Minnesota Unrelated Business Income Tax (UBIT) Return Instructions

Unrelated Business Income Tax (UBIT) Return Instructions
2023 M4NP Instructions
2023 Minnesota Unrelated Business Income Tax (UBIT)
Includes Instructions for Forms M4NP, M4NPI, and M4NPA
Contents

General Information . . . . . . . . . . . 1–3
Before you File . . . . . . . . . . . . . . . 1
Filing Requirements . . . . . . . . . . . 1
Due Dates and Extensions . . . . 1–2
Payment Options . . . . . . . . . . . . . 2
Amending Your Return . . . . . . . . . 3
Accounting Period . . . . . . . . . . . . 3
Form M4NP Instructions . . . . . . . . 4–6
Penalty and Interest Worksheet . 5
Assembling Your Return . . . . . . . . 6
M4NPI Instructions . . . . . . . . . . . . 7–8
M4NPA Instructions . . . . . . . . . . . 9–10
Apportionment for Financial
Institutions . . . . . . . . . . . . . . . . . . . . . 11
This information is available in
alternate formats.

Website

Go to www.revenue.state.mn.us to:
• Find tax information
• Download forms
• File and pay electronically
• Sign up to receive tax-related updates

Phone

651-297-5199

E-mail

[email protected]

Address

Minnesota Department of Revenue
Mail Station 1257
600 N. Robert St.
St. Paul, MN 55146-1257

Sales Tax Exempt Status

651-296-6181 or 1-800-657-3777

What’s New

A tax bill signed into law May 24, 2023 limited the net operating loss (NOL) deduction to 70% of
the taxable net income.
In January 2023, Minnesota law was updated to recognize the Internal Revenue Code as amended
through December 15, 2022. However, some nonconformity adjustments still apply due to
retroactive Minnesota modifications enacted in the tax bill. Use Amended Return check-box on the
M4NP to calculate any remaining nonconformity adjustments.

Form TPD–Tax Position Disclosure

The new Form TPD can be used by taxpayers and tax return preparers to disclose items or positions
that are not otherwise adequately disclosed on a Minnesota tax return to avoid certain penalties. If
you file Form TPD, check the box on the front of Form M4NP. See Form TPD for more details.

Before You File

You Need a Minnesota Tax ID

Your Minnesota Tax ID is the seven-digit number you are assigned when you register with the
department. Your organization only needs one Minnesota ID number and one federal employer ID
number (FEIN) to use for all tax types (e.g., sales, withholding, lawful gambling, unrelated business
income tax, etc.).
You must include your Minnesota ID on your return so that we record your tax filings and payments.
If you do not have a Minnesota ID, you can apply online at www.revenue.state.mn.us or call
651-282-5225 or 1-800-657-3605.

Filing Requirements

Any tax-exempt organization doing business in Minnesota that is required to file one of the federal
tax returns listed below is also required to file a Minnesota Form M4NP, Unrelated Business Income
Tax Return, and pay tax on federal taxable income assignable to Minnesota.
• Form 990-T — Exempt organizations with unrelated business income and organizations liable for
proxy tax on lobbying and political expenditures
• Form 1120-C — Farmers’ cooperatives, as defined in IRC section 521
• Form 1120-H — Homeowner associations
• Form 1120-POL — Political organizations
You must attach a complete copy of your federal return, including all supporting schedules
(including all Form 990-T Schedule As), to your Form M4NP. However, copies of federal Form 990
and 990 EZ are not required with the Minnesota Department of Revenue.

Software-Generated Forms

If you use your own software, the information must be in the same format as our forms and
schedules. If it is not in the same format, the forms and schedules may be returned to you for
correction.

File Electronically

File your return electronically on our website. Go to www.revenue.state.mn.us and log in. Follow
the prompts to electronically file your Unrelated Business Income Tax return.

Due Dates and Extensions
When is the Return Due?

