A front-row seat to tax conformity bill signing
January 16, 2023 | Geno Fragnito
Federal conformity is an issue on the MNCPA legislative agenda every year and every year we advocate for an early conformity bill to reduce filing complexity and cost. Most years, the Legislature waits until after the filing deadline and passes a retroactive conformity bill.
Not this year.
Last week, Gov. Tim Walz signed a federal conformity bill after it moved through both the
Minnesota House (132-0 vote) and
Minnesota Senate (67-0) this week. This hit a suggested deadline by Paul Marquart, the new Minnesota Department of Revenue commissioner, in order for the DOR to execute the necessary updates before the filing season opens
Jan. 23.
Often, it may feel like nothing ever gets done in Saint Paul. The legislative process can be frustrating but it’s important to be persistent, continue the conversations and help legislators understand the importance of reducing tax code complexity. Sometimes, an issue can be resolved in one legislative session. More likely, it takes multiple years with incremental progress to resolve others. This makes it important for CPAs to continue to be engaged and shape the eventual outcome, like we saw already early in this legislative session.
In my 17 years as your director of government relations, this is the first time the MNCPA has been involved in a ceremonial signing, and it was exciting to experience. I was doubly pleased to be joined by two longtime advocates and champions for the MNCPA and accounting profession, members Todd Koch and Carolee Lindsey, who both went home with duplicate versions of the newly minted tax law — signed by Gov. Walz, no less.
Todd and Carolee have spent many years and countless hours at the Capitol advocating for sound tax policy and reduced complexity. This benefits not only their clients, but all the businesses CPAs work with and the thousands of clients CPAs they represent. Carolee and Todd’s efforts, along with the efforts of many of your MNCPA peers, have had a direct impact on the legislative process and legislators’ understanding of how important tax conformity is.
As for the bill,
it largely conforms state taxes to seven federal acts:
- The Further Consolidated Appropriations Act
- The Families First Coronavirus Response Act
- The Coronavirus, Relief, and Economy Security (CARES) Act
- The Consolidated Appropriations Act
- The American Rescue Plan Act (ARPA)
- The Infrastructure Investment and Jobs Act
- The Inflation Reduction Act
This is one of the first actions of this new session to address the state’s projected $17.6 billion surplus. This move also addresses a tax code that last had a federal conformity update through December 2018.
MNCPA Legislative Digest Live
Please join me for our first MNCPA Legislative Digest Live of the new session for a more in-depth discussion about the federal conformity tax changes.
The Legislative Digest Lives occur every other Friday during the legislative session, giving MNCPA members an opportunity to hear about what’s happening at the Minnesota Capitol and to ask me questions. We also invite in guests, including leaders at the Capitol to tax experts, to discuss legislation.
Also, don’t miss any future Legislative Digest Lives. Head to the MNCPA website to sign up for alerts.
Learn more
Upcoming webinar about federal conformity changes
22WM-0006: Minnesota Tax Update: Federal Conformity (Webinar)
Thursday, Jan. 26 | 2 CPE
Join the MNCPA for this 2-credit webinar featuring Geno Fragnito and MNCPA member and speaker Dan Kidney. Learn about the practical applications and what conformity means for businesses and the clients CPAs represent.
Register now
Topics: Legislative & Government Affairs, Government
Geno Fragnito
Geno Fragnito is the MNCPA government relations director, advocating on behalf of the CPA profession. His days consist of last-minute meeting changes, building relationships with lawmakers, helping CPAs navigate state government, and putting in more than 15,000 steps per day walking the halls of the Capitol. Geno unwinds with a little golf and traveling with his family. If he weren’t a lobbyist, Geno would perfect his cast and be a professional fisherman. Geno can be reached at 952-885-5550 or gfragnito@mncpa.org.
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