Dear Neighbor,
On Thursday the House voted to pass a bill that brings Minnesota’s tax code in alignment with some provisions of the federal tax code in tax year 2013 with other major provisions to become effective in tax year 2014. This bill also repeals the sales tax on commercial/industrial repair as well as telecommunications machinery and equipment starting June 30, 2013. The sales tax on warehousing and storage is also repealed on the day following final enactment.
This legislation has about $200 million worth of deductions for Minnesota tax filers. The repeal of the three business-to-business taxes is estimated to account for $300 million of revenue out of the current budget. This leaves approximately $700 million available from the projected budget surplus totaling $1.2 billion.
While I’m happy we were able to lift some of the tax burden off Minnesota families, the bill did not go far enough. Notably absent from this legislation were two conformity provisions for tax year 2013:
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Increased Standard Deduction for married joint filers which would have saved 640,000 married couples for an average $112 per return
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Increased Eligible Expense Limit for Dependent Care Credit which would have saved 26,000 working moms and dads on an average of $80 per return.
While this legislation moves to the Senate, you’ll hear many House Democrats claim they voted to cut taxes for Minnesotans. The truth is that this bill simply un-does a few of the devastating mistakes Democrats made last session. While a step in the right direction, this proposal doesn’t go far enough and keeps approximately $700 million in government coffers. These dollars don’t belong in a vault in St. Paul or worse – spent on a lavish new office building for state senators. This money belongs in the pockets of hardworking Minnesota taxpayers.
As always, I am interested in your feedback. Please feel free to contact me by e-mail at Rep.Kathy.Lohmer@House.MN or contact my office at 651-296-4244. You can also send mail to my office address: 239 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155.
Sincerely,
Kathy