All filers. The due date for filing Form M4NP and paying tax owed is the same as your federal
return. The U.S. postmark date, or date recorded or marked by a designated delivery service, is
considered the filing date (postage meter marks are not valid). When the due date falls on a Saturday,
Sunday or legal holiday, returns postmarked on the next business day are considered timely. When a
return is filed late, the date it is received at the department is treated as the date filed.
1120-H filers and 1120-POL filers. File by the 15th day of the fourth month after the end of the tax
year.
1
Continued

General Information (continued)
990-T filers. File by the 15th day of the fifth month after the end of the tax year.
1120-C filers. File by the 15th day of the ninth month after the end of the tax year.
Organizations with a short taxable year. For all filers, short-year returns are due by the 15th day of the third month following the month in
which the short year ends.

Extension of Time to File

All organizations are granted an automatic seven-month extension to file Form M4NP. You are not required to submit a form to Minnesota to
receive a filing extension. If you are filing under an extension, be sure to check the “Filing Under an Extension” box in the top part of Form
M4NP.
This is a filing extension only, not a payment extension. Any tax not paid in full by the regular due date is subject to penalties and interest
(refer to Extension Payment below).

Payments

There are four types of payments for Unrelated Business Income Tax — tax return, extension, estimated tax and amended return payments.
You can pay electronically, by credit card or by check. (Refer to Payment Options below.)
Note: If you are currently paying electronically using the Automated Clearing House (ACH) credit method, continue to call your bank as
usual. If you wish to make payments using the ACH credit method, instructions are available at www.revenue.state.mn.us.

Extension Payment

Your tax is due by the regular due date, even if you are filing under an extension. Any tax not paid by the regular due date is subject to
penalties and interest (refer to instructions for lines 24 and 25 on pages 4 and 5).
If you are filing after the regular due date, make an extension payment by the regular due date to avoid penalties and interest.

Estimated Payments

An organization is not required to pay estimated taxes the first year it is subject to tax in Minnesota. If your estimated Unrelated Business
Income Tax is more than $500, you must make quarterly payments based on the total estimated amount. Payments are due the 15th day of
the third, sixth, ninth and 12th months of the tax year. Installments for a short tax year are due in equal payments on the 15th day of the third,
sixth, ninth and final months of the tax year depending on the number of months in the short tax year. No installments are required for a short
tax year of fewer than four months.
The required annual payment is the lesser of 100% of the prior year’s tax liability or 100% of the current year’s tax liability. The required
annual payment must be paid in equal installments unless certain exceptions apply or an additional charge for underpayment will be added to
your tax (refer to instructions for Schedule M15NP, Additional Charge for Underpayment of Estimated Tax).

Tax Return Payment

If there is an amount due on line 30 of Form M4NP, you must make a tax return payment.
There is no penalty if at least 90% of your tax liability is paid by the regular due date (refer to lines 24 and 25 on pages 4 and 5).

Payment Options

If your tax liability for the last 12-month period ending June 30 is $10,000 or more, or if you are required to pay any Minnesota business
tax electronically, you must pay all state taxes electronically. If you do not, we will assess a 5% penalty.

Pay Electronically

Go to www.revenue.state.mn.us and log in. To be timely, you must complete your transaction and receive a confirmation number on or
before the due date for that payment. You can cancel a payment up to one business day before the scheduled date, if needed. When paying
electronically, you cannot use a foreign bank. If you are using the system for the first time and need a temporary password, call
651-282-5225 or 1-800-657-3605.

Pay by Credit or Debit Card

Go to www.revenue.state.mn.us, and select Make a Payment. Select Credit or Debit Card. Your payment will be processed by a thirdparty vendor. The vendor charges a fee for the service.

Pay by Check

If you are not required to pay electronically and want to pay by check, send your check with a personalized payment voucher. Go to www.
revenue.state.mn.us and select Make a Payment. Select Check or Money Order. Print and mail the voucher with a check made payable
to Minnesota Department of Revenue. Your check authorizes us to make a one-time electronic fund transfer from your account. You will
not receive your canceled check.
Continued

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General Information (continued)
Amended Return Payment

If there is an amount due on line 30 of your amended return, you must make an amended return payment.

