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State Representative Jeanne Poppe
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4193
For more information contact: Sandy Connolly 651-296-8877
NEWS COLUMN
TAX CONFORMITY, GREEN ACRES COMPROMISE HEADED TO THE GOVERNOR
This week, the Minnesota House passed the conference committee report for a federal tax conformity bill that will allow Minnesotans to take advantage of tax breaks passed by Congress while the state legislature was not in session. This bill will now be sent to the Governor for his signature.
Within each legislative body, the House and Senate created a different version of this bill requiring a conference committee to meet to work toward a common bill. Together the House and the Senate chose not to include every component of the federal tax bill in the final conformity bill, largely because of the high cost or minimal benefit to taxpayers. Some of the provisions that were passed include:
• Counting non-taxable combat pay as earned income for members of the military for the purpose of claiming the Earned Income Credit and the Working Family Credit;
• Allowance of direct transfers to charities from traditional IRAs and Roth IRAs for tax years 2008 and 2009;
• Changes requirements for employer-sponsored group health plans to qualify for the employee income exclusion; and
• Extension of special rule for contributions of conservation property by qualified farmers and ranchers.
The House in its version had maintained a bill with federal tax conformity as its substance while the Senate took the opportunity to amend provisions to fix Green Acres (ag land tax program) to their version. The conference committee thus had to sort through both a federal tax conformity bill and the tax implications of the Green Acres program. Minnesota landowners who hold non-agricultural land along with their ag property will breathe a sigh of relief to know a conclusion has been reached regarding the Green Acres program.
The Green Acres program was originally created to help farmers whose property values were increasing because of nonagricultural factors (e.g. development pressures). Under Green Acres, a qualifying agricultural homestead receives reduced property taxes. For several years, property tax administrators, assessors, and farmers expressed confusion and concern about some of the Green Acres provisions. Many suggested the program’s eligibility criteria were unclear, and others pointed to discrepancies between how individual counties determined who could apply and how agricultural land was valued. In February 2008, the Legislative Auditor released a report on the Green Acres program confirming several problems with program implementation.
In response to the Legislative Auditor’s report, a group of legislators from the House and Senate tax committees developed changes to address issues with the program. The result led to changes included in the 2008 Omnibus Tax Bill and signed into law by the Governor. However, since last summer as the roll-out of this bill came to light, it became evident these changes went too far and inadvertently made it more expensive for some farmers to participate.
The bill passed this week includes creating a new category for land called rural preservation, which will allow rural property owners to receive tax relief for non-productive land, as well as for agricultural property. At least 50% of the land must be used for agriculture. There was much deliberation and discussion to get to the final compromise. Fortunately all parties seem to be agreeable to the final solution. As spring arrives in Minnesota farmers can make informed decisions regarding how they intend to use their land either through production or preservation. Additionally, for those not already enrolled in the Green Acres program, the new bill establishes a more uniform method for entering the program and receiving the benefits thereafter.
Please continue to contact me if you have any questions or suggestions on any state or local issue. I can be reached at 1-888-682-3180 or 1-651-296-4193, by mail at 487 State Office Building, 100 Martin Luther King Blvd., St. Paul, MN 55155 or via e-mail at rep.jeanne.poppe@house.mn.
News Items
- POPPE SELECTED AS AGRICULTURE POLICY COMMITTEE CHAIR - (Posted: 2012-11-16 00:00:00)
- Rep. Jeanne Poppe Encourages High School Juniors to Apply for Minnesota House of Representatives Page Program - Application Deadline is November 19th - (Posted: 2012-11-12 00:00:00)
- HORMEL INSTITUTE EXPANSION SIGNED INTO LAW - 2012 legislative session adjourns sine die - (Posted: 2012-05-11 00:00:00)
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