Tax filing season may be over now, but the Legislature is just beginning to discuss federal tax conformity – the process by which state lawmakers could decide to align our state tax code with the sweeping federal tax reforms signed into law late last year. All 50 states are wrestling with how to align their tax codes closer to the federal government’s new standards, but each state’s approach will differ.

The status of tax conformity today

The Senate reviewed Governor Dayton’s tax proposal Thursday at a public hearing, but it has yet to release its own tax conformity plan.

If state lawmakers decide to fully conform our state tax code to the new federal changes, taxes will increase for nearly 1 million Minnesotans by an average of $489 next Spring. If state lawmakers do not conform, taxes will increase for more than 300,000 Minnesotans by an average of $200. In addition, filling tax returns would become extremely complicated and confusing for most people. That’s because of big changes to deductions and a variety of other reforms that create some incompatibilities between the state and federal tax codes.

What happens next

It is my hope that public hearings will take place soon to allow state lawmakers, taxpayers, tax professionals, and many other stakeholders to have a thoughtful discussion about the best path forward.

With just four weeks left before the Legislature must adjourn, there is no time to waste. Lawmakers of both parties have a responsibility to give taxpayers and tax preparers ample time to prepare for the 2019 filing season. I am rooting for an outcome in which middle-class Minnesotans are treated fairly and do not see their state taxes increase.

How to follow the discussion

The Senate Taxes Committee meets weekly and publishes minutes and audio online at www.senate.mn/committees – giving you the ability to follow the discussion from the comfort of your own home. While I am not a member of the Taxes Committee, I can tell you that it is made up of smart, capable people who fully understand the huge responsibility before them.

If you have questions about federal tax conformity, please call my office at 651-296-9248, email me at sen.dan.sparks@senate.mn, or mail a letter to 95 University Avenue W., Minnesota Senate Bldg., Room 2201, St. Paul, MN 55155.