AI Generated Summary
This bill, Minnesota Senate File No. 1968, proposes modifications to the state's individual income tax rates by lowering the first-tier tax rate. Specifically, it reduces the first-tier rate from 5.35% to 2.8% for all filing categories, including married joint filers, single filers, and heads of households.
Key Changes:
Married Individuals Filing Jointly & Surviving Spouses:
- The tax rate on income up to $47,620 is reduced from 5.35% to 2.8%.
- The remaining tax brackets and rates remain unchanged.
Single Filers:
- The tax rate on income up to $32,570 is reduced from 5.35% to 2.8%.
- Higher income brackets remain unchanged.
Heads of Household:
- The tax rate on income up to $40,100 is reduced from 5.35% to 2.8%.
- Higher income brackets remain unchanged.
The bill accounts for non-resident taxpayers by adjusting their Minnesota income tax proportionally based on state-assigned income.
It also includes provisions for qualifying owners of pass-through entities that elect to pay tax at the entity level.
Purpose of the Bill:
The main goal of this bill is to reduce income tax liability for lower-income earners by applying a significant rate cut to the first tax bracket.
Next Steps:
- The bill has been introduced in the Senate and referred to the Taxes Committee for further consideration.
If passed, this legislation will lower the tax burden on lower-income earners while keeping higher income tax brackets unchanged.
Bill text versions
- Introduction PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 27, 2025 | Senate | Floor | Action | Introduction and first reading | |
| February 27, 2025 | Senate | Floor | Action | Referred to | Taxes |
Citations
[
{
"analysis": {
"added": [
"Introduces lower tax rates for certain income brackets."
],
"removed": [
"Eliminates previous rates applicable to income brackets for married and unmarried individuals."
],
"summary": "This bill modifies the income tax rates for individuals, estates, and trusts under Minnesota Statutes section 290.06, subdivisions 2c and 2d.",
"modified": [
"Extends the tax bracket ranges and adjusts rate percentages."
]
},
"citation": "290.06",
"subdivision": "subdivisions 2c, 2d"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "This section details specific income additions that affect taxable income calculations.",
"modified": [
"Clarified how additions are applied in taxable income calculations."
]
},
"citation": "290.0131",
"subdivision": "subdivisions 2, 6, 8-10, 16, 17, 19, 20"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "This section specifies subtractions applicable to government interest and other income deductions.",
"modified": [
"Clarified how subtractions are subtracted in taxable income calculations."
]
},
"citation": "290.0132",
"subdivision": "subdivisions 2, 9, 10, 14, 15, 17, 18, 27, 31, 32"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "This specifies additional provisions for income deduction adjustments.",
"modified": [
"Adjusted provisions for handling subtractions and additions in income reporting."
]
},
"citation": "290.0137",
"subdivision": "paragraph a, paragraph c"
},
{
"analysis": {
"added": [
"New procedural requirements for tax payment elections for qualifying entities."
],
"removed": [],
"summary": "This section provides election options for qualifying entities to pay tax on behalf of its owners.",
"modified": [
"Adjustments ensure alignment with federal income definitions."
]
},
"citation": "289A.08",
"subdivision": "subdivision 7a"
}
]