Tax collections are projected to increase by about $850 million in the current budget cycle and by $1.5 billion in the next two-year biennium, according to the Minnesota Department of Revenue, if state tax policy isn’t changed to match up with the federal tax changes made late last year.
DFL Representative Jack Considine says it’s a top level priority and, “I’m positive we will see a tax bill because we have to.(I’m) a big proponent of Governor Dayton’s tax plan; two million Minnesotans getting their taxes cut, the $100 million for small businesses and farmers for being able to deduct equipment purchases up to $1 million I think are both real positive for the state.”
The federal government removed or limited some deductions and exemptions, which raised revenue, and also reduced rates, increased the standard deduction, and made other changes that reduced revenue. Minnesota’s tax structure is set up to conform on the deductions and exemptions side, not the rates or credits.