SAINT PAUL, Minn. – Rep. Jon Applebaum (DFL-Minnetonka), Deputy Minority Leader, introduced legislation to mitigate the impact of tax increases many Minnesotans will feel following the recent passage of President Trump’s tax bill, which is projected to cost Minnesotans over $500 million in additional taxes paid to the federal government each year. Rep. Applebaum’s bill pushes back on the federal law – and saves Minnesotans money – by allowing the full property tax deduction for itemizers, expanding eligibility for the homestead credit refund to nearly all homeowners and renters, restoring the benefits of personal and dependent exemptions, creating a Minnesota moving expense credit, and expanding the charitable contribution credit, among other items.
“President Trump and Washington Republicans’ Tax Cuts and Jobs Act of 2017 raised taxes on Minnesotans by eliminating longstanding credits and deductions Minnesotans have counted on to ensure an even playing field,” said Rep. Applebaum. “The fact that thousands of Minnesotans frantically rushed to prepay their 2018 property taxes at the end of 2017 after the State and Local Tax (SALT) deduction was eliminated demonstrates that the Republicans’ bill was ill-advised. Working families deserve to keep more of their hard-earned money in their pockets, and my legislation will help ease the pain caused by the Republicans’ warped, pro-corporations tax bill.”
Rep. Applebaum’s proposal helps Minnesotans by allowing the full property tax deduction for itemizers on their state tax returns, a benefit formerly allowed to Minnesotans on their federal tax returns, which was capped under the Republicans’ tax bill. Rep. Applebaum’s bill also allows taxpayers to benefit from paying their property taxes by delivering a refund check to nearly all homeowners and renters, enabling most taxpayers to get some of their money back.
One way it accomplishes this is by eliminating eligibility caps on Minnesota’s Property Tax Refund program for renters and homeowners. The refund, often referred to as renter’s credit, homestead credit or circuit breaker, lowers the tax burden of renters and homeowners. Rep. Applebaum’s proposal would make nearly all Minnesota homeowners and renters eligible for the program by eliminating income caps while increasing the maximum refund to $3,250. Significantly, the refund schedule for renters would become more favorable by reducing income thresholds and co-pay percentages.
Rep. Applebaum’s bill also restores money Minnesotans lose through the elimination of federal personal and dependent exemptions, a piece of President Trump’s tax bill hitting Minnesotans especially hard. Rep. Applebaum’s legislation allows Minnesotans to count this amount as a subtraction on their state income taxes. Additionally, Rep. Applebaum’s bill eliminates the $500 floor on charitable contributions for taxpayers who use the standard deduction and allows them to subtract the full amount, an increase from 50 percent. Moreover, Rep. Applebaum’s bill creates a Minnesota moving expense credit to offset the federal moving credit that was removed in President Trump’s tax bill. To simplify income tax filing, Rep. Applebaum’s bill makes a variety of technical conforming changes to the new federal tax code.
President Trump’s tax bill includes a qualified business income (QBI) provision, providing a new 20 percent deduction for sole proprietors and pass-through entities. By eliminating this unnecessary, significant advantage for corporations and the wealthy, Rep. Applebaum’s bill ensures the new federal QBI deduction does not flow through in computing Minnesota tax by adding this amount back on to taxable income.
“I don’t want Minnesotans to take a back seat to corporations and billionaires receiving the bulk of the relief under President Trump’s overhaul,” Rep. Applebaum added. “My bill positively reforms the system with one goal in mind: to save you and your family money.”
Rep. Jon Applebaum serves District 44B in the Minnesota House of Representatives, which includes the communities of Minnetonka, Plymouth and Woodland. He can be reached by phone at 651-296-9934 or email at rep.jon.applebaum@house.mn.