Some DFL lawmakers want federal agents in Minnesota during ICE surge to pay state taxes
Operation Metro Surge is winding down, but there are still more federal immigration agents in Minnesota than normal.
Some Minnesota House Democrats think anyone who lived here over the course of the immigration enforcement action should pay state taxes.
The impacts of the ICE surge and any sort of accountability measures for some of the agents' actions — whether that's allowing Minnesotans to sue if their constitutional rights are violated or banning them from wearing masks — are top priorities for Democrats at the Minnesota Capitol this year.
On Wednesday, a bill in the House taxes committee would require those agents who weren't Minnesota residents but made any wages while working here to file a Minnesota tax return. The current threshold for other workers is $15,000 after which they owe.
The Minnesota Department of Revenue estimates the change could bring in $600,000.
Democrats argue that the whole operation cost an "exorbitant" amount of state and local resources, so these agents should pay their fair share.
"Minnesotans will effectively subsidize a federal enforcement operation that they did not request and that many do not support," said Rep. Athena Hollins, a Democrat from St. Paul. "Moreover, enforcing this requirement sends an important message. Minnesota will not allow its tax base to be eroded by temporary federal deployments that shift costs on our communities."
Republicans push for no tax on tips, overtime premium pay
The ICE income tax bill is eligible for possible inclusion in a broader tax package at the end of session, but it will need bipartisan support in a divided legislature for that to happen.
Republicans so far haven't backed any federal immigration-related proposals from Democrats, and instead think the focus should be things like fraud and tax cuts on overtime and tips to mirror the "One Big Beautiful Bill" changes.
On Tuesday, that same House committee discussed a measure that would align Minnesota's tax code with the recent updates to federal tax law, allowing deductions of up to $25,000 of wages from tips and overtime premium pay which is the "half" portion of time-and-a-half workers are paid.
"If we provide this federal conformity, it makes it easier to file their taxes. They'll be getting a commensurate benefit at the state tax that they are also getting as a federal benefit and it lets them keep more of their hard earned money and gets more money into the economy," said Rep. Kristin Robbins, a Republican from Maple Grove.
Passing both bills would be a nearly $500 million hit to the state budget in fiscal year 2027; tax cuts are considered spending when calculating the state budget.
Opponents raised concern that the tax cuts only capture some middle class workers, not all of them. But Republicans say it's an easy way to ease the financial burden for families struggling to afford their lives in a high-tax state.
