Conformity with the Federal Tax Bill remains a major goal of the 2018 Session. However, the proposals presented by the Dayton Administration and considered by the House and the Senate appear to present significant differences in how to conform with the federal law and limit negative impacts on Minnesota taxpayers. Chatter in the Halls of the Capitol is now suggesting perhaps it makes sense to delay passage of any major tax reforms until the 2019 Session. Such a decision could create a frustrating situation for Minnesota Taxpayers and would require significant legislative activity at the beginning of the 2019 Session. However, the delay could provide for greater clarity on the impacts of the federal law and allow for a better product in the end. If a decision were made to delay passage of a major overhaul of the tax code, the legislature may still consider passage of a much smaller and less costly tax bill.

Today, the House Property Tax and Local Government Finance Division adopted their Division Report and referred the bill to the full House Tax Committee. The bill includes language permitting the city of St. Cloud to increase its existing food and beverage tax from 1 percent to 1.5 percent upon the approval of St. Cloud voters in a general election. The bill also allows the city to increase its extra two percent lodging tax to three percent upon voter approval. The funding from both tax increases can be used to pay for improvements and bonds for the Municipal Athletic Center. Rep. Loeffler of Minneapolis also offered an amendment to the bill removing the cap on Minneapolis’s lodging tax, that amendment failed and was not adopted.

This week, the Governor appointed Representative Paul Thissen to the Minnesota Supreme Court. Representative Thissen is currently serving in his 8th term as a Representative from Minneapolis, was the Speaker of the House from 2012-2013, served as the DFL Minority Leader and sought the DFL nomination for Governor in 2010 and 2018. Representative Thissen officially resigned from the Legislature on Thursday. The Governor has indicated he will not call for a Special Election to fill the seat, instead the seat will remain vacant until the November General Election.
We will continue to update you on the progress of the 2018 Legislative Session.

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