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HF 3255

Imposition of certain taxes during a shutdown period prohibited.

2025-2026 Regular Session Introduced by Tom Dippel and 7 co-sponsors

The bill freezes income and consumption taxes during a defined government shutdown, pausing wage withholding and tax on transactions.

Author added Jacob
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Bill Summary · HF 3255

Summary of HF 3255 (Minnesota, 2025-2026)

Purpose and intent

HF 3255 seeks to prohibit the imposition of certain taxes during a “shutdown period” of state government. Specifically, the bill would create a temporary tax relief framework that pauses wage withholding for taxes and prohibits consumption taxes during defined shutdown periods. The underlying aim is to prevent tax collection during times when general state operations are not funded.

Key provisions and changes

1) Subtraction for wages paid during a shutdown period (Section 1)

  • The bill adds a new subdivision to Minnesota Statutes § 290.0132 (W-2 wage-related subtraction rules).
  • New provision: Wages paid on which no tax is deducted and withheld under § 290.994, subd. 2, are treated as a subtraction from taxable wages.
  • Effective date: The day following final enactment.

2) No tax imposition during a shutdown period (Section 2)

  • Creates a new code section: [290.994] NO TAX IMPOSED DURING SHUTDOWN PERIOD.
  • Definitions:
    • “Consumption tax” means taxes under specific sections: 295, 296A, 297A, 297B, 297E, 297F, 297G, or 297H.
    • “Shutdown period” is defined as:
    • The time period starting July 1 of an odd-numbered year, and
    • When legislation appropriating money for the general operations of executive agencies, legislative offices/departments (including each house of the Legislature and the Legislative Coordinating Commission), or judicial branch agencies/departments (including courts) has not been enacted for the upcoming biennium beginning July 1 of that year.
  • Provisions during the shutdown period:
    • Subd. 2 (Wage tax withholding): No income tax shall be deducted and withheld from wages paid by an employer under § 290.92 on any day falling within the shutdown period or within ten days after the period.
    • Subd. 3 (Consumption taxes): No consumption tax shall be imposed if the activity or transaction giving rise to the tax occurs during the shutdown period or within three days after the period.
  • Effective date: The day following final enactment.

Who or what would be affected

  • Employees: Changes to wage withholding; during shutdown periods, employers would not deduct state income tax from wages, per § 290.92.
  • Taxpayers engaging in activities subject to consumption taxes: Transactions during the shutdown period (and limited days after) would not be subject to those consumption taxes.
  • Government operations: The policy activates only when funding for the general operations of major state divisions is not enacted for the upcoming biennium.

Procedural and timeline aspects

  • Trigger for shutdown period: The first July 1 of an odd-numbered year, contingent on the absence of enacted appropriation language for the general operations of executive, legislative, and judicial branches for the forthcoming biennium beginning July 1.
  • Payment and withholding timing: For wage withholding, the prohibition applies on days during the shutdown period and extends to ten days post-shutdown.
  • Tax collection horizon: For consumption taxes, the prohibition applies to transactions occurring during the shutdown period or within three days after.
  • Effective dates: Both major provisions state that they take effect the day after final enactment, meaning they would apply as soon as the bill is enacted and signed.

Miscellaneous

  • Primary sponsor: HF 3255 was introduced in the 94th Legislature (2025-2026). Co-sponsors include Tom Dippel, Jim Joy, Steve Jacob, Drew Roach, Isaac Schultz, Max Rymer, Bryan Lawrence, and Elliott Engen.
  • Committee: Referred to Taxes (as of introduction).

If you’d like, I can compare HF 3255 to current Minnesota law, provide a plain-language example illustrating how withholding would work during a hypothetical shutdown, or summarize potential fiscal and administrative implications for the Department of Revenue and employers.

Compiled from official sources — confirm details with the bill’s official record.

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