Tax on professional services bill receives hearing
March 14, 2025 | Geno Fragnito
The MNCPA stands strongly against a section of
Senate File 2374, which would establish a tax on professional services, including accounting.
The bill is scheduled to be heard in the Senate Taxes Committee on Wednesday, March 19. The bill is authored by Sens. Ann Rest and Matt Klein.
A perennial topic in Saint Paul over the years, this idea plays a key part in Gov. Tim Walz’s proposed budget to add new revenue while looking at budget cuts in some areas. Reactions from lawmakers have been mixed at best — some support broadening the tax base and lowering the overall rate but may not support this plan; others oppose raising taxes entirely.
Democrats hold a one-member majority (34-33) in the Senate. A House companion bill has yet to be introduced, but the House is tied 67-67 with a power-sharing split after Tuesday’s special election for a vacant House seat. The bill could get through the Senate but will face a more difficult path in the House.
This is why it is important legislators hear directly from you about this issue — regardless of their party affiliation. Please reach out to those who have a voice in this discussion.
The proposed tax on services like audit, bookkeeping, tax preparation and payroll would represent a notable change. This additional tax is introduced as proponents say Minnesota has shifted from a goods-based economy to primarily a service-based economy.
Please
let me know if you have any questions and the MNCPA will be sure to share updates on this proposal moving forward.
Topics: Legislative & Government Affairs, Government
Geno Fragnito
Geno Fragnito is the MNCPA government relations director, advocating on behalf of the CPA profession. His days consist of last-minute meeting changes, building relationships with lawmakers, helping CPAs navigate state government, and putting in more than 15,000 steps per day walking the halls of the Capitol. Geno unwinds with a little golf and traveling with his family. If he weren’t a lobbyist, Geno would perfect his cast and be a professional fisherman. Geno can be reached at 952-885-5550 or gfragnito@mncpa.org.
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