Republican and Democrat lawmakers have reached a deal on state taxes as the end of session approaches.
Lawmakers announced they had come to an agreement on a bill Saturday. Among the measures included is the cutting of the 5.35% income tax bracket to 5.1%, property tax relief, increased child and dependent tax credits, and the elimination of state taxes on Social Security income.
The deadline for the legislative session is Monday at midnight.
“It’s going to positively impact in a real and meaningful way, families, senior citizens and businesses across the state,” said Rep. Paul Marquart, chair of the House taxes committee, in a press conference.
Priorities for both parties this session include tax cuts as the state faces a record $9.2 billion surplus.
Lawmakers had agreed to a broad framework of tax cuts and spending priorities earlier this week – including education, public safety, healthcare and human services. However, they still need to come to agreements on several spending bills before the end of the session Sunday.
The tax bill will reduce total taxes by $1.4 billion in the current biennium and $2.4 billion in the next one, according to Session Daily.
Marquart estimates the bill includes a total of more than $600 million in property tax cuts for renters and homeowners. And by converting a renter tax cut to an income tax cut, more than 125,000 new filers will be eligible, according to the Star Tribune.
The bill would eliminate Social Security tax for seniors. Sen. Carla Nelson, chair of the Senate tax committee, said the measure would impact 460,000 seniors.
The bill also raises the income threshold for K-12 education tax credits.
One measure left out of the bill was the $500 and $1,000 one-time rebate checks promoted by Gov. Tim Walz. While Marquart said Democrats support the checks, Nelson said Republicans wanted to prioritize other ways to give money back to taxpayers.
Republicans had criticized the one-off payments as election year gimmicks.