Minnesota Legislature’s first bill of 2023 passes unanimously — and is long overdue

Christopher Magan, Pioneer Press
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

The first bill approved by the Minnesota Legislature in 2023 was unanimous and long overdue — conforming state taxes with five years worth of federal changes.

The bill passed the Senate Wednesday with a 67-0 vote after passing the House on a 134-0 vote Monday. Gov. Tim Walz is expected to sign it this week.

“Minnesota business and labor leaders alike are behind this common-sense update of Minnesota’s tax laws,” said Sen. Ann Rest, DFL-New Hope, who recently became tax committee chair. “(W)e have made filing taxes simpler and have allowed thousands of individuals and businesses across the state to take advantage of tax cuts this year.”

Rep. Aisha Gomez, DFL-Minneapolis, the chair of the tax committee, had similar praise Monday when the bill passed the House.

“I hope to continue this momentum as we work to create a fair and equitable tax system which allows us to build a Minnesota which works for everyone,” Gomez said.

What is tax conformity?

Tax conformity, while important, is as exciting as it sounds. Essentially, it makes minor changes throughout the state code to allow Minnesotans to benefit from changes in federal tax law.

Despite typically being uncontroversial, the Legislature hasn’t passed a conformity bill in five years. Under previously divided government, nearly everything became a bargaining chip.

Why is it important?

The bill includes 46 changes in state law to conform with the federally updated tax code and will save 500,000 residents and businesses a total of about $100 million in taxes.

The most consequential pieces of the conformity bill eliminate state taxes on federal coronavirus aid to restaurants and entertainment venues.

It also includes changes so President Biden’s controversial student loan forgiveness program, should it survive court challenges, doesn’t count as taxable income.

What comes next?

Walz is expected to sign it quickly — likely as soon as Thursday — because state officials need to move fast so tax forms and tax filing software can be updated. Minnesotans will have until the end of December to file updated returns for previous years if they missed out on a tax break because of the Legislature’s tardiness.

“By getting this bill done today, we are showing Minnesotans we came here to work,” Senate Majority Leader Kari Dziedzic, DFL-Minneapolis, said on the Senate floor Wednesday.

It’s important to remember this is just the first tax bill the Legislature will consider this year — much more tax debate is expected. Democrats and Republicans agree they want to use some of the state’s $17.6 billion budget surplus to reduce taxes, but they disagree on how.

Republicans, in the minority in the House and Senate, tried to tack some of their biggest tax priorities — eliminating social security taxes and cutting the first income tax tier — onto the conformity bill, but had those amendments rebuffed.

Nevertheless, GOP leaders renewed their calls for Democrats to build bipartisan support for their priorities.

“I’m glad we could kick off the legislative session getting this done for Minnesotans,” said Lisa Demuth, R-Cold Spring, House minority leader.

Related Articles