A bill was introduced in the Minnesota House this past legislative session that sought to impose an annual tax of 1% on any “taxable wealth” that exceeds $10,000,000. Known as the “Wealth Tax” or HF 4616, the proposed bill joins others around the country seeking to tax the value of “property, real or personal, tangible or intangible, but excluding property with a situs outside of MN, minus the sum of debts and financial obligations owed.”
The bill directs property values to be determined using the same standard as the federal estate tax, which is generally fair market value. Some assets, like marketable securities, should be relatively easy to value annually for the purpose of computing the tax due. However, other assets, such as closely held business interests, would require annual appraisals/valuations.
The Revenue Department estimates that about 5,600 taxpayers would be subject to the tax, and the Department predicts that upon initial enactment, the tax will raise $288.3 million for the General Fund, with a steady increase of about $2 million each year in subsequent years. However, critics are skeptical of this prediction, citing the consequences the state of Washington faced after enacting a similar tax. Washington projected the tax would generate $3.2 billion in additional revenue; however, Jeff Bezos quickly relocated to Florida, taking 45% of the wealth tax’s projected revenue with him. Skeptics fear that passing HF 4616 in Minnesota, a state already perceived as highly taxed, could lead to residents moving towards more competitive, lower-burden states.
Current Legislative Status
Importantly, as of May 2026, the proposal remains a bill and is not law. The bill was introduced in the House and referred to the House Taxes Committee to be considered for the possible omnibus bill inclusion. However, the final tax bill (HF 2438) passed by both chambers of the legislature did not include any provisions from the Wealth Tax bill. Although it did not pass during the 2026 legislative session, there are indications that it could be reintroduced in future sessions.
Impact on Minnesotans
While not all Minnesotans would be impacted by this bill if it eventually becomes law, the proposed bill may be of interest to those not directly affected, as it reflects a broader debate over how Minnesota taxes income, investment returns, and accumulated wealth (both in life and upon death). Additionally, practical questions arise with respect to determining the value of certain assets and whether individuals subject to the tax may relocate.
For now, HF 4616 remains a proposed bill that did not hit Governor Walz’s desk on May 20th. However, the bill is likely to be revisited in future sessions, so individuals, business owners, and trustees should continue to monitor legislative developments.
If you have any questions on the information above, please contact Cole Hickman at hickman@hjlawfirm.com.