Amending Your Return

Use Form M4NP if you are amending a return for 2017 or later.
Complete an amended return if your tax liability has changed due to a change in the net operating loss calculation.
If you are amending solely due to the January 2023 Minnesota tax bill, write “Conformity” in red at the top of the Minnesota Form M4NP
while checking the Amended Return box.
You must report any change or correction made by the IRS to your federal return within 180 days of the final determination. If you agree with
the changes, file an amended M4NP. If you do not agree, send us a letter explaining why the federal changes are incorrect or why they do not
change your Minnesota tax. Include a complete copy of your amended federal return or correction notice.
If you do not report the federal changes in the manner or time required, you are subject to a penalty equal to 10% of any additional tax due.
If you amend your federal tax return, you must also file a copy with us within 180 days. Failing to report federal tax changes within 180 days
increases the period of time during which we may adjust to your Minnesota return.
Mail your amended M4NP with a letter explaining the changes to your federal income tax to:
Minnesota Department of Revenue
Mail Station 1257
600 N. Robert St.
St. Paul MN 55146-1257
Do not send these with your current tax return.

Accounting Period

Use the same accounting period for Minnesota as you use for reporting your net income under the IRC. If you change your federal accounting
period, attach a copy of federal Form 1128, Application to Adopt, Change or Retain a Tax Year, to your short-period Minnesota return.

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M4NP Unrelated Business Income Tax Return
Complete Schedule M4NPI, Income Adjustments, Deductions and Credits, and any other applicable schedules before
completing Form M4NP. You must include these schedules with your return.

Completing Your Return

• If you are filing for a fiscal year, be sure to enter the beginning and ending dates of the year at the top of Form M4NP. If you are filing a
short-taxable year return, you must include the short-year end date.
• Round amounts to whole dollars. Drop amounts less than 50 cents and increase amounts 50 cents or more to the next higher dollar.

Amended Return

If you are filing an amended return to report changes to your Minnesota liability, check the “Amended return” box near the top of your
amended return. If you amend your federal return, you must also file a copy with us within 180 days (refer to Amending Your Return on page
3).

Final Return

If this is your final return, check the “Final return” box in the top part of the return and enter your close date.
Attach an explanation and a copy of merger papers, dissolution date and distribution papers.

NAICS Codes

Enter the six-digit NAICS codes that best describe your business activities (enter at least one). If you file federal Form 990-T, use the same
codes that are reported on that form.
If you do not know your NAICS codes, go to www.census.gov/eos/www/naics and search the most recent NAICS list.

Line Instructions

Federal Taxable Income Before Minnesota Subtractions

If you are filing federal form:
• 990-T enter amount from all Form 990-T Schedule As, Part II, line 16
• 1120-C enter amount from line 25c
• 1120-H enter amount from line 17
• 1120-POL enter amount from line 17c

Line 5 — Federal Taxable Income or (Loss) after Subtractions

Total subtractions (line 4 of Form M4NP) cannot be used to create or increase a loss on line 5.
• If line 3 is a gain and the subtractions reported on line 4 are less than line 3, subtract line 4 from line 3. Enter the result on line 5.
• If line 3 is a gain and the subtractions reported on line 4 are greater than line 3, enter zero on line 5.
• If line 3 is a (loss), enter the amount from line 3 on line 5.

Line 7 — Net Operating Loss Deduction

You must limit your net operating loss deduction to 70% (.70) of line 6. A net operating loss incurred in a prior year and not previously used
to offset net income may be deducted on line 7. Complete and attach Form M4NP NOL, Net Operating Loss Deduction.

Line 12 — Proxy Tax (990-T Filers Only)

If you lobby Minnesota state or local government and pay proxy tax to the IRS, you are subject to Minnesota proxy tax on the amount
attributable to Minnesota.
Multiply 9.8% (0.098) by the amount attributable to Minnesota that is included in the amount subject to federal proxy tax. Enter the result on
line 12.

Line 16 — Minnesota Nongame Wildlife Fund

You can help preserve Minnesota’s rare and endangered animals and plants by donating to this fund. Your donation will decrease your refund
or increase your balance due. For more information, go to the Minnesota Department of Natural Resources website at www.dnr.state.mn.us.

Line 19 — Amount Credited from Your 2022 Return

If your 2021 return showed an overpayment that was to be credited to your 2022 estimated tax, enter that amount on line 19.

Line 20 — 2023 Estimated Tax Payments

Enter the total estimated tax payments made for the year.

