– With inflation at 40-year highs and working Minnesotans being squeezed more every day by soaring prices for gas, groceries, and energy, Minnesota Senate Republicans today made good on an early session promise to give back Minnesota’s historic $9 billion budget surplus with the largest permanent tax cut in state history.

The Minnesota Senate passed a landmark tax bill that reduces the first-tier tax rate for all filers from 5.35% to 2.80% and includes a provision to eliminate the state income tax on all Social Security benefits. The bill provides taxpayers with a much-needed $8.43 billion in relief over the next three years.

“Minnesotans are overtaxed, their budgets are being stretched thin, and a one-time gimmick check simply isn’t going to solve that,” Senator Mark Koran (R-North Branch) said. “Minnesota has a problem with taxation and the climate it is creating for residents, seniors, and businesses. Instead of using our surplus to fund growing government spending or giving a fraction of it away frivolous one-time campaign checks, Republicans are making it a priority to help Minnesotans young and old with sustainable, long-term, meaningful relief.”

• Reducing the first-tier tax rate: Minnesota’s lowest tax bracket is higher than the highest tax bracket in 24 other states. Over 2.4 million filers would benefit from the historic Republican tax rate cut, with an average annual savings of $759. A typical family making $100,000 would see a savings of $1,064 every year.
• Full elimination of the tax on Social Security income: Minnesota is one of just 13 states that tax Social Security benefits. Impacting taxpayers starting at $25,000 in income, the Social Security Income tax hits more than 407,000 Minnesota filers. None of the states that border us — Iowa, Wisconsin, Michigan, and South Dakota — tax Social Security income. Eliminating the Social Security tax would put $1.6 billion back into the hands of beneficiaries, with an average benefit of $1,254 every year.

In the last five years, Republicans passed billions in tax cuts, stopped Gov. Walz’s massive tax increases, and passed the first income rate tax cuts in 20 years. Senate Republicans will continue the fight for meaningful and permanent tax relief.