ST. PAUL, MN—Conferees of the House and Senate Tax Omnibus Conference committee announced Friday agreement on a tax bill that would cut taxes for more than 2.2 million Minnesotans. The bill includes what would be the first income tax rate reduction in nearly two decades, cutting the two lowest income tax rates. The bill also preserves a number of important deductions at the state level, a priority of the Senate and Governor Dayton. The spreadsheet detailing the House and Senate agreement can be found here
Under the House and Senate agreement, the 1st income tax bracket will drop from the current 5.35% to 5.3% this biennium and 5.25% beginning in FY2019. The 2nd income tax bracket will drop from the current 7.05% to 6.95% this biennium, and 6.85% beginning in FY2019. The reduction in the lowest income tax rate was a priority of the Senate, the reduction in the second income tax bracket was a priority of the House. The agreement switches the starting point for Minnesota’s income tax from federal taxable income to federal adjusted gross income, a priority of the House, Senate and the Governor.
"This proposal would be a victory for middle class families including what would be the first income tax rate cut in nearly two decades, and represents a serious effort on the part of the legislature to reach agreement with the governor," said Rep. Greg Davids, R-Preston, Chair of the House Taxes Committee. "This issue is too important to wait until next year — we are committed to working with the governor in the final days of session so Minnesotans can avoid hassles, headaches, and tax increases next year."
“The Republican tax plan rewards 82% of working families with a middle-class tax cut, protects 99.8% of Minnesotans from a tax increase, and prioritizes economic growth. It will allow Minnesotans to keep more of their hard-earned money, and provide a good starting point toward larger reforms in the future,” said Sen. Roger Chamberlain, R-Lino Lakes, Chair of the Senate Taxes Committee.
The conference committee met Friday to review the proposal publicly, and is not expected to meet again until Monday or Tuesday.