Minnesota's Proposed Wealth Tax

You thought the CA billionaire tax proposal was bad.

Minnesota introduced a proposed wealth tax effective for 2026.

 The tax is annually imposed equal to 1% of the taxable wealth of an individual or trust in excess of $10,000,000.

Unlike California’s billionaire tax proposal, this would be an annual tax.

Unlike prior Federal wealth tax proposals, there would be no credit for unrealized gains being taxed in multiple years.

Taxable wealth is:

(1) the value of all of a taxpayer's property, real or personal, tangible or intangible, but excluding property with a situs outside of Minnesota; minus

(2) the sum of all debts and financial obligations owed by the taxpayer.

Situs of property" means, with respect to:

(1) real property, the state or country in which it is located;

(2) tangible personal property, the state or country in which it is normally kept or located; and

(3) intangible personal property, the state or country in which an individual taxpayer is domiciled or the state of which a trust is a resident.

The value of a taxpayer's property must be calculated in the same manner as the value of a gross estate under Internal Revenue Code Section 2031.

So the big difference is that the MN law excludes real or personal property outside Minnesota.

If passed, Minnesota would face the same lawsuits that the CA Billionaire Tax Act would face by imposing a tax that is retroactive to January 1.