A series of bills has recently been introduced that would impose a variety of new taxes in Minnesota. NFIB has, and will continue, to encourage the Legislature to explore policies that improve Minnesota’s tax competitiveness and bolster economic growth – rather than entertaining new ways to increase taxes on Minnesotans.

See below for a brief summary of some of the new tax issues that are being debated.

Sales Tax on Advertising Services

Senate File 4878 / House File 4343 seeks to expand Minnesota’s Sales & Use Tax to apply to advertising services – both digital and non-digital. As written, this would apply to a broad array of advertising services, including but not limited to billboard advertising, place-based advertising, design services related to the creation of advertisements, search engine marketing, lead generation optimization, web campaign planning, and more.

Small businesses across Minnesota are already struggling with rising operating costs and a tax climate that is not conducive to economic growth. They’ve also been hit with a new Paid Family & Medical Leave payroll tax, as well as increased unemployment insurance assessments. NFIB is concerned that this new tax will add additional cost pressures and will disproportionately impact small businesses that use these services as part of an affordable marketing strategy.

This bill was heard in both the Senate and the House, and it was laid over for further consideration in both bodies. NFIB provided testimony in opposition to the bill in both committees.

“Wealth” Tax

House File 4616 seeks to impose a new annual tax on “wealth” at a rate of 1%. Under the bill, “wealth” is broadly defined to include “the value of all a taxpayer’s property, real or personal, tangible or intangible.” In other words, this is a tax on total asset value – not income. As written, this tax would be imposed on a taxpayer with assets valued above $10 million. However, once in place, this threshold could be lowered in the future to expose additional taxpayers to the additional tax liability.

Small business owners frequently cite tax burdens as one of the biggest problems facing their businesses. With a top marginal individual income tax rate of 9.85%, growing property tax liabilities, and increased payroll taxes due to new mandates, Minnesota’s small businesses are already grappling with some of the highest tax burdens in the country.

Depending on how the business is structured, a small business owner could be subjected to increased tax liabilities based on their personal ownership of property used in the business or their individual ownership stake in the business. In other words, if the value of the business or business assets pushes them over the threshold, a small business would be subject to this new tax – even if those assets are tied up in the business and not liquid.

This bill was heard in the House Taxes Committee and was laid over for further consideration. NFIB provided testimony in opposition to this proposal.

Net Investment Income Tax Expansion

House File 4123 seeks to expand Minnesota’s Net Investment Income Tax to include “all income from a trade or business” that is not subject to taxes on self-employment income.

Currently, Minnesota imposes a Net Investment Income Tax of 1% on net investment income that exceeds $1,000,000. The current definition of “net investment income” includes interest, dividends, royalties, rents, annuities, capital gains, and business income from a “passive activity” in which the taxpayer did not materially participate.

This bill would essentially expand the definition of “net investment income” to include business income from an S corporation in which the taxpayer materially participated, requiring income exceeding $1,000,000 to be taxed at a higher rate.

This bill was heard in the House Taxes Committee and was laid over for further consideration. NFIB provided testimony in opposition to this proposal.

Social Media Platform Tax

Bills have been introduced in both the Senate and the House that would impose a new excise tax on social media companies with users in Minnesota. Social media companies would pay based on the number of users in Minnesota from whom they collect data in a given month.

While this tax is not levied directly upon the users of social media, there are concerns that this new tax will drive up advertising costs for small businesses that use these platforms as part of an affordable, digital marketing strategy. There is also concern that this tax will result in social media platforms limiting features or reducing access to advertising services that they offer in the state – which would result in fewer advertising options for small businesses that utilize these platforms.

This proposal has also been included in the Governor’s 2026 Supplemental Budget Recommendations.