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 Torrey Westrom (R-Alexandria). The tax relief bill, which was blocked by the DFL party last year, was finally passed with bipartisan support and signed into law by the governor on Thursday, Jan. 12.

“The Senate’s tax conformity bill will deliver much-needed financial relief to many Minnesotans, but it doesn’t go far enough,” said Senator Westrom. “That is why I brought forward amendments to give sales tax and property tax rebates to all taxpaying Minnesotans. These proposals, however, were ultimately blocked by the Democrat majority. This decision is just another reminder that they have no desire to provide significant, enduring tax relief to hardworking Minnesotans.”

The bill aligns the Minnesota tax code with Federal tax changes that resulted in many positive 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 
• Help small businesses and restaurants by excluding “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, any reduction in personal income taxes, or giving back the state surplus to taxpayers. Senate Republicans tried to amend these changes to the bill, but Democrats opposed the move through parliamentary procedures, rather than debating the merits of tax relief.