Annual Filing Requirements for Minnesota LLCs

Learn about the annual report and tax filing obligations for Minnesota limited liability companies.

To establish and operate a Minnesota limited liability corporation (LLC), you must prepare and submit a number of paperwork with the state. This article discusses Minnesota LLCs’ most essential continuing reporting and state tax filing responsibilities.

Renewal every year

The state of Minnesota requires you to renew your LLC on a yearly basis. You may renew by mail (blank forms are available for download) or online at the Secretary of State’s website. Only a few pieces of information are necessary to complete the renewal, including your LLC’s state-issued file number, official name, registered agent and office address, the name and street address of at least one LLC manager, and a few other basic characteristics.

Each year, the yearly renewal must be submitted by December 31.

State Corporation Tax

Most LLCs are pass-through tax corporations when it comes to income taxes. In other words, the burden for paying federal income taxes is passed via the LLC to the individual LLC members. LLCs do not pay income taxes by default; only its members do. Minnesota, on the other hand, charges a separate fee to LLCs for the privilege of conducting business in the state. The charge is progressive and applies to LLCs with in-state property, wages, sales, or revenues of $500,000 or more.

Furthermore, the owners of some LLCs prefer to have their firms taxed as corporations. This decision is made by submitting IRS Form 2553 to the IRS. (The form is available on the IRS website.) When an LLC elects to be taxed as a corporation rather than as a pass-through entity, the firm must submit a separate tax return. Minnesota, like practically every other state, has a corporate income tax (which it calls a corporation franchise tax). In Minnesota, the corporation tax is typically 9.8% of taxable income. Additional or alternative taxes, on the other hand, may apply. In general, if your Minnesota LLC is taxed as a corporation, it will be required to pay state income taxes or fees. The Minnesota Department of Revenue receives the company franchise tax return (Form M4) (DOR)

Employer Taxes in the State

Do you have workers in your LLC? If this is the case, you must pay employer taxes. Some of these taxes are paid to the federal government (the IRS) and are not addressed in this section. (However, it is important to understand that federal employer tax duties begin with getting a federal employer identification number (EIN).) Minnesota employers, on the other hand, must pay state taxes.

To begin, you must withhold and pay employee income taxes to the DOR. Begin by registering your company with the DOR, either online or in print form (Form ABR, Application for Business Registration). After you’ve enrolled, you must submit withholding taxes on a regular basis (for example, monthly or quarterly). This must be done online or by phone; paper returns are not accepted by the DOR. Visit the DOR website for additional information.

You’ll also need to register to pay state unemployment insurance (UI) taxes. These levies are collected by the Minnesota Unemployment Insurance Program (UIMN). These taxes must be registered for online. Then, on a quarterly basis, you must e-file reports and payments. Check out the UIMN website for further information.

Taxes on Sales and Use

If your LLC sells items to Minnesota clients, you must collect and remit sales tax. This means you’ll have to apply for a Minnesota state tax ID number with the DOR, either online or by phone. Then, each year, you must submit a sales tax return to the state. Visit the DOR website for additional information.

Other States Registration

If you want to do business in states other than Minnesota, your LLC may need to be registered in any or all of those states. The exact states concerned will determine if you are needed to register: each state has its own regulations for what defines conducting business and whether registration is required. For registration reasons, having a physical presence (a business location) in a state, recruiting personnel in a state, or soliciting business in a state (through telephone, print advertisements, mail, or the Internet) are sometimes considered conducting business. Obtaining a certificate of authority or comparable document is normally required for registration.