HF3115 would phase out Minnesota’s individual income tax and corporate franchise tax over a four-year period. Beginning with taxable years after December 31, 2025, the bill reduces liability to 80 percent of current law, then to 60 percent for 2026, 40 percent for 2027, and 20 percent for 2028. It also reduces refundable credits tied to those taxes on the same schedule, so taxpayers with credits would see their refunds scaled down as the tax is phased out.
The bill further directs the revisor of statutes, working with the Department of Revenue and legislative staff, to identify any additional statutory changes needed to fully repeal the taxes imposed under chapter 290 and to submit recommended cleanup legislation by January 1, 2026. A broad repealer section would eliminate many provisions in Minnesota’s income and corporate franchise tax statutes effective for taxable years beginning after December 31, 2029, including filing, withholding, estimated tax, liability, assessment, refund, and credit provisions that are tied to those taxes. In practical terms, the bill would substantially dismantle the state income tax system and the corporate franchise tax framework.
The bill’s impact on state law would be sweeping. It would remove or render obsolete large portions of chapters 289A and 290, including rules governing returns, withholding, estimated payments, credits, penalties, and tax administration for individuals, corporations, partnerships, trusts, estates, and related entities. It would also affect taxpayers who currently rely on refundable credits, composite returns, pass-through entity tax rules, and other income-tax-related provisions, because those mechanisms are built around the taxes the bill seeks to phase out.
There is no recorded committee testimony or vote history in the provided materials, so the overall sentiment cannot be measured from debate or roll calls. Based on the bill text alone, the proposal is clearly pro-tax-cut and designed to eliminate major state income and corporate taxes. The absence of discussion or votes means there is no documented support or opposition in the supplied record, but the scale of the repeal suggests the bill would likely be highly consequential and politically contentious.
The main point of contention would likely be the fiscal and policy consequences of eliminating the state’s largest broad-based taxes. Supporters would likely emphasize tax relief, simplicity, and economic competitiveness, while opponents would likely focus on the loss of revenue for schools, health care, local aid, and other general fund programs, as well as the need to replace the revenue or cut spending. The bill also raises implementation concerns because it requires extensive statutory cleanup and would unwind many existing tax credits and administrative rules over time.
The bill would phase down and ultimately repeal Minnesota’s individual income tax and corporate franchise tax, requiring major conforming changes across chapters 289A and 290. It would also reduce refundable credits tied to those taxes during the phaseout period and repeal numerous filing, withholding, estimated tax, assessment, refund, and liability provisions effective for taxable years beginning after December 31, 2029. The revisor instruction signals that additional cleanup legislation would be needed to fully remove obsolete tax provisions.
No committee transcripts or votes were provided, so there is no documented legislative debate or recorded support/opposition to summarize. From the text alone, the bill reflects a strong anti-income-tax, anti-corporate-franchise-tax position and would be viewed as a major tax-cut and tax-reform proposal. Because it would eliminate a large share of state tax revenue, it would likely draw both strong support from tax-cut advocates and strong resistance from those concerned about budget impacts.
The central contention is fiscal: phasing out the individual income tax and corporate franchise tax would significantly reduce state revenue, which could affect funding for public services and require offsetting spending cuts or replacement taxes. Another likely point of dispute is the breadth of the repeal, since the bill would unwind many existing tax administration rules and credits, creating implementation complexity for taxpayers and the Department of Revenue. Supporters would likely argue for tax relief and simplification, while opponents would likely argue that the state cannot absorb the revenue loss without major program reductions.