The Minnesota Senate is set to hear and pass a tax bill in special session that includes federal conformity, small business and farmer tax relief, and the first income tax rate cut in nearly 20 years. The bill also includes additional local government aid (LGA) for cities and towns. Minnesotans will have an easier time filing taxes, be able to keep more of their income, property tax burdens are reduced for businesses, and cities can invest in their community because of this tax bill.
“A tax cut for the middle-class, federal conformity, local government aid, and business tax relief make this a good bill. We know we have a strong economy now, these changes will keep the economy strong in the future,” said Senator Roger Chamberlain (R-Lino Lakes), chair of the Senate Tax committee.
Minnesota is known for its high tax status and some of the highest income taxes in the nation. When signed, the bill moves the second-tier income tax rate from 7.05% to 6.8% beginning in 2019. A strong economy and years of surpluses means workers should be able to keep more of their income without cuts to the core functions of government.
Minnesota businesses will also get major relief from a $50 million annual reduction in the statewide property tax. Reducing this tax burden allows them to invest in their business and employees instead, and keep our strong economy growing. The LGA increases help communities fund public safety, infrastructure improvements, and emergency services to invest in their community without having to increase local property taxes.
Finally, the federal Tax Cuts and Jobs Act put Minnesota out of alignment with certain federal provisions in 2018. The 2019 tax bill brings Minnesota into conformity with the federal tax code and simplifies the burdensome process that beleaguered filers in 2018.