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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.

Confirmed Cases: 61839

Reported Deaths: 1707
CountyConfirmedDeaths
Hennepin19569839
Ramsey7717268
Dakota4507106
Anoka3752115
Stearns290920
Washington216345
Nobles17686
Olmsted176723
Scott159020
Mower11052
Rice10388
Blue Earth9325
Wright8975
Carver8783
Clay78840
Sherburne7328
Kandiyohi7021
St. Louis57319
Todd4292
Lyon4253
Freeborn3601
Steele3512
Nicollet34713
Watonwan3230
Benton3203
Winona26416
Beltrami2440
Crow Wing23814
Le Sueur2261
Martin2095
Chisago2041
McLeod2020
Goodhue1999
Otter Tail1983
Cottonwood1780
Becker1611
Pipestone1589
Polk1554
Waseca1490
Itasca14612
Douglas1441
Carlton1420
Unassigned13141
Dodge1290
Isanti1290
Pine1290
Murray1241
Chippewa1071
Morrison931
Wabasha930
Brown892
Faribault890
Meeker872
Rock850
Sibley842
Koochiching793
Jackson790
Pennington751
Cass742
Mille Lacs723
Fillmore670
Renville665
Lincoln580
Grant563
Swift551
Yellow Medicine520
Roseau520
Pope480
Houston420
Aitkin411
Norman400
Kanabec371
Redwood360
Hubbard350
Wilkin343
Marshall290
Wadena270
Mahnomen271
Red Lake240
Big Stone220
Lake210
Stevens180
Clearwater140
Traverse110
Lac qui Parle80
Cook50
Lake of the Woods40
Kittson30

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 49380

Reported Deaths: 942
CountyConfirmedDeaths
Polk10444208
Woodbury373452
Black Hawk315766
Linn242888
Johnson211819
Dallas189835
Buena Vista179412
Scott174314
Dubuque169831
Marshall145026
Pottawattamie133228
Story117315
Wapello90533
Muscatine85148
Webster8268
Crawford7313
Sioux6433
Cerro Gordo63417
Warren5721
Tama55429
Jasper48127
Wright4751
Plymouth47011
Clinton4164
Dickinson3844
Louisa37814
Washington30510
Boone2623
Hamilton2511
Franklin24512
Bremer2307
Clarke2043
Clay2011
Carroll1942
Emmet1934
Des Moines1872
Shelby1861
Hardin1840
Marion1750
Poweshiek1608
Benton1601
Floyd1582
Allamakee1564
Jackson1561
Mahaska14217
Guthrie1355
Cedar1341
Jones1332
Buchanan1291
Henry1274
Madison1252
Butler1252
Hancock1212
Lee1183
Humboldt1181
Pocahontas1172
Delaware1171
Lyon1152
Harrison1101
Cherokee1101
Clayton1063
Taylor1000
Winneshiek971
Iowa971
Page950
Monona910
Kossuth900
Mills890
Palo Alto880
Jefferson870
Calhoun862
Winnebago860
Sac860
Fayette850
Osceola840
Grundy801
Mitchell790
Cass791
Union781
Monroe748
Lucas734
Worth670
Davis612
Montgomery604
Chickasaw550
Appanoose513
Howard500
Fremont430
Greene430
Keokuk371
Van Buren361
Ida310
Adair300
Audubon291
Decatur250
Ringgold231
Wayne201
Adams160
Unassigned10
Rochester
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