Line 21 — 2023 Extension Payment

Enter any payment made by the regular due date of your return.
Continued

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M4NP Unrelated Business Income Tax Return (continued)
Line 24 — Penalties

To determine the amount of penalties you owe, use the following penalty descriptions to complete the worksheet on page 5. Attach a copy of
the worksheet to your return.
Late payment. A penalty is due if you do not pay at least 90% of your total tax by the regular due date. The penalty is 6% of the unpaid tax on
line 23. There is no penalty if at least 90% of your total tax is paid by the regular due date, and any remaining balance is paid by the extended
due date. You must calculate interest, however, on the remaining balance.
Late filing. If you file after the extended due date and owe tax, you must pay an additional penalty for filing late. The late-filing penalty is 5%
of the unpaid tax on line 23.
Balance not paid. An additional penalty of 5% of the unpaid tax is due if the return is filed after the regular due date with a balance due, and
that balance is not paid at the time of filing.
Payment method. If you are required to pay electronically and do not, an additional 5% penalty applies to payments not made electronically,
even if a paper check is sent on time.
Understatement of tax. If you understate your tax by more than 10% or $10,000, whichever is more, the penalty is 20% of the underpayment.
Intentional evasion of tax. If you intentionally do not file a return to evade paying tax, or if you file a false or fraudulent return, the penalty is
50% of the tax due.
Negligent or intentional disregard. If you are negligent or intentionally disregard the law or rules (but without intent to defraud), the penalty
is 10% of any additional tax assessed.
Extended delinquency. If you do not file a return within 30 days of a written demand from the department, a penalty of 5% of the tax, or
$100, whichever is greater, is added to the tax.
Note: It is a gross misdemeanor to knowingly not file a return or pay a tax when required. If you willfully attempt to evade or defeat a tax or
tax law, the action becomes a felony. It is a felony to knowingly file a false or fraudulent return; or to knowingly help someone prepare, or
advise someone on how to prepare, a false or fraudulent return.

Line 25 — Interest

You must pay interest on the unpaid tax, plus penalty, from the regular due date until the total is paid. Complete the worksheet on this page to
determine line 25.
The interest rate for calendar year 2024 is 8%. Check our website to determine the interest rate for other years.

Worksheet to Determine Lines 24 and 25

If you are paying your tax after the regular due date, you must include appropriate penalties and interest with your payment. Complete the worksheet
below using the instructions for lines 24 and 25 beginning on page 4. Attach a copy of this worksheet to your return.
1 Tax not paid by the regular filing due date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 Late payment penalty*. Multiply step 1 by 6% (.06). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 Late filing penalty. If you are filing your return after the extended due date, multiply step 1 by 5% (.05) . . . . . . . . . . . . . . . . .
4 Extended delinquency. If your return is filed after the regular due date with a balance due, multiply step 1 by 5% (.05),
or $100, whichever is greater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 Electronic payment. If you are required to pay electronically and you do not, multiply your payment amount by 5% (.05) . .
6 Penalties. Add steps 2 through 5, and enter the result here and on Form M4NP, line 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Number of days the tax is late** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8 Enter the applicable interest rate. For 2024, the rate is 8% (.08) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9 Multiply step 7 by step 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 Divide step 9 by 365 (carry to five decimal places). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11 Interest. Multiply the sum of steps 1 and 6 by step 10. Enter the result here and on line 25 of Form M4NP. . . . . . . . . . . . . . .
* If you paid at least 90% of your total tax by the regular due date and any remaining balance by the extended due date, you will not be charged a late payment
penalty.
** If the days fall in more than one calendar year, determine steps 7–11 separately for each year.

Line 26 — Additional Charge for Underpayment of Estimated Tax

If you did not pay the correct amount of estimated tax by the due dates, you may have to pay an additional charge for underpayment of
estimated tax.
If your tax on Form M4NP, line 15 (less any credits on line 18), is more than $500, use Schedule M15NP, Additional Charge for
Underpayment of Estimated Tax, to figure the additional charge or to show that you qualify for an exception. Attach Schedule M15NP to your
return.
Continued

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M4NP Unrelated Business Income Tax Return (continued)
Line 33

If you want your refund to be directly deposited into your checking or savings account, enter the routing and account numbers.
The routing number must have nine digits.
The account number may contain up to 17 digits (both numbers and letters). Enter the
number and leave out any hyphens, spaces and symbols.

