Legislative Update: April 2026
April 21, 2026
Minnesota Legislative Session – Commercial Real Estate & Tax Issues
The legislature is back from break. Committee time is pressing against financial deadlines but soon will transition to more Senate & House chamber time to pass omnibus bills. With predictable increased political fodder in an election year, we have not seen sweeping changes in this closely divided legislature. There have been a lot of discussions on issues such as combatting fraud and reducing costs for consumers, but little consensus on how to address those problems.
Key issues we are tracking:
Federal Tax Conformity – Pass Through Entity Tax Extension
HF 3127 / SF 3405
What was supposed to be a “no brainer” has turned into a headache - just ask any accountant. This was a workaround to take advantage of the State and Local Tax deduction that expired in 2025. Ideally, it needed to be renewed before April 15th; however Democrats blocked it for HCMC funding. There is no consensus on how this critical hospital will be funded, but most understand that there is a need.
Without action, approximately 66,000 Minnesota tax filers will be impacted, and millions of dollars will shift to the federal government rather than remain in Minnesota. We are hopeful this commonsense reform will pass before they adjourn May 18th.
TIF Reform – Adaptive Reuse
We are currently working on how we can reform Tax Increment Financing (TIF) in order to address the obsolete buildings in our state. The approach will raise commercial property values and help lift the burden off residential areas. David Anderson with Frauenshuh has worked on TIF projects for decades and is leading this charge. If you have ideas, please reach out to Dave.
If a property's value declines 30% in 5 years, the sales price is 50% less than other comparable buildings, or constructed in or before 2000, then the project could qualify in a “Conversion District” for another use. We have been warning the legislature about the shift in property valuations for years. The top seven taxable office buildings in downtown St. Paul took an average 16.5% hit to their estimated sale price this year, according to the Ramsey County Assessor’s Office. In Minneapolis, many large buildings have taken over 20% drop in assessed values. The legislators we are trying to convince are only looking at tax credits for residential properties. There is also legislation to create a property task force.
Data Privacy & Property Tax Appeal Reform
HF 2959 / SF 3804
Working alongside BOMA, we have been meeting with the county assessors to find common ground and we’re making progress! We are hopeful that we can find consensus on what data is collected, and a 30-day grace period after the deadline to provide additional information.
Artificial Intelligence (AI) Regulation
We signed onto a coalition of organizations promoting a federal framework with no new state AI regulations in MN this session, pointing out that existing laws govern potential harms, and encouraging the establishment of a clear structure to evaluate AI-related policy moving forward.
Non-Disclosure Agreements (NDAs)& Data Centers
HF 4077 / SF 4379
Likely you are aware of the concerns that have been raised around data centers, and this legislation would ban all NDAs. As developers, I’m sure you can understand the issues this would cause. In response, they introduced SF 4548 banning NDAs only on data centers. A good thing about divided government is that bad legislation is also hard to pass.
Landlord/Tenant Rights
A number of bills have been introduced giving tenants more leeway before eviction, rent control, etc.
City of Minneapolis Proposals
The city is up to their own ideas on how to generate more money through a deed transfer tax, income tax on wages if you work or live in Minneapolis, vacancy tax and more. They hired a consulting firm to evaluate how much revenue they generate compared to other cities like New York, San Francisco, Denver, etc. on taxes generated on a per capita basis, and then justify raising taxes and fees. It is a great way to use statistics to get the outcome you want.
Additional Bills of Note
Adding independent contractors and payors to the centralized work reporting system and required reporting.
Single-family home ownership restricted for corporate entities, increased deed tax rates on conveyances of single-family homes provided to corporate owners, state portion of revenues dedicated from the increased deed tax rates for the workforce and affordable homeownership program, and statewide landlord database created.
Advertising services tax imposed.
1% annual tax on "taxable wealth" exceeding $10 million for individuals & trusts.
Recommendations from the Legislative Working Group on CIC & HOAs.
Single family home ownership restricted for corporations and private equity companies.