'Tax conformity' benefits taxpayers – Star Tribune

Opinion editor’s note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.
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If you blinked, you might have missed it: The first bill of the 2023 legislative session, recently signed into law by Gov. Tim Walz, carries $100 million of tax relief.
You could be forgiven for not noticing because the bill deals with something called “tax conformity.” Simply put, the bill aligns Minnesota’s tax code with federal tax rules for the first time in years. States depart from the federal code for various reasons, a move that can be necessary for government but typically makes tax filing more complicated. Conformity simplifies those filings, and in this instance, happily, it also should result in tax savings for many Minnesotans.
The bill sailed through the DFL House and DFL Senate on unanimous votes, with action coming early enough that Minnesotans can reap the benefits on their upcoming tax filings.
The bill is another excellent example of what can be accomplished when two sides work together instead of at cross-purposes. Rep. Pat Garofalo, R-Farmington, praised the bipartisan work that went into the bill and told an editorial writer, “I hope this is a sign of things to come.”
The agreement came about, he said, “because for once everybody acted like adults.” Garofalo said there actually “are lots of things at the Capitol that everybody agrees on. There are literally hundreds of bills we could do this on.” The problem, he said, comes when “these things we agree on, that have to happen, become bargaining chips. People hold on to them to gain some advantage.”
Complicating matters, he said, is vastly increased polarization. “We’re a more polarized society than we used to be,” he said. “The Democrats are far more left, and the Republicans are far more right. It’s harder to meet in the middle, and there are growing numbers who just don’t want to compromise at all.”
He’s right; sometimes the most commonsense solutions become the most elusive because their value increases. Some of it may be a function of divided government. An attempt to pass tax conformity in 2022 failed because a DFL House and GOP Senate remained at loggerheads as each side sought advantage.
Nevertheless, unanimity was achieved on this bill and could still set the template for others.
House Tax Chair Aisha Gomez, DFL-Minneapolis, told the St. Paul Pioneer Press, “I hope to continue this momentum as we work to create a fair and equitable tax system which allows us to build a Minnesota which works for everyone.”
The conformity bill would align state and federal tax rules on such pandemic relief as the CARES Act, the American Rescue Plan, the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, along with other federal programs. It will mean breaks for restaurants, student loan borrowers and other taxpayers.
It also deals with non-pandemic issues and, in some instances, goes back to 2017. Senate Tax Chair Ann Rest, DFL-New Hope, said that business and labor leaders alike supported “this commonsense update of Minnesota’s tax laws.” The changes, she said “have made filing taxes simpler and have allowed thousands of individuals and businesses across the state to take advantage of tax cuts this year.” More details can be found on the Minnesota Department of Revenue website.
State Revenue Commissioner Paul Marquart noted astutely that sometimes speed matters. So it was in this instance, when early passage ensured that Minnesotans could see the benefits as soon as this tax season. Marquart is a veteran of many a tax battle at the Capitol, having served 18 years as a representative on the House Tax Committee, including four years as its chair. The conformity bill, he said in a Minnesota Public Radio report, will “get overdue tax cuts to individuals and families and businesses, and hopefully also make the filing for 2022 simpler and less costly for taxpayers.”
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