Vetoed by Governor Mark Dayton

Vote Smart's Synopsis:

Vote to adopt a conference report that amends Minnesota's tax law to conform with certain federal tax changes, while establishing state-specific deductions, exemptions and credits.

Highlights:

• Amends the starting point for calculating individual income taxes from the federal taxable income (FTI) to the federal adjusted gross income (FAGI) so that itemized and standard deductions, as well as personal and dependent exemptions, can be determined by the state rather than federal law (Article 1, Section 9).

• Reduces the percentage rates for individual income tax brackets beginning in tax year 2018 (Article 1, Section 40).

• Resets the phase-out thresholds under the 529 Plan credit at the tax year 2018 amounts and converts indexing to the C-CPI-U index (Article 1, Section 52).

• Authorizes an individual to claim either the state standard deduction or state itemized deductions (Article 1, Sec. 54).

• Limits the addition for state and local income taxes and sales taxes to estates and trusts, since only those entities will continue to use FTI in calculating Minnesota tax (Article 1, Sec. 16).  

• Specifies that in the case of a married couple filing separate returns, both spouses must itemize their deductions if one spouse itemizes (Article 1, Sec. 54).

• Resets the individual alternative minimum tax (AMT) exemption at the tax year 2018 dollar amounts and converts indexing to the C-CPI-U index (Article 1, Sec. 56).

• Repeals the corporate AMT, with the exception of carryover credit (Article 1, Sec. 80).

• Establishes a corporate and individual income tax deduction for certain business expenses of medical cannabis companies (Article 2, Secs. 5 & 6).

• Amends the tax credit that allows individuals to claim a stillborn child as a dependent by allowing individuals who move into or out of the state during a tax year to be eligible for such (Article 2, Sec. 9).

• Authorizes a number of sales tax exemptions for various construction projects, including public safety facilities, water treatment plants, and medical facilities in underserved areas (Article 3, Secs. 5, 12 & 24).

• Prohibits the Department of Revenue from issuing a permit to a business or individual with an unpaid sales tax liability (Article 8, Sec. 2).

• Authorizes certain data about a sales tax permit holder to be disclosed to anyone if the permit is revoked or cancelled, including the basis for cancellation (Article 8, Sec. 1).

Full Bill Text

Vote Smart's Synopsis:

Vote to adopt a conference report that amends Minnesota's tax law to conform with certain federal tax changes, while establishing state-specific deductions, exemptions and credits.

Highlights:

• Amends the starting point for calculating individual income taxes from the federal taxable income (FTI) to the federal adjusted gross income (FAGI) so that itemized and standard deductions, as well as personal and dependent exemptions, can be determined by the state rather than federal law (Article 1, Section 9).

• Reduces the percentage rates for individual income tax brackets beginning in tax year 2018 (Article 1, Section 40).

• Resets the phase-out thresholds under the 529 Plan credit at the tax year 2018 amounts and converts indexing to the C-CPI-U index (Article 1, Section 52).

• Authorizes an individual to claim either the state standard deduction or state itemized deductions (Article 1, Sec. 54).

• Limits the addition for state and local income taxes and sales taxes to estates and trusts, since only those entities will continue to use FTI in calculating Minnesota tax (Article 1, Sec. 16).  

• Specifies that in the case of a married couple filing separate returns, both spouses must itemize their deductions if one spouse itemizes (Article 1, Sec. 54).

• Resets the individual alternative minimum tax (AMT) exemption at the tax year 2018 dollar amounts and converts indexing to the C-CPI-U index (Article 1, Sec. 56).

• Repeals the corporate AMT, with the exception of carryover credit (Article 1, Sec. 80).

• Establishes a corporate and individual income tax deduction for certain business expenses of medical cannabis companies (Article 2, Secs. 5 & 6).

• Amends the tax credit that allows individuals to claim a stillborn child as a dependent by allowing individuals who move into or out of the state during a tax year to be eligible for such (Article 2, Sec. 9).

• Authorizes a number of sales tax exemptions for various construction projects, including public safety facilities, water treatment plants, and medical facilities in underserved areas (Article 3, Secs. 5, 12 & 24).

• Prohibits the Department of Revenue from issuing a permit to a business or individual with an unpaid sales tax liability (Article 8, Sec. 2).

• Authorizes certain data about a sales tax permit holder to be disclosed to anyone if the permit is revoked or cancelled, including the basis for cancellation (Article 8, Sec. 1).

Full Bill Text