On Thursday, Senator Jerry Relph (R-St. Cloud) and the Minnesota State Senate voted to pass legislation known as a “tax conformity” bill. The legislation brings Minnesota’s tax code into conformity with the federal tax overhaul passed by Congress last year and protects nearly all Minnesotans from a tax increase.

“Minnesotans are already reaping the benefits of the historic tax overhaul passed by Congress. This legislation makes sure those benefits are felt at the state level, too,” said Senator Relph. “This plan protects the wages of nearly every Minnesotan, ensures simplicity when filing your taxes, and actually cuts the income tax rate for millions of Minnesota families. This is great news.”

The legislation drops the lowest income tax rate by a quarter of a percent and allows Minnesotans to keep popular tax deductions for mortgage and home equity loan interest, property taxes, and charitable donations. In total, nearly 2.1 million Minnesota households will benefit from these changes, with an estimated 82 percent of Minnesota residents seeing an income tax reduction.

In addition to an income tax rate reduction, the legislation maintains the state personal and dependent exemption of $4,150 and the state standard deduction of $13,000, extends the $5 million angel investor tax credit, fully conforms to Section 179 of the Internal Revenue Service (IRS) tax code, and uses the Federal Adjusted Gross Income model to separate the state tax code from the federal tax code. Finally, the legislation includes an automatic reduction of individual income tax rates when a significant projected budget surplus exists.

“This is a good first step toward addressing some of the challenges Minnesota is facing with our tax structure. We need to make our state more tax-friendly, and this legislation is a great step forward,” continued Senator Relph. “This legislation is about making sure more Minnesota families can keep more of their hard-earned money.”

Senator Jerry Relph, of St. Cloud, is in his first term representing District 14, which includes St. Cloud, Waite Park, and other communities in Benton, Sherburne, and Wright counties.