HF 5 Minnesota House · 2025-2026 Regular Session

Imposition and allocation of certain taxes modified, tax analysis required, transportation funding impacts analysis required, retail delivery fee repealed, unlimited Social Security subtraction provided, previous appropriation and transfer modified, reports required, money transferred, and money appropriated.

HF 5 modifies Minnesota's tax structure by repealing the retail delivery fee and establishing an "unlimited Social Security subtraction," allowing taxpayers to subtract all their Social Security benefits from state taxable income. It redirects transportation funding by creating a "transportation advancement account" and requires specific distribution percentages: 36% to metropolitan counties, 28% to county highway funds, 23% to larger cities, 34% to small cities, 15% to town roads, and 1% to food delivery support. The bill also mandates tax analysis and reporting requirements for transportation funding impacts and modifies several tax statutes, including those governing Social Security benefit subtractions. These changes directly affect Minnesota taxpayers, local governments, and transportation agencies, effective July 1, 2025.

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 6, 2025 Last action Apr 9, 2026

Maddy AI version diff · 2 comparisons

What changed between versions

1st Engrossment → 2nd Engrossment · 5 edits · Mar 3, 2025

MODERATE

This bill was revised from the 1st to the 2nd engrossment, updating the effective dates for new tax provisions and reallocating funding between state accounts. The most significant change is the increase in the electric vehicle registration surcharge from $75 to $150, which will generate more revenue for transportation infrastructure. Additionally, the bill restructured how certain sales tax revenues are distributed, shifting a larger portion to the Metropolitan Council and metropolitan counties to support regional transit and road projects.

Scope change

The bill's scope regarding revenue allocation was expanded to include new funding sources for the transportation advancement account, while the scope of the electric vehicle tax was broadened by increasing the fee amount.

FISCAL

The electric vehicle registration surcharge was increased from $75 to $150, effective July 1, 2025, to generate additional revenue for transportation funds.

The distribution of sales tax revenues was adjusted, increasing the percentage allocated to the Metropolitan Council and metropolitan counties to support regional transit and road improvements.

New transfers were established to move funds from the general fund to the transportation advancement account to ensure adequate resources for state highway projects.

TIMELINE

Effective dates were updated for various sections, with the new electric vehicle tax applying to registrations starting on or after July 1, 2025, and other provisions taking effect in August 2025 or July 2025.

DEFINITION

The definition of 'Social Security benefits' was clarified to align with the Internal Revenue Code for tax subtraction purposes.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 3, 2025

Lower · Passed

Committee report, to adopt as amended and re-refer to Transportation Finance and Policy

lower

Feb 13, 2025

Lower · Passed

Committee report, to adopt as amended and re-refer to Taxes

lower

Feb 6, 2025

Introduced

Introduction and first reading, referred to Transportation Finance and Policy

lower

1 primary · 31 co-sponsors