The $1.8B bonding bill passed both the House and Senate yesterday (10/15/20) in St. Paul.  The jobs and infrastructure bill has far reaching impacts through the state of Minnesota, including here in the Owatonna area.  

First, for businesses, section 179 conformity is something businesses along with chambers have been pushing for years and it was passed in this bill.  A business is allowed to use section 179 based on the amount of its qualifying capital expenditures in a taxable year.

Why is federal conformity important?


Section 179 of the federal tax code dictates when businesses can deduct the cost of purchasing certain equipment. In 2019, Minnesota conformed to some federal tax reforms, but not many of the expensing provisions. This put small businesses and farmers at a disadvantage and hit many with retroactive bills.  Aligning state and federal tax codes for section 179 expensing:

• Help small businesses and farmers reinvest in Minnesota to help grow our economy.
• Fix retroactive tax increases for like/kind exchanges to 2018 and 2019.
• Improve Minnesota’s competitiveness as most states, including neighboring states, have already conformed with federal law.
• Reduce tax compliance complexity and costs.