Comprehensive tax budget bill holds all Minnesota taxpayers harmless & does not raise gas tax
On a broad, bipartisan vote, Senator Torrey Westrom (R-Elbow Lake) joined his Minnesota State Senate colleagues in passing the comprehensive tax budget bill. The legislation expands tax relief to seniors, parents, farmers, small business owners, veterans, encourages affordable housing investment, and reduces property tax burdens. Importantly, it does not raise taxes during a state budget surplus, holds 100% of Minnesota’s taxpayers harmless, and delivers roughly half of all Minnesota taxpaying families a reduction in their tax burden.
“This bill holds every Minnesota tax payer harmless while delivering much needed tax relief to farmers and hardworking middle-income families,” said Senator Westrom. “Just as important as what’s in this bill, is what’s not in this bill. There’s no gas tax increase, no “sick tax”, and no tab fee increase, as the governor and House of Representatives have proposed. During a budget surplus, there is no reason to raise taxes on hardworking Minnesotans, and this bill accomplishes that goal while also growing the wallets of families.”
The legislation includes a tax cut of .25% to the second-tier income tax bracket, directly targeting middle-income families. If signed into law, this would be the first income tax rate cut for working Minnesotans in almost two decades. Further, it expands the ability for farmers and businesses to deduct equipment purchases to expand and invest in their operations and reduces the statewide property tax levy by $50 million per year beginning in 2020. Other provisions make additional funding available for affordable and workforce housing development and lowers taxes on affordable housing. Additionally, the legislation increases the income tax subtraction on social security, thereby increasing the income of Minnesota seniors. Moreover, the veterans homestead exclusion is extended to benefit more veterans and their spouses.
Further, families with children in school will benefit through an expansion of the K-12 education tax credit to include pre-school expenses, as well as expanding program eligibility through increasing the income threshold. The innovative Opportunity for All Kids (OAK) scholarship program is created in this tax bill by allowing charitable donations to fund education scholarships for kids of low-income parents. Lastly, additional school district equalization aid is available to help districts with low-tax capacity, especially in Greater Minnesota.
“Another key component to this bill is federal tax conformity,” added Senator Westrom. “This legislation simplifies our state tax code to fit federal government regulations, not only making it easier for every Minnesota taxpayer to file their taxes, but also ensuring maximum benefits from the recent federal tax changes. Minnesotans deserve to keep as much of their hard-earned income as possible, and this bill aims to do just that.”