The Senate today passed a tax conformity bill, bringing Minnesota in line with recent federal tax changes and cutting tax collections by more than $100 million, said Senator Jordan Rasmusson (R-Fergus Falls). The bill was passed with bipartisan support and is headed to the governor’s desk for his signature.  

“Minnesota serves as one of the highest taxed states in our nation. That is why we must do all we can to lessen the weight on taxpayers, and the Senate’s federal tax conformity bill takes an important step to achieve just that,” Senator Rasmusson said. “While this legislation is a win for many businesses and individuals, it is troubling to see our retirees left out. It is long overdue to stop taxing Minnesota seniors on their Social Security income, and the first bill I introduced this session will end this burdensome tax once and for all.”

The bill aligns the Minnesota tax code with Federal tax changes that resulted in many tax changes, including: The Coronavirus Aid, Relief, and Economic Security (CARES) Act from 2020, The American Rescue Plan (ARPA) Act from 2021, and The Inflation Reduction Act (IRA) from 2022. 

Notable provisions in the bill:  

• Expand eligible expenses to college savings accounts through Section 529 plans 
• Exclude shuttered venue operator grants from being counted as income 
• Allows for student loan payments by employers 
• Increases the amount a business can provide for employee child care benefits 

Missing from the bill is the elimination of the tax on Social Security, or any reduction in personal tax rates. Senate Republicans tried to amend these changes to the bill, but Democrats opposed the move through parliamentary procedure.