Gov. Dayton Signs First Omnibus Tax Bill

The bill includes a number of federal income tax conformity items and business tax reductions.
(Published Mar 24, 2014)

The full Senate on March 21 considered an amended version of HF 1777, the first House omnibus tax bill, which includes a number of federal income tax conformity provisions, modifications to the gift and inheritance taxes, the repeal of several of last year’s newly enacted business sales taxes, and an expansion of the state’s budget reserve. Gov. Dayton signed the bill later the same day.

The Senate delete-all amendment to HF 1777 was initially adopted on March 20 by the Senate Taxes Committee and includes many of the House provisions as well as several tax initiatives from Gov. Dayton’s supplemental budget and a sprinkling of local bills, including tax increment requests from the cities of Detroit Lakes and St. Paul.

Gov. Dayton and Department of Revenue Commissioner Myron Frans have been pushing the Legislature to quickly take action on the legislation in part because parts of the bill impact individual income tax filings for tax year 2013, and the deadline for income tax filing is less than one month away.

The Senate version of the bill was initially brought up on the Senate floor on March 20, just hours after the Senate Taxes Committee completed its work on the bill. However, without the approval of two-thirds of the members of the Senate to suspend the Senate rule requiring a bill to be reported to the floor on three separate days, the bill had to be rescheduled for a previously unscheduled Friday floor session.

On March 21, the bill was brought up on the Senate floor and after roughly a dozen amendments were offered, the bill was approved on a 58 to 5 vote and sent back to the House, where the Senate-amended version was approved, thereby avoiding a conference committee.

The House is scheduled to release its second omnibus tax bill on March 24. The bill will likely contain a wider array of other tax proposals, including clarifications to last year’s sales tax exemption for cities and counties, other city-specific tax increment financing and local tax requests as well as other income tax, sales tax, and property tax initiatives. The League will provide more information as soon as it is available.

The Senate Taxes Committee has not yet announced when it may process a second tax bill, but with hearings scheduled for next week on a variety of tax bills, we could see a Senate omnibus bill in the near future.

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