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Committee hears bill to deny state conformity with federal Section 530 safe harbor for worker misclassification
Summary
Senate File 210 would prevent Minnesota from adopting the federal safe harbor (Section 530) that can allow employers to avoid payroll tax liability after misclassification findings; the Department of Revenue supports the bill but noted operational implications.
Senate File 210, authored in the hearing by Senator Verbaten, would amend Minnesota’s income and franchise tax definition section (Minn. Stat. ch. 290.01) to decline state conformity with the federal Internal Revenue Code provision commonly referred to in testimony as Section 530. The committee heard the measure Feb. 19 and laid the bill over for omnibus consideration.
Senator Verbaten told the committee Section 530 creates a “permanent cure” for employers who have misclassified employees as independent…
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