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$103 million in further tax cuts for homeowners, farmers, renters and small businesses
Saint Paul, Minnesota – Fresh off the success of passing $443 million in tax cuts for more than one million Minnesotans, House Democrats passed their “Tax Bill 2” today on a unanimous vote of 125-0. Tax Bill 2 includes $103 million in further tax cuts for Minnesota homeowners, farmers, renters and businesses.
“Many sequels aren’t as good as the original, but ‘Tax Bill 2’ is going to get rave reviews from Minnesotans,” said House Majority Leader Erin Murphy. “Our economy is growing and we have already cut taxes for more than 1 million middle-class Minnesotans. Instead of catering to wealthy special interests, this bill provides a further boost to middle-class homeowners, renters, farmers and small businesses, which will only help our economy grow stronger.”
“We were pleased that we moved forward so quickly this session to cut taxes for more than one million Minnesotans, but we have more work to do this session to continue making progress,” said Rep. Ann Lenczewski, House Taxes Committee Chair. “This second tax bill focuses on ways to make further reductions in property taxes for homeowners, renters and farmers. We believe this is a responsible way to continue expanding our economy from the middle-out while maintaining our stable budget into the future.”
The tax bill signed into law this session by Governor Dayton made reduction to middle-class income taxes, largely through federal tax conformity. This second tax bill will cut taxes largely through further property tax relief. Tax Bill 2 includes $45 million in targeted property tax relief to Minnesota homeowners, renters, and farmers.
This property tax relief builds on progress from last session. The DFL-led Legislature responded to increasing property taxes last session by investing in significant middle-class property tax relief, including a $133 million investment in direct, targeted property tax relief. As a result, property taxes will decrease this year for the first time in more than a decade. Homeowners, in particular will see a $161 million decrease in property taxes this year. But since property taxes are up 86% for Minnesotans over the past decade, House DFLers took this step to provide further property tax relief for middle-class Minnesotans.
In addition to property tax relief, the House tax bill includes tax relief for Minnesota small businesses. The bill provides a property tax cut for small businesses with property value less than $1.1 million by excluding all commercial and industrial property value less than $150,000 from the statewide general property tax. The bill also includes sales tax reforms that provide additional sales tax relief to small businesses.
The bill also provides tax relief to our active military members. The bill extends our active military income tax subtraction to National Guard service members in the Active Guard Reserve.
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