Senator Karin Housley (R-St. Mary’s Point) joined her Republican colleagues in passing a tax bill known as “tax conformity” from the Senate floor. The legislation brings Minnesota’s tax code into conformity with the federal tax overhaul passed by Congress last year and protects nearly all Minnesotans from a tax increase. An estimated 82 percent of Minnesota residents will see a tax reduction under the bill.
“Minnesotans are already reaping the benefits of the historic tax overhaul passed by Congress. This legislation makes sure those benefits are felt at the state level, too,” said Senator Housley. “This plan protects the wages of nearly every Minnesotan, ensures simplicity when filing your taxes, and actually cuts the income tax rate for millions of Minnesota families. This is great news.”
The legislation drops the lowest income tax rate by a quarter of a percent and allows Minnesotans to keep popular tax deductions for mortgage and home equity loan interest, property taxes, and charitable donations. In total, nearly 2.1 million Minnesota households will benefit from these changes.
In addition to an income tax rate reduction, the legislation maintains the state personal and dependent exemption of $4,150 and the state standard deduction of $13,000, extends the $5 million angel investor tax credit, fully conforms to Section 179 of the Internal Revenue Service (IRS) tax code, and uses the FAGI model to separate the state tax code from the federal tax code. Finally, the legislation includes an automatic reduction of individual income tax rates when a significant projected budget surplus exists.
“Minnesota is losing opportunities to our more tax-friendly neighbors,” continued Senator Housley. “This legislation is about making sure more Minnesota families can keep more of their hard-earned money. If we empower Minnesotans and enrich our economy, our state can move forward on a path to prosperity for all – and this bill is a great start.”
Senator Karin Housley is in her second term representing Senate District 39, which includes Stillwater, Forest Lake, Lake Elmo, and other communities in Chisago and Washington counties. She serves as chairwoman of the Aging and Long-Term Care Policy Committee.