The 2018 legislative session is underway and I couldn’t be happier to be back in St. Paul representing the values that our community holds dear. This year’s legislative session is shaping up to be a busy one and I am looking forward to continuing my work to ensure that Minnesota remains an outstanding place to live, work, and raise a family.
Much of my time this first week was spent in the House Tax Committee where we heard from the Department of Revenue as they outlined the potential effects of not pursuing state conformity with updated federal tax codes.
The 2017 federal tax law, enacted last December, changed the federal tax code substantially. Without the state responding to these changes through tax conformity there will be complex issues that the revenue department cannot easily mitigate. Filings will likely be delayed or simply unable to be processed.
Additionally, a Revenue Department report indicates that with conformity and no other policy changes an additional half-million in new state taxes could be collected from Minnesotans in the current biennium and more than $1 billion in the 2020-21 biennium. This tax increase would likely not affect every single taxpayer or business in Minnesota, but the effects would be widespread nonetheless.
Clearly, such a tax increase on Minnesota families and businesses is unacceptable. Thus, this puts lawmakers in a bit of a bind. If we do nothing, tax filings will be almost impossible for the Department of Revenue to process. If we fully conform to the federal changes, some Minnesotans will likely see a tax increase due to the way our current state tax code is written. States that have a high tax rate like Minnesota have some adverse effects from the federal tax reduction bill. The result is this incentivizes our state legislature to streamline and reduce the state tax excesses and create a tax code that incentivizes the private economic growth and greater private sector prosperity.
Either way, conformity will likely happen this year. Myself and my Republican colleagues in the House will be advocating for conformity that not only ensures that tax filings will be able to be processed, but that Minnesotans will be held harmless if the state does indeed begin collecting additional revenue.
Just last session, the state enacted one of the largest tax relief bills in our state’s history. That tax cut combined with the federal reform means that Minnesotans will be keeping as much of their hard-earned money as ever before. I am committed to ensuring that Minnesotans see the full benefit of both of these pieces of tax reform.
Stay tuned for more information on this as session progresses.
As always, I am available to answer any legislative questions you may have. Feel free to contact me at firstname.lastname@example.org or by phone at 651-296-4229.