Minnesota enacts omnibus tax bill, addresses federal reform conformity

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June 2019

Overview

Minnesota has enacted an omnibus tax bill, addressing federal conformity for both individuals and corporations, among other changes. [H.F. 5, enacted 5/30/19] The adopted federal changes generally take effect for Minnesota purposes at the same time as the federal changes take effect. However, for 2018, a special adjustment is provided for individual filers so that individuals should not see an increase or decrease in tax, although some exceptions apply. 

The takeaway

These are major changes for Minnesota, notably in the policy choice not to tax income included under the federal tax reform legislation related to I.R.C. Sec. 965 and GILTI.  For these and other provisions, taxpayers should monitor how the Minnesota Department of Revenue will approach their retroactive application. For sales and use taxes, Minnesota, like many states, used the 2019 legislative session to examine its existing economic nexus standards and to adjust them based on the thresholds examined in South Dakota v. Wayfair.

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Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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