With two weeks left of the legislative session, tax conformity and Paid Family and Medical Leave take center stage

By Doug Loon
President and CEO
Minnesota Chamber of Commerce

Today, I want to focus on the final two weeks plus of the 2026 legislative session as we step into May. We know that the Legislature will have to wrap up on or before May 18, so lawmakers are entering a critical final stretch where major decisions will be made, and we fully expect them to take some action this year. This is a non-budget year and a bonding year, so the focus will be on what can be accomplished with the limited time remaining.

Tax bills are taking center stage at the Capitol, with both House and Senate proposals beginning to take shape. Some of these proposals would significantly increase Minnesota’s already high tax burden, raising concerns for employers and families. Rather than raising taxes, the business community is urging lawmakers to focus on tax conformity. This refers to aligning Minnesota’s tax code with recent federal tax changes. With the passage of new federal tax laws, Minnesota should conform to ensure consistency and competitiveness.

Several provisions are especially important to the business community. These include Section 179 expensing, bonus depreciation, the research and development tax credit, and support for pass through businesses. These policies are relatively modest in cost but important for encouraging investment and ensuring Minnesota remains competitive in attracting business activity.

Another key deadline approaching relates to the first payroll tax payment under the state’s paid family and medical leave law. These payments are due April 30. This new payroll tax adds to existing employer costs, including unemployment insurance and workforce development taxes. These combined costs continue to impact businesses’ ability to reinvest in operations and employees.

As the session winds down, lawmakers are actively negotiating and assembling the final bills that will determine what ultimately reaches the finish line. The Chamber continues to closely monitor these developments and advocate for policies that support economic growth and Minnesota’s competitiveness.

The next few weeks will be critical in shaping the final outcomes of this session and the direction of Minnesota’s business climate. Stay tuned for updates from the Minnesota Chamber as we near the finish line, and visit our website for additional information, resources and events. Thank you for joining us – we look forward to catching up with you on next week’s episode of the Minnesota Business Podcast. Have a great weekend!