June 1, 1995
TO: TAX COMMITTEE No. 21-95
MINNESOTA MEMBERS
RE: MINNESOTA DROPS PROPOSAL TO REVOKE TAX EXEMPTION FOR STATE
BONDS
______________________________________________________________________________
As we previously informed you, this spring the Minnesota House of Representatives approved
legislation that would have eliminated the exemption from state income tax for interest earned on bonds
issued after June 30, 1995 by the State of Minnesota. The legislation, which was an amendment to an
Omnibus Tax Bill, would not have altered the state tax exemption for bonds issued by Minnesota local
governments or agencies and would have had no effect on any bond's federal tax exemption. The
conference committee that reconciled differences between the House passed version of the Omnibus Tax
Bill and the version approved by the Minnesota Senate, which did not contain any provisions effecting
state or local bonds, agreed to eliminate the amendment. Both houses of the legislature passed the
revised bill and shortly thereafter the legislature adjourned for the year. Thus, the proposal has been
defeated for this year.
We will keep you informed of developments.
Peter J. Cinquegrani
Assistant Counsel - Tax