Minnesota Adopts a Tax Shelter Reporting Statute

Thursday, October 13, 2005 - 7:15am

Minnesota has adopted a tax shelter reporting statute that generally requires material advisors that have filed a federal Form 8264, Application for Registration of a Tax Shelter with the Internal Revenue Service, to file a duplicate of that filing with the Minnesota Department of Revenue by October 17, 2005. Penalties of as much as $50,000 can be imposed for each failure to file.

  1. Is organized in Minnesota;
  2. Is doing business in Minnesota;
  3. Is deriving income from Minnesota sources; or
  4. Has one or more investors that are Minnesota taxpayers.

Some investors in low-income housing tax credit (LIHTC) transactions may be subject to this requirement. Material advisors that have filed a Form 8264 may have a filing requirement in Minnesota if they have sponsored an LIHTC transaction (reportable transaction) that:
Although the law is not entirely clear, it appears this filing requirement may apply to Form 8264 filed with the IRS after December 31, 2000. Click here for more information from the Minnesota Department of Revenue. Questions may be directed to Stephen Tracy at 415-356-8010.