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(KNSI) — The Minnesota Senate Wednesday night passed their version of an omnibus tax bill, which they tout as including some of the biggest tax cuts in Minnesota history.

According to a press release, it includes $1 billion in tax rebates, a $1.24 billion cut in Social Security taxes, and more than $2 billion to fund a child tax credit and relief for childcare costs.

Sen. Aric Putnam (DFL-St. Cloud) sits on the Senate Tax Committee and says they looked at creating “a reasonable approach to taxes, one that respects our public needs and our personal pocketbooks.”

“It also provides resources to local governments to improve public safety and fill potholes,” said Putnam. “We’re helping seniors a lot too, lowering the property tax folks pay, reducing taxes on pensions for firefighters and state troopers, and cutting the tax on Social Security benefits so that 76% of Minnesotans won’t pay a penny of tax on their benefits. I’m still going to fight for more relief for seniors, but this is a good start.”

Lawmakers on both sides of the aisle say they want to completely eliminate the tax on Social Security, but top Democrats like Governor Tim Walz and House Speaker Melissa Hortman won’t support it, saying it allows the wealthiest Minnesotans to avoid paying taxes.

The measure passed along party lines 34-33, with Republicans saying it includes tax increases on businesses through worldwide or global reporting. Much of the discussion in the committee centered around the worldwide combined reporting language. An amendment to strip that out was not adopted, and Republicans say keeping it in the bill is risky.

Worldwide or global reporting means any businesses in Minnesota will be forced to report all income, even from outside Minnesota. They claim it will affect businesses based inside and outside of the state and will likely force them to reconsider how much they are willing to invest in doing business here.

“There is no reality in which a historic $17.5 billion surplus should lead to $1.2 billion in tax increases, yet Democrats found a way to do just that with this tax bill,” said Senator Jeff Howe (R-Rockville). “This bill completely misses the mark. Republicans have spent countless hours offering amendments and ideas that would have offered tax relief and made this bill better, but Democrats had little interest in what we put forward. It’s incredibly disappointing that the full repeal of social security was also left out of this bill.”

Other amendments offered included creating an automatic refund program so taxpayers can benefit from future government surpluses, requiring a supermajority vote to raise income taxes and eliminating the child care tax credit expiration.

The Senate and House will enter conference committee negotiations to reconcile the differences between their bills and craft a final tax bill to send to Governor Walz.

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