Tax simplification bill passes the Minnesota House

Would bring state tax code in line with new federal tax cuts.

Posted: Apr 30, 2018 7:14 PM
Updated: May 2, 2018 10:43 PM

ST. PAUL, Minn. (AP) — The Minnesota House passed a bill Monday matching the state's tax code with new federal tax cuts, the first step in lawmakers' primary task this year of simplifying next year's tax filing for Minnesota residents while forestalling incidental tax hikes.

Sweeping tax cuts passed by Congress last year has made the routine of syncing state and federal tax codes a more daunting task for Minnesota lawmakers. A proposal to do so cleared the House on Monday on a 90-38 vote, with 13 Democrats joining Republicans in approving the bill.

But lawmakers still have plenty of work to do to get it done in the remaining three weeks of the session. The Republicans who control the Senate haven't yet unveiled its tax proposal — they were set to do so Tuesday morning. And the GOP Legislature's approach will be drastically different than Democratic Gov. Mark Dayton, who has proposed redirecting much of the excess tax revenue into new and expanded tax credits for Minnesota families.

Rep. Greg Davids stressed the need to finish before the mandatory May 22 adjournment, saying it would be the "disaster of all disasters" if lawmakers wait until the Legislature reconvenes next January. Dayton earlier this month said he would not call a special session for unfinished work.

"It has to be done now," said Davids, who chairs the House Taxes Committee.

Dayton's plan would redirect much of the additional revenue from conforming state taxes to federal law to Minnesota families by expanding existing tax credits and creating new ones —while leaving some Minnesota businesses with a larger bill.

Meanwhile, the House tax bill approved Monday will cut taxes for 2.1 million Minnesota residents but Davids has acknowledged about 148,000 tax filers would see an increase. It would gradually lower income taxes for Minnesota residents in the second tax bracket — for a single earner making $26,000 to $85,000 a year — from the current rate of 7.05 percent to 6.75 percent by 2020. Standard deductions would also increase in Minnesota from $13,000 for a married couple to $14,000.

Those tax breaks could be offset for some earners by the loss of certain tax deductions on work-related expenses, union dues, charitable deductions and property loss expenses from fires and some other natural disasters.

House Democrats argued the tax bill favors corporations over lower- and middle-class residents, repeating a common Democratic criticism of the federal tax bill passed late last year. They pushed to shift more of the tax burden, including by pulling in more foreign income and holdings from U.S.-based corporations, a process known as repatriation.

"It is not right that this money has been taken from us for all these years," said Rep. Frank Hornstein, a Democrat from Minneapolis. "Now we have an opportunity to repatriate it, and we should take advantage of that."

But Davids said he worries companies could challenge the federal order, and it'd be easier for the state to come up with $50 million compared to more than $150 million.

"I think we do a lot of good things with the money that comes from the money being repatriated," Davids said.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 770246

Reported Deaths: 8661
CountyCasesDeaths
Hennepin1537491923
Ramsey63444980
Dakota57071526
Anoka54052520
Washington33690331
Stearns28419253
St. Louis23735361
Scott21652160
Wright21388171
Olmsted18144120
Sherburne15515115
Carver1366556
Clay1025399
Rice9985131
Blue Earth966659
Crow Wing9518109
Chisago837263
Kandiyohi835197
Otter Tail8061105
Benton7477111
Beltrami658079
Mower645541
Douglas629190
Goodhue619985
Itasca618885
Winona611854
McLeod595770
Steele585825
Isanti573074
Morrison557767
Becker534862
Polk512879
Freeborn487642
Nobles481652
Lyon456356
Carlton446866
Nicollet434454
Pine428532
Cass425745
Mille Lacs416967
Brown411547
Todd400036
Le Sueur386332
Meeker356854
Waseca327331
Martin326336
Wabasha29538
Hubbard292744
Dodge273510
Roseau265227
Fillmore243812
Redwood240443
Wadena238429
Houston231117
Renville228549
Faribault220630
Pennington217227
Sibley211612
Cottonwood197128
Kanabec192230
Chippewa190340
Aitkin184043
Watonwan171112
Pope16148
Yellow Medicine157220
Rock155319
Jackson147315
Koochiching138619
Clearwater136618
Murray135011
Swift134619
Marshall134520
Pipestone133427
Stevens124911
Lake109521
Wilkin102814
Lac qui Parle98524
Mahnomen90312
Norman8789
Big Stone7974
Grant7869
Lincoln7845
Kittson61122
Red Lake5899
Unassigned538124
Traverse5165
Lake of the Woods4764
Cook2460

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 474151

Reported Deaths: 6785
CountyCasesDeaths
Polk74657729
Linn29194394
Scott24733274
Black Hawk20335358
Woodbury19207244
Johnson17988100
Dubuque15834229
Pottawattamie14276200
Dallas14109108
Story1288551
Warren774296
Cerro Gordo6951110
Webster6950111
Clinton6929101
Des Moines667594
Marshall641885
Muscatine6352113
Wapello5936137
Jasper578279
Lee565689
Sioux565676
Marion508191
Buena Vista491746
Plymouth463487
Henry389847
Jones370861
Washington366856
Benton359257
Bremer357168
Boone350937
Carroll346353
Crawford339347
Mahaska322856
Dickinson301052
Clay279133
Buchanan279039
Jackson273546
Kossuth271873
Hardin270249
Tama264976
Fayette260649
Delaware258546
Cedar249526
Page249328
Wright243645
Hamilton233954
Winneshiek233338
Floyd221845
Harrison217777
Madison216925
Clayton214558
Poweshiek211741
Iowa208029
Butler206638
Cass201557
Jefferson201040
Mills199929
Allamakee194753
Cherokee193844
Lyon192941
Hancock187639
Winnebago186633
Calhoun186116
Appanoose180850
Shelby178439
Louisa171052
Grundy168537
Humboldt167727
Emmet167146
Franklin164628
Mitchell164043
Union162637
Chickasaw159318
Sac157924
Guthrie155434
Montgomery142342
Palo Alto142032
Clarke141328
Keokuk139635
Monroe134335
Howard128222
Ida118641
Greene116315
Davis115225
Lucas113724
Pocahontas111423
Monona108738
Worth10818
Adair105335
Osceola94017
Fremont86111
Van Buren84221
Decatur82612
Taylor79713
Wayne74824
Ringgold67727
Audubon66814
Adams5095
Unassigned380
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