New Jersey and Minnesota: Two Models for Taxing Offshore Income

The map depicting US state strategies for taxing multinational companies has changed dramatically in the last six weeks, suggesting that states are divided on the best tax approach for businesses that move profits through offshore subsidiaries.

New Jersey and Minnesota, states where Democrats control the governors’ mansions and both legislative chambers, came to opposite conclusions over the best way to tax GILTI—global intangible low-taxed income, a new category of foreign income recognized under the 2017 federal tax law.

This week New Jersey Gov. Phil Murphy signed a bill largely abandoning his state’s authority to tax GILTI, ...