You can find your bank’s routing number and
account number on the bottom of your check.

If the routing or account number is incorrect or is not accepted by your financial institution,
we will send your refund in a check.
By completing the banking information on line 33, you are authorizing the department and your financial institution to initiate electronic credit
entries, and if necessary, debit entries and adjustments for any credits made in error.

Signatures

The return must be signed by a person designated by the organization. Include the person’s title and daytime phone.
Preparer information. If you pay someone to prepare your return, the preparer must sign the return, and also fill in their PTIN and daytime
phone number. To authorize the department to discuss the return with the preparer, check the authorization box. This authorization remains in
effect until you notify the department in writing that the authorization is revoked.
Email correspondence. If the department has questions regarding your return and you want to receive correspondence by email, or have your
preparer receive it by email, enter the email address and check if it belongs to an employee of the organization or the preparer.
By providing an email address, you are authorizing the department to correspond with you or the designated person over the internet, and
you understand that the organization’s nonpublic tax data may be transmitted over the internet. You also accept the risk that the data may be
accessed by someone other than the intended recipient. The department is not liable for any damages the organization may incur as a result of
an interception.

Assembling Your Paper Return and Attachments

If you are filing a paper return, organize your Form M4NP and schedules (when required) in the following order:
1. Form M4NP, including page 2 if it is not printed on the back of your Form M4NP
2. Schedules M4NPI, M4NPA, M15NP, and M4NP NOL
3. Schedule ETP
Attach any additional information requested and a complete copy of your 2023 federal return filed with the IRS, including the Net Operating
Loss (NOL) and all supporting schedules (including all Form 990-T Schedule As). Your Minnesota tax return will not be considered complete
unless all required federal returns are attached.
Mailing label. Use the mailing label below to mail your return, with a complete copy of your federal return and supporting schedules. (Cut
on the dotted line and tape to your envelope.)

Mail Station 1257
600 N. Robert Street
St. Paul, MN 55146-1257

Continued

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M4NPI Income Adjustments, Deductions, and Credits
Additions

Include any additions you received as a partner in a partnership (include Schedule KPC with your return).

Line 1 — Additions due to federal changes not adopted by Minnesota

Enter the amount of any other additions to federal taxable income that you were unable to claim on your federal return due to federal changes
not adopted by Minnesota. Provide an explanation on the space provided.

Subtractions

Include any subtractions you received as a partner in a partnership (include Schedule KPC with your return).

Line 2

a. Advertising
Enter revenues from a newspaper published by a section 501(c)(4) organization.
b. Lawful Gambling Expenditures
Certain lawful gambling expenditures are not allowed on the federal return. Enter the amount of expenditures noted in Minnesota Statute 349
that you did not claim on your federal return.
c. Charitable Contributions
Enter the amount of charitible contributions you reported on federal Form 990-T, Part I, line 4.
d. Subtractions due to federal changes not adopted by Minnesota
Enter the amount of any subtractions to federal taxable income that you were not able to claim on your federal return due to federal changes
not adopted by Minnesota. Provide an explanation on the space provided.
e. Other Subtractions
If other subtractions enacted into law apply to you for the tax year, enter the amount on line 2d. Provide an explanation on the space provided.

Deductions

Include any deductions you received as a partner in a partnership (include Schedule KPC with your return).

Line 3

a. Federal Specific and Special Deductions
Enter the specific or special deduction you took on your federal return.
b. Other Deductions
If other deductions enacted into law apply to you for the tax year, enter the amount on line 3b. Provide an explanation on the space provided.

Credits Against Tax

Credits against tax are nonrefundable and are limited to your tax liability. Include any credits you received as a partner in a partnership
(include Schedule KPC with your return).

