What passed, what didn't and what it means for your business

The 2026 legislative session concluded at midnight on Sunday with the Minnesota Chamber having achieved many of its goals for the session, above all a more balanced approach to policymaking that helps to advance our state’s economy and a growing recognition that Minnesota has the potential for more growth and success, but is not turning its assets into results. 

Our priorities for the session included improving tax competitiveness, employer-focused flexibility in implementing various workplace mandates that are having direct impacts on morale and productivity, fiscal responsibility and accountability for taxpayer dollars, balanced environmental regulations and reducing costs for employers and families from health care to energy to transportation. The results of our work are detailed below.  

ISSUES IMPACTING THE BUSINESS COMMUNITY

Taxes

WINS

• No new personal income or business taxes. The Chamber successfully advocated against harmful tax proposals like a 5th tier income tax, a social media excise tax, a digital ad tax, an expansion of the state sales tax to professional services, a CEO pay ratio tax and more.
• The state conformed with aspects of HR1 which passed last summer. The most notable business-friendly provisions included immediate R&E Expensing for pass-through entities, Section 179 Expensing, Bonus Depreciation and changes to the Business Interest limit.
• Revived and extended by two years the state’s Pass-Through Entity Tax to provide Minnesota businesses federal tax relief from the SALT cap.

CONTINUED CHALLENGES

• Hostility to business requiring the need to continue fighting for immediate R&E expensing for c-corps and a permanent PTE Tax extension.
• No progress on Minnesota high top-line income tax rates (2nd highest corporate rate and 6th highest personal income rate).
• No progress on tax administration proposals that would make navigating Minnesota’s complex tax code simpler and more predictable.
• Legislators constantly seeking new or increased taxes on businesses that would further harm Minnesota's competitiveness.

Workplace management

WINS

• No new workplace mandates. After 35+ new workplace mandates were imposed under the DFL trifecta last biennium, the Chamber successfully advocated against any additional, onerous labor mandates and employment regulations on the use of artificial intelligence (AI).
• That being said, a number of new workplace mandates were introduced and pursued this biennium.  
• Notable proposals that were introduced but not passed included: significant AI-related regulation in employment settings, including the prohibition of various automated systems and electronic tools in Minnesota; a seating mandate; a prohibition on employer repayment agreements; additional requirements to the newly imposed job postings mandate; wage and benefit increases for certain industries at certain facilities; allowing striking workers to collect UI; an increase of the minimum wage to $20/hour; CEO pay ratio tax penalties; changing the standard as to whether an individual is an employee; holiday overtime pay requirement among others. 

CONTINUED CHALLENGES

• No substantive modifications to the sick and safe time law, the paid family and medical leave law or other workplace mandates requested by the business community.
• Hostility to employers requiring the need to continue fighting against new workplace mandates on businesses that negatively impact workplace dynamics.
• Policymakers’ general lack of understanding regarding how businesses operate in a global economy and the operational challenges for both employers and employees that Minnesota-specific business regulations have on the cost of doing business and our state's competitiveness. 

Health care

WINS

• No new health care mandates: The Chamber successfully defended against a host of new health care mandates on the fully insured commercial market. While often well-intended, added mandates lead to increased cost of health insurance coverage for businesses and employees.

CONTINUED CHALLENGES

• There was no extension of the successful reinsurance program, which helps reduce the cost of premiums in the individual market. The program remains funded through 2027, when the Chamber will once again advocate the need for this program to legislators.
• Legislators continue to pursue costly health care mandates which increase the cost of coverage, thereby reducing affordability for businesses and employees. The Chamber will continue to support state defrayal requirements for new mandates.
• The Chamber remains concerned about the increasingly adversarial rhetoric directed at Minnesota’s private insurance market. Health care affordability challenges are real, but this rhetoric will push policy conversations towards a government-run public option that could disrupt employer-sponsored coverage, reduce competition and increase costs for Minnesota employers and employees.
• Legislators are increasingly interested in regulating artificial intelligence across all industries, including health care. We are concerned that AI regulation could stifle health care innovation.

