The House wasted no time in passing a bill that would conform the state to some federal tax code changes made in 2015.
After an urgency was declared, HF2, as amended, was passed 130-0 Thursday during the second floor session of the year. Sponsored by Rep. Greg Davids (R-Preston), chair of the House Taxes Committee, the bill moves to the Senate where Sen. Roger Chamberlain (R-Lino Lakes) is the sponsor.
“There is a real time crunch here,” said Rep. Paul Marquart (DFL-Dilworth), DFL lead on the House Taxes Committee. He noted that filing of income taxes begins Jan. 23, and quick action will benefit taxpayers by better lining up state and federal deductions and credits.
He said the quickest a tax conformity bill has been passed in the past dozen years was Jan. 9. “If we can do this today we can be setting all sorts of good standards.”
Revenue Commissioner Cynthia Bauerly told the House Taxes Committee earlier in the day that quick action would better ensure quicker response to Minnesota taxpayers.
She said more than 178,000 Minnesota taxpayers could be affected by enacting the conformity measure, with an expectation of receiving a refund for the 2015 changes.
“The department has a plan to make it as easy as possible on taxpayers, so that we are doing most of the work for them,” she said.
Most taxpayers would not have to file amended 2015 returns, she said. That convenience would come with a $1.6 million administrative cost, which could impact the state’s bottom line in Fiscal Year 2018. Additionally, paying for the tax deductions could mean a $21.7 million General Fund loss in the current year and $28.6 million in the 2017-18 biennium.
This bill is similar to last year’s vetoed tax bill and its conformity.
Provisions addressed in the bill would include deductions for:
The bill would also provide an increase in the working family credit; changes to the business equipment depreciation schedule; 100 percent exclusion of from the gain on sale of qualified small business stock held for more than five years; and more generous depreciation rules for leasehold and restaurant improvements.
“It will make a very big difference to many Minnesotans as they begin to file their federal and state income tax returns,” he said.
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