Rethinking the Tax on Energy Producers

Minnesota has spent the last several decades developing policies for energy production taxes. In 2014, the legislature directed the Minnesota Department of Revenue to create a report outlining the taxation of electric energy producing systems and analyzing the compensation offered to communities hosting energy production facilities. The DOR conducted thorough research, sought information from industry and local officials, and engaged a work group to assist in this process.

After hearing the DOR overview, the Senate Tax Committee heard a bill to further develop and refine the way energy production taxes are calculated and assessed. The proposal would eliminate some existing policies, including the current wind and solar production taxes, and establish a new “electric generation tax base” determined by the amount of energy produced and the local market value. This is a substantial change that will engage stakeholders during the remaining months of session. (S.F. 1636)

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