As December’s Tax Cuts and Jobs Act benefits seem to keep coming, Minnesota’s response to the tax reform has been a complicated challenge to provide a positive benefit to as many taxpayers as possible while not punishing others with tax increases.
After a months-long process the tax chair Sen. Roger Chamberlain has presented a tax bill to the Senate tax committee. The bill was written by the Republican lawmakers as a response to Gov. Mark Dayton’s plan that could possibly leave businesses with a higher tax bill. Republicans in the House have criticized Dayton’s proposal as a tax increase across all levels.
The Senate proposal will mean that tax reductions would be triggered automatically when there are budget surpluses. The state revenue commissioner would also be required to reduce the income tax rate and corporate tax rate by one-tenth of 1 percent if the November economic forecast projects an adequate surplus, according to the Minnesota Public Radio.
Meanwhile, a bill in the HouseThe bill would also increase the standard deduction from $13,000 to $14,000, and protect property tax deductions, according to CBS Minnesota.
The Minnesota legislature has been struggling to sync the state’s tax code with the new federal government tax code in order to avoid a nightmare for next year’s tax filing season. There is less than a month left in this legislative session to flesh out the bill and what it will mean for taxpayers.
Local business groups generally like the proposal.
“We’re not going to be able to get everything put back the way it was because we are a high-tax state,” House Tax Committee Chairman Greg Davids is quoted as saying by the WIZM News Talk.
Republicans argue that the potential tax increases are nothing in comparison to Gov. Mark Dayton’s proposal to extend a 2 percent tax on health care providers.
WIZM News Talk says that Davids expects his bill will clear the Taxes Committee and will be on the House floor in the next week.