Line 4

a. Employer Transit Pass Credit
If you purchase transit passes to sell or give to your employees, you may be eligible for this credit. The credit is 30% of the difference
between the price you paid for the passes and the price charged employees. Complete and attach Schedule ETP, Employer Transit Pass
Credit.
b. SEED Capital Investment Credit
If you invest in a qualified business in Breckenridge, Dilworth, East Grand Forks, Moorhead or Ortonville, and the business has been certified
by the Minnesota Department of Employment and Economic Development as qualifying for the SEED capital investment program, you may
qualify for this credit. The credit is equal to 45% of the amount invested in a qualified business, up to $112,500 per year. The credit may be
carried forward for up to four years.
c. Owners of Agricultural Assets
If you are an owner of agricultural assets and sell or rent agricultural assets to a beginning farmer, you may be eligible for this credit.
d. Manufactured Home Park Credit
If you sold a manufactured home park to a cooperative, complete and attach Schedule MHP, Credit for Sales of Manufactured Home Parks to
Cooperatives. Enter the amount of your credit from Part 2, Line 2.
e. Other Credits Against Tax
If other credits against tax enacted into law apply to you for the tax year, enter the amount on line 4d. Provide an explanation on the space
provided.
Continued

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M4NPI Income Adjustments, Deductions, and Credits (continued)
Refundable Credits

Include any credits you received as a partner in a partnership (include Schedule KPC with your return).

Line 5

a. Historic Structure Rehabilitation Credit
To qualify for this credit, you must be eligible for the federal Historic Rehabilitation Credit for improving a certified historic structure located
in Minnesota and have your application approved by the State Historic Preservation Office (SHPO) of the Minnesota Historical Society. For
details, go to www.mnhs.org/shpo.
On line 5a, enter the NPS project number from the credit certificate you received from SHPO and:
• If your credit application was submitted to SHPO on or before December 31, 2017, report the credit amount shown on your credit
certificate.
• If your credit application was submitted to the SHPO after December 31, 2017, report one-fifth of the credit amount shown on your credit
certificate.
Include the credit certificate when you file your return.
b. Other Refundable Credits
If other refundable credits enacted into law apply to you for the tax year, enter the amount on line 5b. Provide an explanation on the space
provided.

Continued

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M4NPA Apportionment Calculation
Complete Schedule M4NPA if you conduct business both in and outside Minnesota.

Single-Sales Factor Apportionment

Minnesota uses the single sales factor apportionment method.
Financial institutions, read Apportionment for Financial Institutions on page 11.

Nonapportionable Income
Line 2

Nonbusiness income is income that cannot be apportioned because of the United States Constitution. Nonbusiness income is allocated by
assignment based on the type of property that gives rise to the income. Nonapportionable income must be reduced by the expenses incurred to
generate the nonapportionable income.
Frequently used assignment rules are:
• Income or gains from tangible property not employed in the trade or business is allocated to the state in which the property is located.
• To determine the gain or loss on the sale of a partnership’s interest not employed in the trade or business, divide the original cost of the
partnership’s tangible property in Minnesota by the original cost of all tangible property of the partnership. (Tangible property includes real
estate, inventory and equipment.) If you do not have these numbers, contact the partnership. If more than 50% of the partnership’s assets
are intangibles, the gain/loss is allocated to Minnesota using the partnership’s prior year’s sales factor.
Other assignment rules are in M.S. 290.17, subd. 2. Income not assigned in any particular manner is allocated by assignment to the taxpayer’s
state of domicile.
Business income is all income except nonbusiness income. Business income is subject to apportionment.

Sales

Line 4 — Sales or Receipts

Enter your sales in Minnesota for the tax year in column A and your total sales in column B.

Determining Minnesota Sales

Real Property
Sales, rents, royalties and other income from real property are attributed to the state in which the property is located.
Tangible Personal Property
Sales of tangible personal property are attributed to Minnesota if the property is received by the purchaser within Minnesota and the taxpayer is
taxed in this state, regardless of the f.o.b. point, other conditions of sale, or the ultimate destination of the property.
Tangible personal property delivered to a common or contract carrier or foreign vessel for delivery to a purchaser in another state or nation is
a sale in that state or nation regardless of the f.o.b. point or other conditions of sale.
Property is received by a purchaser in Minnesota if the recipient is located in Minnesota, even if the property is ordered from outside
Minnesota.
Sales of tobacco products, beer, wine and other alcoholic beverages to someone licensed to resell the products only within the state of
ultimate destination is a sale in the destination state.
Receipts from leasing or renting tangible personal property, including finance leases and true leases, are attributed to the state in which the
property is located. Receipts from the lease or rental of moving property are attributed to Minnesota to the extent the moving property is used
in Minnesota.
The extent of use is determined as follows:
• A motor vehicle is used wholly in the state in which it is registered.
• Receipts from rolling stock are assigned to Minnesota in the ratio of miles traveled in Minnesota to total miles traveled.
• Receipts from aircraft are assigned to Minnesota in the ratio of landings in Minnesota to total landings.
• Receipts from vessels, mobile equipment and other mobile property are assigned to Minnesota in the ratio of days the property is in
Minnesota to the total days of the tax year.
Intangible Property
Sales of intangible property are attributed to the state in which the property is used by the purchaser.
Royalties, fees and similar income received for the use of, or privilege of using, intangible property (such as patents, copyrights, trade
names, franchises or similar items) are attributed to the state in which the property is used by the purchaser.
Intangible property is attributed to Minnesota if the purchaser uses the property, or rights in the property, to conduct business within this state,
9
regardless of the location of the purchaser’s customers.
Continued

