Committee hears bill to allow portability of Minnesota estate tax exclusion between spouses

Senate File 30, a measure to permit portability of the Minnesota estate tax exclusion between spouses, was presented to the Minnesota Senate Taxes Committee. Sponsor Sen. Karin Nelson described the bill as aligning Minnesota with federal treatment that allows a surviving spouse to elect to use a deceased spouse’s unused federal exclusion. The bill would allow spouses to elect transfer of the deceased spouse’s unused state exclusion up to Minnesota’s $3,000,000 threshold and sets an effective date of June 30, 2025, as described by the sponsor.

Witnesses included Todd Coke, a Minnesota CPA and retired partner at Knutson & Company, and Hunter Peterson, public policy specialist for the Minnesota Farm Bureau Federation. Coke testified with examples showing how the order of death can affect tax liabilities for small-business owners and farm families and argued that portability would let couples use exclusions as intended without complex estate planning. “The order of death shouldn’t matter,” Coke said.

Peterson emphasized that family farms are often asset-rich but cash-poor because wealth is held in illiquid assets such as land and equipment; he said portability would help keep family farms intact by reducing the risk of estate-tax-driven sales. The committee’s fiscal memo cited an estimated revenue impact of about $300,000 in 2026, $1.6 million in 2027 and rising in later years.

Committee members discussed parity with other states and noted Minnesota is an outlier in exclusion amounts and rates. The committee laid Senate File 30 over for possible inclusion.