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Tax conformity changes now law (new law)

Published (3/25/2011)
By Lee Ann Schutz
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Minnesota taxpayers may now benefit on their 2010 state return from action taken by the governor to conform the state to recent federal tax code changes.

Sponsored by Rep. Greg Davids (R-Preston) and Sen. Julianne Ortman (R-Chanhassen), the new law, signed March 21, adopts most federal tax changes made for the 2010 tax year.

Most notably, it conforms the state to the recently enacted federal Patient Protection and Affordable Care Act that allows the cost of health insurance coverage of dependents and adult children to age 26 to be excluded from federal taxable income. This provision is effective March 22, 2010.

Employers who have distributed 2010 W-2 statements that reported the amount of health coverage provided to adult children under age 27 are not required to distribute a corrected tax year form.

The law also repeals a provision enacted in the 2010 special session that directed the commissioner of revenue to delay paying corporate franchise tax and sales tax refunds until fiscal year 2012. The positive General Fund balance now projected for fiscal year 2011 makes the delay of refunds unnecessary. This provision is also effective March 22, 2010.

In a release announcing the new law, Gov. Mark Dayton wrote: “This bill gives $13 million in tax cuts to Minnesota college students and their parents, teachers, businesses and other taxpayers. I am also pleased the Legislature included my recommendation to resume our refunds to businesses for the sales tax exemption on their capital purchases. Those refunds will give Minnesota businesses money they can use to put more Minnesotans to work.”

HF79*/ SF47/CH8

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