The Minnesota Senate finally approved a repair to a legislative error that would have hit Main Street Minnesota businesses with a $15 million tax hike.

Minnesota State Senator Carla Nelson (R-Rochester), a co-author of the repair bill praised the bill’s passage but expressed frustration about the delay: “I am glad this tax error was corrected in time to protect Minnesota job providers from a tax increase, but I remain dismayed at the delay. This error was noted months ago when both Senate and House Tax Chairs sent signed correction letters to Gov. Walz. I have been here 15 years, and I can’t recall a significant mistake like this being ignored for so long. It was not factored into the budget forecast nor the Governor’s first budget proposal.

“Moving forward I hope we can work together and address urgent issues like this more effectively and more rapidly,” Senator Nelson added. “This is what hard-working Minnesotans expect of us. We should accept no less.”

The 2023 tax bill included a change to net operating loss subtractions that would have impacted small businesses with a big tax increase. The change was set to take effect in tax year 2024, but an error in the bill writing caused it to begin effective tax year 2023. As a result, small businesses and entrepreneurs would have been on the hook for $15 million more in taxes.

Senator Nelson and her Republican colleagues have been sharply critical of the delay to correct the error, and have pressed Democrats in the House and Senate Majority to fix it immediately. The chairs of the House and Senate Tax Committees made a promise to fix the mistake, but it was omitted from a tax corrections bill early in session.