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Bill which repeals taxes is a ‘good start’

Monday, March 24, 2014

 

By Rep. Paul Anderson

The tax bill, which was finally passed and sent to the governor last Friday afternoon, was a long time in coming.

After House passage of its own tax repeal bill three weeks earlier, the Senate did not follow suit and take quick action to repeal the business-to-business taxes they had enacted just last year. It wasn’t until Gov. Mark Dayton took Senate Democrats to task that action heated up. The bill was marked up in their tax committee last Wednesday and sent to the floor the following day.

Normal procedure calls for bills, when arriving on the floor, to have their second reading and not be up for debate for at least another day. Republicans wanted that extra day to study the bill and wouldn’t relent to waiving the rules so it could be heard immediately. That’s when more political posturing took place with the governor blaming Republicans for the one-day delay in passing the bill. That was after his own party had delayed action for several weeks, right during tax-filing time.

In any event, the bill was passed and, as I said on the House floor during debate, it was a “good start.” The bill repeals just more than $440 million in taxes and adds several items to Minnesota’s list of federal conformity. Of great importance to residents of our district is the repeal of sales taxes on the repair of agricultural and other commercial equipment. I was disappointed the repeal was NOT made retroactive, so there will be no refunds of the tax already paid. Sales tax on the labor portion of repair bills will disappear on April 1. The tax on telecommunication equipment and the warehousing tax were also repealed.

We are being told another tax bill is forthcoming. Keep in mind that the DFL-controlled Legislature raised taxes last year by over $2 billion, and projections call for $1.2 billion to be left in state coffers at the end of the current biennium. With the repeal bill just passed, and with another $150 million set aside in the budget reserve, there is still a healthy sum left (about a half-billion dollars). Some departments have been given revised targets, meaning they will have more money to spend yet this year. For example, transportation is in line to get an additional $50 million. It’s also possible the bonding bill will be increased past the agreed upon limit by using cash to pay for additional items.

Another part of the tax bill just passed is the repeal of the “gift tax” in Minnesota. We were one of only two states that had this type of tax, and its repeal is good. The inheritance tax exemption is also going to ratchet up over the next five years. The current exemption is $1 million and, starting next year, that amount will go up by $200,000 each year until it reaches $2 million. The three-year “look-back period” for gifting will remain, however.

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We just can’t seem to get winter to release its icy grip. Sloppy and slick driving conditions last week followed by cold weather over the weekend left many wondering when spring will actually arrive. The wind chill at many locations dipped below zero once again. Road restrictions are in place, and pot holes have also made their presence known. Thanks to all our road crews for their work this winter in keeping the roads as safe as possible. Not only was it cold, but we had so much wind, which made their work even more difficult. We sometimes take for granted that they will be out working in any conditions. So, to those who plow our township, city, county and state roads and highways, thanks for a job well done.

 

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