Individual income tax and corporate franchise tax phased out.

Minnesota House Bill HF3115, introduced on April 3, 2025, proposes a gradual elimination of the state's individual income tax and corporate franchise tax. The bill outlines a phased reduction in tax liabilities over several years, starting with a 20% reduction after December 31, 2025, and continuing with further 20% reductions each subsequent year, culminating in the complete elimination of these taxes after December 31, 2028. Additionally, refundable tax credits exceeding a taxpayer's liability will be adjusted in line with the scheduled tax liability reductions.

Supporters of HF3115 argue that phasing out the individual income tax and corporate franchise tax will stimulate economic growth by increasing disposable income for residents and encouraging business investments. They believe that reducing the tax burden will make Minnesota more competitive and attractive to both individuals and businesses.

Critics of HF3115 express concerns about the potential loss of significant state revenue resulting from the elimination of these taxes. They worry that this could lead to budget shortfalls, necessitating cuts to essential public services such as education, healthcare, and infrastructure. Opponents also argue that the tax cuts may disproportionately benefit higher-income individuals and corporations, potentially exacerbating income inequality.