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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: 124439

Reported Deaths: 2292
CountyConfirmedDeaths
Hennepin32336965
Ramsey13342347
Dakota9251133
Anoka8093148
Stearns537035
Washington525967
Scott318534
Olmsted307029
St. Louis264763
Wright227614
Nobles214016
Clay203243
Blue Earth19707
Carver16957
Rice15789
Sherburne156221
Kandiyohi15494
Mower148912
Winona118918
Lyon9256
Waseca9129
Crow Wing87921
Chisago8552
Benton8415
Beltrami7687
Otter Tail7436
Todd7232
Steele7212
Itasca67617
Nicollet67317
Freeborn6324
Morrison6076
Douglas6043
Martin58616
Le Sueur5855
McLeod5703
Watonwan5674
Goodhue51111
Pine5090
Polk4924
Becker4893
Isanti4873
Chippewa3793
Carlton3781
Dodge3620
Mille Lacs3528
Pipestone32616
Wabasha3230
Cass3115
Hubbard3092
Meeker3073
Brown2983
Rock2971
Unassigned26553
Yellow Medicine2655
Cottonwood2620
Redwood25011
Murray2483
Fillmore2380
Sibley2383
Renville22911
Faribault2090
Jackson1951
Roseau1930
Swift1921
Wadena1880
Kanabec18610
Houston1811
Stevens1681
Lincoln1650
Pennington1631
Koochiching1624
Aitkin1542
Pope1480
Big Stone1270
Wilkin1244
Lac qui Parle1232
Lake1030
Mahnomen941
Norman940
Grant894
Marshall871
Clearwater760
Red Lake602
Traverse530
Lake of the Woods421
Kittson270
Cook110

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 107481

Reported Deaths: 1537
CountyConfirmedDeaths
Polk17984282
Woodbury682088
Johnson563830
Black Hawk519196
Linn5047126
Dubuque467952
Scott404134
Story385317
Dallas329143
Pottawattamie295644
Sioux229712
Buena Vista220012
Marshall192636
Webster170014
Plymouth153925
Wapello147162
Clinton135525
Muscatine133958
Crawford130912
Cerro Gordo124923
Des Moines12139
Warren11496
Carroll10288
Jasper102034
Henry9785
Marion92410
Tama90037
Lee8719
Wright6871
Dickinson6847
Delaware6798
Boone6778
Mahaska61422
Bremer6128
Washington61011
Harrison5768
Jackson5283
Lyon5147
Benton5031
Louisa49115
Clay4844
Hamilton4433
Winnebago43716
Winneshiek4339
Hardin4285
Poweshiek42811
Kossuth4220
Floyd41511
Jones4113
Emmet39914
Buchanan3933
Cedar3855
Iowa3776
Franklin37318
Guthrie36914
Cherokee3652
Sac3643
Clayton3503
Page3470
Butler3442
Shelby3441
Madison3432
Fayette3412
Mills3361
Allamakee3278
Chickasaw3221
Clarke3123
Cass3052
Humboldt2913
Palo Alto2861
Hancock2814
Grundy2804
Calhoun2644
Osceola2480
Howard2479
Monroe23811
Mitchell2300
Monona2281
Taylor2202
Pocahontas2092
Union2094
Appanoose2013
Jefferson1901
Lucas1866
Fremont1781
Ida1772
Greene1730
Van Buren1572
Davis1554
Montgomery1555
Keokuk1401
Adair1331
Audubon1291
Decatur1290
Worth1270
Wayne1123
Ringgold822
Adams670
Unassigned190
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