“This tax bill provides significant tax cuts for hard working Minnesotans who struggle to raise a family, pick up their prescriptions, pay off student loans, make the property tax payment, or afford the basic necessities that allow them to thrive,” said Tax Committee Chair Paul Marquart (DFL – Dilworth). “This bipartisan compromise creates a fairer tax system that invests in families, seniors, farmers, and small businesses.”
The tax bill cuts income tax rates for the first time in two decades and doubles the standard deduction to $24,400. These provisions will cut taxes for lower- and middle-income earners while greatly simplifying the tax filing process. About 93% of Minnesota taxpayers will now take the standard deduction that will result in a 7% tax cut for the median family income.
The bill will increase Local Government Aid to cities and counties, allowing local governments to lower property taxes while investing in local infrastructure projects, public safety, and maintenance for roads and parks that keep communities vibrant and safe.
Farmers and businesses will see significant property tax cuts through an increase in the agricultural school bond credit and reductions in the statewide business property tax.
The provider tax provides funding for over a million Minnesotans who can’t afford health care on the individual market. With a continued 1.8 percent provider tax, the bill will ensure that no one will be kicked off their health insurance as a result of its now-removed sunset.
The bill also expands tax credits for low-income people who work, especially those who are raising children, through a Working Family Tax Credit.
Small businesses will get a boost from the Angel Investor Tax Credit – a program that encourages investments in small businesses in Minnesota – which will provide a tax credit to investors who invest in small businesses and startups.
The bill language is available here.
A detailed summary is available here.