HF3814 (Legislative Session 94 (2025-2026))
Individual income and corporate franchise taxes; federal changes to section 179 expensing conformed.
AI Generated Summary
Purpose
To align Minnesota’s tax rules with federal changes by updating how the Internal Revenue Code is defined for Minnesota tax purposes, with a focus on how Section 179 expensing is treated.
Main Provisions
- Redefines “Internal Revenue Code” in Minnesota law to mean the Internal Revenue Code of 1986 as amended through May 1, 2023.
- Specifically includes section 70306 of Public Law 119-21, which relates to Section 179 expensing.
- Also includes any uncodified (not written into codified statutes) federal provisions that relate to provisions of the Internal Revenue Code that Minnesota law uses.
- These changes are framed within Minnesota Statutes 2024, section 290.01, subdivision 31 (Internal Revenue Code).
Significant Changes to Existing Law
- The definition of the Internal Revenue Code is expanded to incorporate federal changes up to May 1, 2023.
- Adds explicit inclusion of a specific federal provision (section 70306 of Public Law 119-21) related to Section 179 expensing.
- Requires that uncodified federal provisions connected to the IRC, which Minnesota law incorporates, be treated as part of Minnesota law.
Implications
- Minnesota’s treatment of deductions and allowances under Section 179 expensing in both individual income and corporate franchise taxes will align with recent federal changes.
- Tax compliance for Minnesota taxpayers may be simplified by using federal definitions and provisions that match federal rules.
Potential Considerations
- Taxpayers planning purchases of eligible property may experience changes in how Section 179 expensing is calculated for Minnesota taxes.
- Businesses with Minnesota tax obligations should monitor how uncodified federal provisions related to the IRC are implemented in practice.
Relevant Terms
Internal Revenue Code Section 179 expensing May 1, 2023 Public Law 119-21 uncodified federal provisions Minnesota Statutes 2024 section 290.01 subdivision 31 conforming to federal changes individual income tax corporate franchise tax
Bill text versions
- Introduction PDF PDF file
Past committee meetings
- Taxes on: March 11, 2026 10:15
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 02, 2026 | House | Action | Introduction and first reading, referred to | Taxes | |
| March 05, 2026 | House | Action | Author added |
Citations
[
{
"analysis": {
"added": [
"Adds a definitional clause to Subdivision 31 defining 'Internal Revenue Code' as the Internal Revenue Code of 1986 as amended through May 1, 2023 and incorporating Public Law 119-21 §70306 related to section 179 expensing, including uncodified provisions of federal law incorporated into Minnesota law."
],
"removed": [],
"summary": "Defines Internal Revenue Code for Minnesota tax statutes, including amendments through May 1, 2023 and incorporating Public Law 119-21 §70306 relating to section 179 expensing; also includes uncodified federal provisions incorporated into Minnesota law.",
"modified": [
"Revises the definition of 'Internal Revenue Code' to encompass amendments through May 1, 2023 and specific federal provisions (Public Law 119-21 §70306) related to section 179 expensing."
]
},
"citation": "290.01",
"subdivision": "subd.31"
},
{
"analysis": {
"added": [
"Uses the Internal Revenue Code as the reference framework within the definitional provisions."
],
"removed": [],
"summary": "References the Internal Revenue Code (federal law) as the basis for the defined code used in Minnesota statutes, including amendments and cross-references to public law.",
"modified": []
},
"citation": "Internal Revenue Code",
"subdivision": ""
},
{
"analysis": {
"added": [
"Incorporates Public Law 119-21 §70306 (relating to section 179 expensing) into the Minnesota definitional construct for the Internal Revenue Code."
],
"removed": [],
"summary": "Cited section 70306 of Public Law 119-21 in relation to section 179 expensing, incorporated into the Internal Revenue Code definitional framework.",
"modified": []
},
"citation": "Public Law 119-21 §70306",
"subdivision": ""
}
]Progress through the legislative process
In Committee