Rochester lawmakers want to eliminate tax on Social Security income
(THE MED CITY BEAT) - Two Rochester lawmakers are part of a group of Republicans in the Minnesota Senate pushing a bill that would eliminate the state tax on Social Security income.
The "Retire in Minnesota Act" would completely phase out the tax over the next decade. The AP notes Minnesota is just one of seven states that apply an income tax to Social Security. Under the current law, only seniors who make less than $25,000 a year are exempt.
Senators Dave Senjem and Carla Nelson, both of Rochester, attended a news conference Tuesday to introduce the bill. They argue the tax savings would encourage more retirees to stay in Minnesota.
“You’ve got people who live in Rochester or Winona, all they have to do is move across the river, and they don’t pay tax on their Social Security, and they get to stay close to their family,” said Sen. Senjem, according to a report by the Star Tribune. “There are some states where they can just move a few miles and be in a place where they have much better financial security.”
Lawmakers estimate the proposal would cost the state about $127 million over the next two years. However, they expect the financial gain of seniors staying in the state would offset any lost revenue.
The Post-Bulletin reports House Taxes Committee Chairman Greg Davids (R-Preston) will sponsor a companion bill in the Minnesota House. Gov. Mark Dayton has not yet commented on the proposal.