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In a move aimed at boosting state revenue, the Minnesota Legislature has passed a new taxation bill that will see changes to income and sales tax rates in the state. The bill, which was approved by a narrow margin in the Senate and House of Representatives, is set to go into effect on January 1, 2026.One of the key provisions of the new taxation bill is an increase in the income tax rates for individuals and businesses earning over $250,000 annually. Under the new law, those in the top tax bracket will see their income tax rate rise from 9.85% to 10.5%. This change is expected to generate an additional $100 million in revenue for the state.In addition to changes in income tax rates, the new bill also includes a modest increase in the state sales tax rate. Starting in 2026, the sales tax rate will rise from 6.875% to 7%. This increase is projected to bring in an extra $50 million in state revenue.State lawmakers have defended the new taxation bill as a necessary measure to address budget shortfalls and meet the growing needs of Minnesota residents. In a statement, Governor Mark Dayton praised the legislation, stating that it will help fund important programs and services while ensuring that the state remains financially stable.However, not everyone is pleased with the changes. Some critics argue that the tax increases will place an undue burden on high earners and businesses, potentially driving them out of the state. Others have raised concerns about the impact on low and middle-income families, who may feel the pinch of higher sales tax rates.Despite the controversy surrounding the new taxation bill, it looks set to become law in Minnesota. As the state prepares for the changes to take effect, lawmakers are already looking ahead to the next fiscal year and considering further measures to ensure the state's financial health.