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| Date: | May 3, 2012 | | Contact Name: | Peter Winiecki | | Contact Phone: | 651-297-8077 | | Contact Email: | peter.winiecki@senate.mn | | For Immediate Release | |
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| MINNESOTA SENATE SETS CLEAR PRIORITIES FOR TAX RELIEF AND JOB CREATION Bill provides immediate tax relief for families and small businesses for 2012 |
St. Paul -- Following earlier action by the Minnesota House of Representatives, the Minnesota Senate approved the jobs and tax relief conference committee report on Thursday which offers $51.7 million in immediate tax relief and for $200 million over the next three years. During the legislative process, lawmakers focused their efforts in stimulating economic development activity, job creation and homeowner tax relief.
“This tax relief and jobs bill is all about setting priorities; we are sending the message that we are serious about putting Minnesota taxpayers’ and economic interests ahead of government. This bill represents sound fiscal policy and will immediately generate thousands of jobs,” said Deputy Majority Leader Julianne Ortman (R-Chanhassen), Chair of the Senate Tax Committee and the bill’s chief author.
A key component of the bill freezes the business property tax and eliminates the automatic inflator, which under current law, increases with inflation every year. The compromise bill calls for the state’s levy amount to be frozen at $817 million, although it should be noted that businesses will continue to pay their local property taxes. Without the freeze, the statewide levy would escalate to over $1billion for business property taxpayers by 2022.
“We strongly support improving the private sector economy through property tax relief to all businesses by reforming the business property tax. Business owners currently pay approximately 30 percent of their property taxes to the state,” said Sen. Ortman. “This tax was levied for the first time in 2001, which has increased sharply from $541 million in 2001 to $800 million in 2012. Our goal is to make more capital available for investment, equipment, expansion and additional employees.”
Also included, is a phased-in, upfront sales tax exemption for capital equipment purchases which would be effective in July 2012 and will encourage immediate investments and orders, and is expected to generate a surge in business activity in the state. The exemption applies to purchasers employing 80 or fewer employees during calendar year 2012.
Lawmakers also included homeowner tax relief in this bill, increasing the formula for the targeted homeowner property tax refund from the state from 60 percent to 90 percent of the amount of the increase for the greater of 12 percent of the previous year’s tax or $100. Looking forward, for taxes payable in 2013, this bill increases the formula for the targeted homeowner property tax refund from the state from 60 percent to 75 percent of the amount of the increase for the greater of 12 percent of the previous year’s tax or $100.
Other notable provisions include increasing the second tier of the Research and Development tax credit from 2.5 percent to 3.1 percent and increaseing the Angel Investment Tax Credit cap by $4.5 million in FY 2013, and $5 million in FY 2014 and 2015.
Senator Ortman concluded: “This bill represents a reasonable compromise that includes some of Governor Dayton’s requests such as $2 million for Minnesota Investment Fund and $6 million for a tax credit for hiring Veterans. We have compromised and substantially lowered the amount of our tax reductions and reforms in order to meet the Governor’s concern of budget tails.”
The complete conference committee report can be viewed at:
https://www.revisor.mn.gov/bin/bldbill.php?bill=ccrhf2337B.html&session=ls87
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