Minnesota lawmakers are considering a new tax law. The tax char of the Minnesota Senate proposed the law. The law, titled SF 4010, would result in a decrease in the individual income tax and corporate franchise tax by one-tenth of one percent in the event revenues exceed expenditures.
Is this a novel concept? The reduction of the income tax with a budget surplus is not an innovative idea. As noted in a recent piece by Minnesota Public Radio News, 11 states have a similar system in place.
What are the pros and cons of this type of tax structure? Businesses throughout the state have voiced support of this proposal.
However, a tax policy manager with the Minnesota Department of Revenue has warned that this type of system comes with risk. A reduction in the tax rate means less money is put into the state’s coffers. He states that any additional money serves as a type of safety net in the event there is a future deficit.
Will the Senate’s proposal become law? The proposal is in its early stages. Lawmakers introduced the bill on April 19, 2018. The Taxes Committee is currently considering the bill.
What should taxpayers in Minnesota learn from this proposal? It is important for individuals and businesses to note that tax law is always changing. This is true at both the state and federal levels.
As such, anyone that finds themselves dealing with a tax controversy is wise to stay apprised of the latest changes in tax law. A Minnesota tax law attorney can help.