Last Wednesday, Jan. 11, the Senate 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 Bill Weber (R-Luverne). The tax relief bill was passed with bipartisan support and signed into law by the governor on Thursday, Jan. 12.

“The tax conformity legislation is a perfect example of a bipartisan accomplishment that will improve the lives of Minnesotans,” said Senator Weber. “However, this should not be the only tax relief we pass this session. While our state has a historic surplus of $17.6 billion, Minnesota families’ budgets are facing great uncertainty. It is imperative to take larger steps to lessen their financial burden and provide meaningful, permanent tax relief.”

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.