On Tuesday, May 2, Senate Democrats passed a tax bill that raises taxes by $1.2 billion through a new mandatory worldwide reporting tax, which has not been implemented in any other state. This legislation fails to deliver meaningful tax relief and does not provide for the full repeal of the social security income tax.

“The $17.5 billion surplus, formerly $19 billion before the accounting change, will not stop Democrats from significantly increasing taxes,” said Senator Bill Weber (R- Luverne), the lead Republican of the Senate Taxes Committee. “I honestly do not believe that this bill will help our communities to develop the businesses and jobs that they need. I also do not see how this legislation will stop the migration of our retired people from Minnesota. The fact is that there are Democrats who campaigned on the full elimination of the tax on social security income. Every Republican senator would have put up votes for a clean repeal of this burdensome tax. Yet Democrats chose to break their promise to Minnesotans by not joining us in demanding this change.”

In fact, a Democrat-offered amendment to repeal the tax on Social Security included a tax increase that was so extreme, even Democrats did not have the votes to pass it.  Obviously, the surplus was not enough to provide tax relief and support their spending habits.

The tax bill includes a very controversial tax known as “worldwide” or “global” reporting. This means that any business with a presence in Minnesota will be forced to report all income, even that from outside Minnesota in a way that no other state in the country or the world requires. This risky move will affect businesses based inside and outside of the state and will likely force them to reconsider how much they are willing to invest to do business in Minnesota. 

During the floor debate, Senate Republicans attempted to offer a number of amendments, which were either struck down or ruled out of order. Among them:

• Create a permanent and automatic refund program to ensure taxpayers are first in line when there is a government surplus

• Require a supermajority vote to raise income taxes
• Eliminate the expiration of the  child care tax credit in 2030 

• Restrict the use of public safety aid to only licensed peace officers
• Prohibit funds from going to cities or counties that took actions to “Defund the Police” through reduced funding for peace officers over the last four years

Republicans did successfully amend the bill to expand the list of eligible baby products for a tax exemption.