The Tax Expenditure Review Commission met for the first time this week to begin an important but monumental task of reviewing Minnesota’s tax spending laws. The TERC was created with bipartisan support in 2021, charged with a mission to review Minnesota’s 318 tax credits, subtractions, and similar tax preferences on a rotating basis. State spending priorities passed by the legislature are reviewed every two-year budget cycle, but most tax spending is never revisited once passed into law.
This commission will ensure all tax spending priorities are reviewed at least once every 10 years to determine whether they are meeting intended purposes and fitting within estimated budget expectations. The Commission must hold public hearings to discuss a group of tax expenditures each year. By December 15, the group must release a report to the legislature that outlines the purpose of each reviewed expenditure, the cost, who is impacted, and potential improvements that could improve the effectiveness of each tax benefit.
More information on the TERC can be found here: https://www.lbo.mn.gov/TERC/. Upcoming meetings will be posted on this website. More information on Minnesota’s existing tax expenditures can be found in the Minnesota Department of Revenue’s Tax Expenditure Report: https://www.revenue.state.mn.us/tax-expenditure-reports.