ST PAUL, Minn. — Wednesday night, the Minnesota Legislature's Tax Bill Conference Committee wrapped up negotiations on a $3 billion tax package.
Included in the package is a deal on one-time rebate checks, a point Governor Tim Walz listed among his priorities before the end of the session, which accounts for $1.15 billion in tax cuts, aids and credits.
For single filers making up to $75,000, rebate checks would be $260, and for couples making up to $150,000, checks would number $520. Taxpayers could receive an additional $260 check for up to three children.
The package also includes a child tax credit of $1,750 per dependent, which begins to phase out at an income of $35,000, and a new renter's income credit. Those making up to $100,000 won't pay Social Security taxes, and the number of Minnesotans paying some state tax on SS benefits would be cut in half, according to lawmakers.
The bill comes with about $1 billion in tax increases for the next two-year budget, which takes effect July 1, according to the Associated Press. They include a tax aimed at companies with international earnings, plus changes aimed at some higher-income earners. And it will authorize some communities to raise local sales taxes.
“I think it’s unusual for a bill to be put together like this that reflects the priorities of all three groups that are involved in this. The focus for the House was property tax relief," bill sponsor Sen. Ann Rest (DFL-New Hope) said. "That’s going to be something for which many Minnesotans are grateful. From the governor, I think that the child tax credit is going to be a historic item. For the Senate, the Social Security subtractions.”
The tax bill conference committee was expected to give its final approval to its package Thursday and send it to the House and Senate floors for final approval. With a Monday adjournment deadline, the tax bill is one of the most important remaining pieces of a budget that's expected to come in at around $65 million, which would be a big jump from the current $55 billion budget that runs through June.
It must pass in the House and Senate before heading to Gov. Walz's desk.
The plan also includes $300 million for public safety assistance for communities and $160 million more in state aid for cities and counties.
The tax bill does not contain a House-backed fifth income tax bracket on incomes over $1 million, a hike that was dropped during the negotiations.
Rebate checks were included in the DFL-led Minnesota House plan put forth last month. The proposal called for $275 rebate checks to individuals, $550 checks to married couples, and an additional $275 for up to three dependents.
Thursday morning, Senate Republicans said they were disappointed that the final version of the tax bill left out couples that make more than $150,000 and single filers making more than $75,000.
Earlier this year, House and Senate Republicans proposed larger rebate checks in their "Give it Back" plan, which they said would provide $13 billion in tax relief for state residents over two years. The plan included $5 billion in rebate checks, with the money coming from the $17.5 billion state surplus. Single filers would expect $1,250, while joint filers would collect $2,500. There was also a one-time child tax credit of $1,800 for every child under the age of 18.
This is a developing story. KARE 11 will provide more details as new information becomes available.
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