ST. PAUL – Today Senator Warren Limmer (R- Maple Grove) voted for a tax corrections bill to repair mistakes from the rushed 2023 session that resulted in nearly $365 million in tax increases. The bill addresses changes for individual tax rates but leaves out corrections for small businesses and entrepreneurs.

“The correction we approved today is long overdue. I was happy to vote for tax cuts today to ensure that individuals are not facing even more tax increases simply because the bill language had a mistake,” Limmer said. “We know that mistakes happen and it’s good to make sure the law is corrected as soon as possible.”

The 2023 tax bill unintentionally used the 2019 standard deduction amounts for the starting point in tax year 2024 instead of the inflation adjusted amounts. Without updating this provision, filers would see their taxable income increase when filing their 2024 taxes by about $350 million total. Because it doesn’t affect filers this year, the fix has no fiscal impact to the state. 

“However,” Limmer continued, “I will always advocate for our small businesses who cannot claim a legitimate net operating loss deduction this year. This deduction is used by mom-and-pop shops, main street businesses, and entrepreneurs who might be facing a tough year for any number of reasons. This was a mistake acknowledged by both tax committee chairs, and the tax commissioner, and it really needs to be fixed sooner, rather than later.”

Senate Republicans offered an amendment to include the Net Operating Loss date change in the bill, it was defeated on party lines. Not fixing the Net Operating Loss date will mean small businesses and entrepreneurs will pay about $14.8 million more in taxes this year. This is in addition to the $10 billion in tax increases Democrats passed last year.