Environment

WINS

• PFAS reporting: The Chamber successfully secured an exemption to PFAS reporting for all products manufactured prior to July 1, 2023.
• No new environmental mandates: We successfully stopped restrictions on industrial water use, further chemical bans and reporting requirements, a punitive retroactive tax on permitted energy users, mandatory environmental impact statement categories for data centers and feedlots, a bottle tax and more.

CONTINUED CHALLENGES

• Legislators continue to message on the need for restrictions on water use in certain cases.
• No adjustments to PFAS reporting final date and 2032 ban on all products containing intentionally added PFAS.
• No adjustments to Extended Producer Responsibility for paper and packaging.

Commerce

WINS

• No bans on nondisclosure agreements for economic development: The Chamber successfully defeated multiple proposals this session which would have banned NDAs between municipalities and other local units of government and businesses. One proposal would have banned NDAs for any economic development purpose, and the other would have banned them for data center construction.  
• No broad AI regulatory frameworks: After more than 40 proposals introduced this session to regulate artificial intelligence, there were no AI regulatory frameworks passed which would have regulated or prohibited routine business practices, such as pricing and automated decision systems. We continue to encourage policymakers to first consider the benefits of a federal regulatory approach to AI and to hold thorough discussions about state level regulation that includes input from a variety of experts.

CONTINUED CHALLENGES

• Data centers continue to be a source of bipartisan opposition in the Minnesota Legislature. Opposition appears in multiple committee areas, and the Chamber continues to oppose efforts to curtail this sector of economic growth.
• Businesses should expect continued legislative efforts to regulate how AI tools are used across workplace operations, customer service, hiring and other day-to-day business functions. The Chamber will continue to oppose efforts to create a patchwork of artificial intelligence regulations.
• The Chamber expects continued legislative efforts to increase government involvement in private business decisions, including executive compensation, corporate governance and operational practices in regulated industries.

Energy

WINS

• A study on the development of new nuclear energy generation in Minnesota. The Chamber has long supported policies that maintain existing nuclear facilities while championing policy reforms that position our nuclear energy future to be in step with peer states.

CONTINUED CHALLENGES

• Likely continued efforts to cap ratepayer recovery of executive compensation for large utility providers. Similar proposals have been passed in other states. The Public Utilities Commission already takes executive compensation into consideration when deliberating rate cases.
• Proposals to increase building performance standards to include strict limits on greenhouse gas emissions for larger commercial and government buildings – including multi-family housing. 
• New requirements for certificate of need for pipeline projects to include product demand forecasting. 
• EAW/EIS review mandates for new data center projects will likely be introduced again next session. 

Transportation

WINS

• One-year reduction in license tab fees. Beginning January 1, 2027 license tab fees will be reduced to 2022 rates for one year. The Chamber consistently engages across all policy areas how state policies can significantly increase costs, which directly impact employers’ ability to provide goods and services at competitive prices and employees’ ability to afford their lives. 

CONTINUED CHALLENGES

• Establishing a regulatory framework for connected and automated vehicles (CAVs). This issue received much attention earlier in session but faced strong resistance from transit advocates and labor unions. They want to study the economic impacts of CAVs and want to require a human driver present in driverless vehicles.
• Human driver requirements for commercial CAVs did not move out of committee this session. 
• Changing vehicle registration rates to include vehicle weight as a component of the fee schedule. The proposal this session would have eliminated the surcharge for electric and hybrid vehicles and instead implement a surcharge based on vehicle weight. The one-year reduction in vehicle registration fees will likely lead to a discussion of altering the method by which vehicle registration fees are calculated.
• Resilient pavement standards that require a 50-year design life. It is a continuation of the debate between asphalt versus concrete roadway paving. Further compromise was achievable this session had a transportation policy package moved forward.

STAY TUNED!

The Chamber’s 2025-2026 voting record will be released this summer. It is a guide for voters to judge how their legislators voted on the issues that matter to our economy. We welcome your engagement in our elections work and invite you to participate in our policy development process this summer and fall.  

Thank you for your membership with the Minnesota Chamber. Please reach out to the team at any time. 

651.292.4650

[email protected]

380 St. Peter St., Suite 1050
St. Paul, MN 55102