can be half or even less after the companies utilize the state and local subsidies. Corporations can receive everything from forgivable loans to research credits. They can also receive rebates for creating jobs and when they use reusable fuels.

Another aspect that makes Minnesota ideal for research and development companies is the rich talent pool of medical technology employees.