Minnesota House Bill HF950

Minnesota 2025-2026 Regular Session

• Introduced: 2/17/25
• Refer: 2/17/25

Caption

Individual income tax exemption provided for income earned by certain nonresident employees.

Impact

If enacted, the bill would significantly alter the state’s approach to income taxation for nonresidents. Currently, Minnesota imposes income tax on individuals who earn wages within the state, regardless of their residency status. HF950 introduces a limit on the number of days that nonresidents can work in Minnesota without facing tax liabilities, which aligns with similar regulations in other states. This exemption may particularly benefit industries that rely on transient workers, such as entertainment and seasonal agriculture, thus encouraging businesses within these sectors to hire from beyond state borders.

Summary

HF950 is a proposed legislative bill in Minnesota that aims to provide an exemption from income tax for certain nonresident employees. This bill specifies that individuals who meet particular criteria—including being a nonresident of Minnesota and working in the state for 30 days or fewer during the taxable year—will have their compensation excluded from gross income for state tax purposes. The intent behind this provision is to make Minnesota a more attractive place for businesses that employ nonresidents, thereby potentially boosting economic activity in the state.

Contention

However, the bill may also face scrutiny regarding its implications for state revenue. Opponents of the bill could argue that providing exemptions for nonresident employees may decrease tax revenues at a time when such funding is crucial for public services. Additionally, there are concerns about how effectively the criteria for exemption can be enforced—particularly in tracking the number of days nonresidents work within the state. Moreover, the definition of a nonresident and the employment duties that qualify for exemption could spark debate, as stakeholders may differ on what constitutes fair taxation in relation to nonresident workers.