Dear Neighbor,
I hope you and yours are having a nice summer and had an enjoyable Fourth of July holiday.
This is a huge time of the year for area businesses and our local economy in general, so let's hope we have a strong season. Tourism is a $12 billion industry annually for Minnesota. A report from Explore Minnesota shows that Cass County’s leisure and hospitality sector generated $93.7 million in 2011. Todd ($17.5 million) and Wadena ($14 million) counties also had significant hospitality earnings that year.
This business generated more than 2,600 jobs in Cass, Todd and Wadena alone during 2011. Leisure and hospitality jobs increased in both 2011 and 2012 after three consecutive years of job losses in that sector. Click here for the full report, available in the 2013 Tourism and the Economy Brochure.
Have fun, be safe and let’s support our local businesses this summer. They are the backbone of our area economy.
TAX INCREASES TAKE EFFECT
Another less joyous occasion took place July 1. That was when many of the $2.1 billion in tax increases and hundreds of millions more in fee increases Gov. Mark Dayton and fellow Democrats in the Legislature passed this year took effect.
Costly changes include taxes on online purchases, a new fourth-tier income tax rate, increased cigarette taxes and increased taxes on businesses. New fees – including those on driver’s licenses and vehicle registration – also go into effect.
I did not vote for any of these new taxes that will impact all Minnesotans – even our state’s lowest earners.
Income taxes
The new 9.85 percent rate on the state’s high-income earners impacts:
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married people who file jointly with a taxable income of more than $250,000;
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married people who file separately with a taxable income of over $125,000;
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heads of household with a taxable income of over $200,000; and
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single filers making over $150,000.
Sales taxes
Taxes on a pack of cigarettes rose by $1.60 (from the current $1.23 to $2.83).
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Other tobacco products will also be taxed at higher rates, including taxing “little cigars” as cigarettes and taxing each container of “moist snuff” at the same rate as a pack of cigarettes or 95 percent of the wholesale sales price, whichever is higher.
Vikings stadium bailout
Part of the revenue from the first year of the cigarette tax increase will be used to make up for the failure of electronic pulltabs to meet revenue projections to fund the state’s commitment to a new Minnesota Vikings stadium.
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To prevent retailers and wholesalers from stockpiling product before that date, a one-time new cigarette tax equal to the tax increase will be imposed on current inventories. That is expected to raise $32.4 million, of which $26.5 million will go to the special fund used for the stadium.
Online taxes
A sales tax also was added for online purchases such as ringtone downloads, music, videos, books and online computer games.
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Digital textbooks required for college courses will receive exemptions.
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Additional revenue for the stadium, if needed, will come from corporate tax increases on revenue from sales in the state.
Business taxes
Businesses will pay new sales taxes on warehousing and storage (not including mini-storage); electronic and commercial equipment repair and maintenance; and through repealing the current sales tax exemption on telecommunications equipment purchases.
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The warehousing and storage services taxes have received wide criticism because they would make our state less competitive in the business world.
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Look for these taxes to result in higher costs for all consumers.
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Those taxes will not be implemented until April 1, 2014.
DMV fees
New fee increases are in place on driver’s licenses and vehicle registration.
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The option of a $5 wheelage tax has been expanded to include all 87 counties in Minnesota, with the amount increased to $10 in 2014, followed by up to $20 beginning in 2018.
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New law also increases a flat amount charged for some older model collector vehicles (from $90 to $150).
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Starting in 2017, fees for new vehicle titles will increase from $6.25 to $8.25, while a $5.50 title transfer fee is eliminated.
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The filing fee for a new or renewed driver’s license or state identification card is increased from $5 to $8.
Sincerely,
Mark