LLC Annual Report and Tax Filing Requirements in Minnesota

If you decide to form a limited liability company (LLC), you'll need to keep up with the related state filing and tax requirements. If you have a Minnesota LLC, you must submit an annual renewal and pay the appropriate business taxes to the state.

Below, you can learn about the most important ongoing reporting and state tax filing requirements for LLCs in Minnesota. (If you're looking for information about other states' LLC requirements, you can review our article on LLC tax and filing requirements.)

Minnesota LLC Annual Renewal

The State of Minnesota requires you to file an annual renewal for your LLC with the Minnesota Secretary of State (SOS). You can file your renewal online through the Business Filings Online page of the SOS website. You can search by your business name or file number.

Only a few pieces of information are required to complete the renewal, such as:

• your LLC's state-issued file number
• your LLC's name
• your LLC's registered agent and office address
• the name and street address of at least one LLC manager, and
• a few other basic details.

The annual renewal must be filed each year by December 31. As of 2023, there's no filing fee.

State Business Taxes in Minnesota

Most LLCs are considered "pass-through tax entities" (PTEs) for the purpose of income taxes. As a PTE, the LLC's responsibility for paying federal income taxes passes through the LLC to its members. By default, the LLC doesn't pay taxes on its income, only the members do.

As an LLC member, you'll report and pay your share of the LLC's income on your personal tax return. You'll file your individual and business tax returns with the Minnesota Department of Revenue (DOR). You can register your business through MN e-Services to file returns and pay taxes for your LLC.

Might pay a minimum fee. Minnesota imposes a separate fee on LLCs, except for single-member LLCs, for the privilege of doing business in the state. This fee is sometimes called a "franchise tax." The fee is graduated and applies to LLCs that have, as of 2023, at least $1.16 million of in-state property, payroll, sales, or receipts. The figure is adjusted each year for inflation. Visit the DOR's minimum fee webpage for current figures and details. (The minimum fee also applies to corporations and S corporations.)

Electing corporate tax status. Typically, LLCs are taxed as partnerships (a type of PTE) by default. However, you can choose to have your LLC taxed as a corporation for federal tax purposes by filing IRS Form 2553 with the IRS. If you elect to have your LLC taxed as a corporation, your LLC will also be taxed as a corporation in Minnesota and you'll need to pay the state's corporation income tax. Minnesota calls its corporation income tax a "corporation franchise tax." As of 2023, the corporation franchise tax is a flat 9.8% of taxable income. File the state's corporation franchise tax return (Form M4) with the DOR.

Electing PTE tax status. Many states are now allowing PTEs to pay income tax on behalf of their owners. Minnesota is one of those states. If you have a Minnesota LLC that's taxed as a partnership, you can elect to have your LLC pay a PTE tax on behalf of the LLC members. You make this election by filing Schedule PTE and also Schedule PTE-RP (if any members are Minnesota residents). The PTE tax rate is equal to Minnesota's highest individual income tax rate. You can find more information on the DOR's PTE tax webpage.

Minnesota Employer Taxes

If your LLC has or plans to have employees, you must pay employer taxes to the federal and state governments. Make sure you get an employer identification number (EIN) from the IRS if you haven't done so already so you can report and pay these taxes as an employer.

Withholding employee wages. As a Minnesota employer, you must withhold and pay employee income taxes to the DOR. You'll need to first register your business with the DOR. You can use the DOR's MN e-Services to register. If you already have a tax account, you can add a withholding tax account. After you've registered your business, you'll need to file withholding taxes periodically depending on your federal deposit schedule and the total tax withheld. Most employers will file returns quarterly and deposit tax payments either monthly or semiweekly. Visit the withholding tax section of the DOR website for more.

Unemployment insurance (UI) tax. In addition to withholding taxes, your LLC will probably need to pay state UI taxes. Your business must register for an employer account with the Minnesota UI Program (UIMN), a program under the Minnesota Department of Employment and Economic Development. You can register online through the Employer Self-Service System or by phone. Every quarter, you'll need to file quarterly reports and make payments. Visit the UIMN website for more information.

Minnesota Sales and Use Tax

If your LLC plans to sell taxable goods or services to customers in Minnesota, you must collect and pay sales tax to the DOR. You must register your business for a Minnesota tax ID number (if you haven't done so already) and for a sales and use tax account. You can register your business online through MN e-Services.

You'll need to file your sales and use tax returns and pay the sales tax owed either monthly, quarterly, or annually. Your filing frequency depends on the amount of your reported sales tax. Use MN e-Services for your sales tax filings and payments.

Check out the sales and use tax section of the DOR website for additional details.

LLC Registration in Other States

Sometimes, owners organize their LLCs in one state but do business in another. For example, you might organize your LLC in Minnesota but do business in Wisconsin. If you do business outside your home state, you might need to register as an out-of-state (foreign) LLC in the states where you have business activities.

Typically, you'll need to qualify as a foreign LLC if your business has a physical presence in a state, hires employees in the state, or advertises directly to residents of the state. Every state has rules and requirements for when an out-of-state business must register. You should check each relevant state's laws around qualifying as a foreign business.

If you'd like more information about registering as a foreign LLC, check out our state guide to qualifying to do business outside your state.

More Information About Minnesota LLCs

If you'd like additional guidance on running your LLC, check out the articles in the LLC section of our website. These articles have information about operating agreements, asset protection, and frequently asked questions. If you have a particularly complex legal question or you need help determining your tax liability, consider talking to a Minnesota business attorney. They can help you navigate the reporting and tax filing processes for your Minnesota LLC.