M4NPA Apportionment Calculation (continued)
If the property is used in more than one state, then the sales or royalties must be apportioned to Minnesota pro rata based on the portion of
use within this state. If you cannot get the portion of use in Minnesota, then exclude the sales or royalties from both the numerator and the
denominator of the sales factor.
Services
Receipts from the performance of services are attributed to the state in which the services are received.
Receipts from services provided to an organization may only be attributed to a state in which it has a fixed place of doing business.
If you cannot determine where the service was received, or if it was received in a state where the organization does not have a fixed place of
business, use the location of the office of the customer from which the service was ordered.
If you cannot determine the ordering office, use the office location to which the service was billed.

Line 5 — Unitary Businesses

Column A must be the total of all business activities attributable to Minnesota. Column B must include the total values of all business
activities conducted within and outside of Minnesota.
A unitary business exists whenever there is a unity if ownership, operation and use. Unity is also presumed when business activities or
operations are of mutual benefit to, dependent upon or contributory to one another, either individually or as a group. A business is unitary if
there is functional integration, centralized management and economies of scale. (M.S. 290.17, subd. 4)
Unitary Businesses Only — Sales of Non-filing Entities
All sales of a unitary business attributable to Minnesota must be included on the group’s combined return. On line 5 of the Form M4NPA,
enter all sales of the unitary business attributable to Minnesota that are not included on line 4. (M.S. 290.17, subd. 4[h])

Line 7 — Minnesota Apportionment Factor

Divide column 6a by column 6b and carry the result to six decimal places. Enter the result on line 7. This is your sales factor.
The sales factor includes all sales, rents, gross earnings or receipts received in the ordinary course of your business, except:
• Interest
• Dividends
• Sales of capital assets under IRC section 1221
• Sales of property used in the business, except sales of leased property that is regularly sold as well as leased
• Sales of stock or sales of debt instruments under IRC section 1275(a)(1)

Line 9 — Minnesota Nonapportionable Income

Enter the income included on line 2 of Schedule M4NPA that is assigned to Minnesota.

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Apportionment for Financial Institutions
In general, a financial institution is any national or state bank, bank holding company, savings and loan, or any other corporation that does
business that a bank or other financial institution would be authorized to do.
Financial institutions complete Form M4NPA the same way that other nonprofit organizations would, with the exception of sales.

Line 4 — Sales or Receipts Factor

Financial institutions use a receipts factor instead of a sales factor.
Include the gross income from activities in the ordinary course of business, including income from securities and money market instruments.
The following is considered Minnesota income:
• Interest income from loans secured by real or tangible personal property located in Minnesota
• Interest on consumer loans not secured by real or tangible personal property if the borrower is a Minnesota resident
• Interest on commercial loans not secured by real or tangible personal property if the proceeds are applied in Minnesota
• Merchant discount income if the merchant is located in Minnesota
• Receipts from travelers checks if purchased in Minnesota
• Receipts from credit cards if regularly billed in Minnesota
• Receipts for regulated financial institutions from securities, based on the ratio of total deposits from Minnesota to total deposits in and
outside Minnesota
• Receipts for nonregulated financial institutions from securities, based on the ratio of gross business income from Minnesota to total gross
business income
• Receipts from secondary market assets treated in the same way as securities
• Receipts from the performance of services received in Minnesota

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