Senator Dan Sparks: Discussion begins on federal tax conformity
It’s that time of year again when tax filing season is wrapping up. If you have not already done so, your 2017 state income tax return should be postmarked, brought to, or electronically filed with the Department of Revenue by Tuesday. Last year, more than 2 million Minnesotans used electronic software to file their taxes.
The Department of Revenue’s website, www.revenue.state.mn.us, is a helpful resource where taxpayers can get instructions, forms, resources for filing taxes and the ability to track the status of tax refunds. To reach the department by phone, call 651-296-3781 or 800-652-9094.
Tax filing season may be winding down, but the Legislature is just beginning to discuss federal tax conformity -— the process by which state lawmakers could decide to align our state tax code with the sweeping federal tax reforms signed into law late last year. All 50 states are wrestling with how to align their tax codes closer to the federal government’s new standards, but each state’s approach will differ.
The status of tax conformity today
To date, the Senate has not held a public hearing about tax conformity. If state lawmakers decide to fully conform our state tax code to the new federal changes, taxes will increase for nearly 1 million Minnesotans by an average of $489 next spring. If state lawmakers do not conform, taxes will increase for more than 300,000 Minnesotans by an average of $200. In addition, filling tax returns would become extremely complicated and confusing for most people. That’s because of big changes to deductions and a variety of other reforms that create some incompatibilities between the state and federal tax codes.
What happens next
It is my hope that public hearings will take place soon to allow state lawmakers, taxpayers, tax professionals and many other stakeholders to have a thoughtful discussion about the best path forward. With just five weeks left before the Legislature must adjourn, there is no time to waste. Lawmakers of both parties have a responsibility to give taxpayers and tax preparers ample time to prepare for the 2019 filing season. I am rooting for an outcome in which middle-class Minnesotans are treated fairly and do not see their state taxes increase.
How to follow the discussion
The Senate Taxes Committee meets weekly and publishes minutes and audio online at www.senate.mn/committees — giving you the ability to follow the discussion from the comfort of your own home. While I am not a member of the Taxes Committee, I can tell you that it is made up of smart, capable people who fully understand the huge responsibility before them.
If you have questions about federal tax conformity, please call my office at 651-296-9248, email me at firstname.lastname@example.org, or mail a letter to 95 University Ave. W., Minnesota Senate Building, Room 2201, St. Paul, MN 55155.
This column was first published in the Albert Lea Tribune.