The bill proposes the establishment of a direct free filing system for individual income tax returns in Minnesota, to be developed by the commissioner of revenue. This system will allow taxpayers to electronically file their income tax returns at no cost. The commissioner may collaborate with a software vendor for the development of this system, provided that the vendor does not offer paid tax preparation services for Minnesota taxpayers during the active years of the system. The bill outlines a timeline for implementation, requiring a pilot version to be available by the end of 2024 and full access for all individual filers by the end of 2026. Additionally, the commissioner is tasked with coordinating this state filing system with federal direct file options where feasible.

To support the implementation of this filing system, the bill includes a provision for a one-time transfer of funds from the general fund to the tax filing modernization account for fiscal year 2025. This transfer is intended to facilitate the development and operation of the new filing system. The effective date for the provisions of this bill is set for the day following its final enactment.