While one of Minnesota's most extremist groups is whining about tax legislation, it's worth reading about a bill that Representative Greg Davids, R-Preston, said is "really going to help the people of Minnesota..."
At Session Daily, Rob Hubbard reports in With bipartisan support, House passes tax conformity bill:
On the seventh day, the House didn’t rest, but instead passed its first bill of 2023.
By a 132-0 vote, the House passed HF31, which would bring the state’s tax code into conformity with federal tax law on 46 provisions that have been signed into law by U.S. presidents since 2019.
Sponsored by Rep. Aisha Gomez (DFL-Mpls), the bill’s changes would – according to the Revenue Department -- need to be signed into law by Friday for the department to make the appropriate changes on state tax forms in time for filing.
The Senate is slated to consider an almost identical bill (SF25) Wednesday.
The bills have been amended in both bodies to extend the deadline for amended filings pertaining to previous tax years, as the bills’ provisions will inspire many individuals and corporations to amend their filings for tax years 2019 through 2021.
In touting the House bill, Gomez spoke of how it addresses tax treatment for student loans and the hospitality industry, such as for restaurants and performance venues affected by the pandemic.
“The shuttered venues provision really, really needs to be taken care of,” Rep. Greg Davids (R-Preston) said. “That and all of the other conformity pieces are really going to help the people of Minnesota.”
The simplest summary of the bill is this: Any state taxes that reference either federal adjusted gross income or federal taxable income will be altered, as definitions for calculating those two figures have been changed by seven federal acts since late 2019. Those acts have borne such nicknames as the CARES Act, the American Rescue Plan Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act.
Updates at the state level mostly pertain to additions, subtractions, deductions and credits that would be changed because of a new definition of federal adjusted gross income or federal taxable income. Included among them are charitable contribution deductions, the dependent care credit and working family credit, and property tax refunds.
Rep. Pat Garofalo (R-Farmington) was encouraged by the bipartisanship that went into crafting the bill.
“I hope that this is a sign of things to come that, for those items that we do agree on, we can work on both sides of the aisle to enact those things individually, as single bills,” he said.
How much tax relief will this bring to Minnesotans? From a press release from the House DFL communications staff:
Today, the Minnesota House acted quickly to pass an early federal tax conformity bill, HF 31. HF 31 will make several changes to bring Minnesota into conformity with federal tax law. This will result in over $100 million in tax cuts to a wide range of Minnesotans while simplifying future tax filings. This efficient and unified action is just the beginning of an effective legislative session under House DFL leadership.
“As the incoming Taxes Chair, this was a clear priority for our caucus. I am incredibly proud that our team was able to put this together and get it out the door in the second week of session,” said Rep. Aisha Gomez (DFL - Minneapolis,) Chair of the Taxes Committee. “I hope to continue this momentum as we work to create a fair and equitable tax system which allows us to build a Minnesota which works for everyone.”
Among the many provisions in the bill is one that would ensure that forgiven student loans are not taxable as income. Should President Biden’s student loan forgiveness go into effect, this will guarantee Minnesotans with student loans receive the full benefit. By passing this bill within the first two weeks of session, the Department of Revenue will be able to incorporate these measures in time for this year’s tax filing season. This will greatly reduce the administrative burden on individuals and businesses this tax season.
While something, it's not a big break. Last week, Minnesota Public Radio's Brian Bakst had a preview in Mini-tax bill moves fast at Capitol, but big breaks will wait.
Photo: The new roll at the Minnesota House. Via Minnesota House DFL twitter.
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