House passes tax conformity bill

Published 10:28 am Friday, January 16, 2015

By Doug Belden

St. Paul Pioneer Press

ST. PAUL — The Minnesota House passed its first bill of the 2015 session Thursday, a measure that would align state tax law with recent federal changes, providing an estimated $20 million in tax relief.

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“Tax conformity” is a regular exercise at the Legislature to update state laws with new federal legislation that, in this case, passed about a month ago.

Senate Majority Leader Tom Bakk, DFL-Cook, said the Senate would likely take up the bill Jan. 22. Democratic-Farmer-Labor Gov. Mark Dayton has said he will sign it into law.

The debate in the House, which flipped from DFL to Republican control this session, was brief and nonpartisan. The vote, after about 15 minutes of discussion, was unanimous, 129-0.

The changes are forecast to cost the state $20 million this year but produce a similar amount in revenue for 2016.

Those numbers are small compared with what’s expected to be a $41 billion two-year state budget, but the tax-conformity bill is a priority of the Dayton administration and lawmakers in part because it saves taxpayers money and hassle.

The initial goal had been to have the bill passed by Jan. 20, the opening day of tax filing season.

State Sen. Rod Skoe, the Clearbrook DFLer who chairs the Taxes Committee in the Senate, has said he doesn’t anticipate that a small delay will be too disruptive.

Among the tax-relief provisions included in the bill are $4.6 million in mortgage insurance premium deductions, $2.1 million in higher education tuition deductions and $1.2 million in teacher expense deductions. The changes apply to the 2014 tax year.

In addition, the bill includes clarifying language related to how state aid is calculated for the Mayo Clinic’s Destination Medical Center project in Rochester.

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