St Paul, Minnesota — Today, the Minnesota House passed tax cuts for more than one million middle class families and the repeal of business-to-business taxes. House passage sends the bill to Governor Dayton to be signed into law. State Representative Mary Sawatzky (DFL – Willmar) voted for the bill.
“Minnesotans across the state are filing their taxes right now, making today’s quick passage of this bill incredibly important,” said Rep. Sawatzky. “It’s good news for the people of Minnesota that we were able to quickly get this bill to Governor Dayton. We’re continuing to build on Minnesota’s strong economic momentum and to expand opportunity and grow our middle class.”
Last session the House included federal tax conformity for tax year 2013 and beyond, but it did not end up in the final budget signed into law. More than one million middle-class Minnesotans will see $225 million in tax cuts due to federal conformity and boosting the state’s Working Family Credit. The tax cuts through federal conformity include:
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$111 million for middle income married families by eliminating the “marriage penalty”
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650,000 families will see an average tax decrease of $115
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The vast majority of families claiming the standard deduction make less than $75,000
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$36 million for low income working families by matching the state’s Working Family Credit with the federal Earned Income Tax Credit (EITC)
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54,000 working families will see an average tax decrease of $300
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$7.2 million for homeowners that refinanced or had a short sale
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$3.9 million for new homeowners through deduction of mortgage insurance premiums
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80,000 new homeowners will see an average tax cut of $60
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$26.4 million for students and parents paying for college and students paying off loans
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$1.9 million for Minnesota families with dependents
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26,000 families with household incomes below $38,570 will see a $80 tax decrease
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$400,000 for adopting parents who receive adoption assistance from employers
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$1.1 million for 60,0000 teachers with the classroom expense deduction for educators
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$4 million for charitable contributions
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$6.7 million for businesses - to make tax filing simpler for businesses
(Source: Non-partisan House Research)
The bill increases the Working Family Credit above and beyond federal conformity, providing a total of $66.2 million in tax cuts to 331,000 claimants earning less than $49,103. The average family will see a $146 tax cut through this expansion of the Working Family Credit.
The final bill also repeals three business-to-business taxes on warehousing and storage services, commercial equipment repair (including farm machinery) and telecommunications equipment. Rep. Sawatzky was a co-author of legislation repealing these taxes.
“Thanks to our growing economy and surplus, we can repeal these business-to-business taxes in a fiscally responsible manner,” said Rep. Sawatzky. “I’m pleased we were able to work together and repeal these taxes today.”
If taxpayers have not filed their tax return, the Department of Revenue is asking that taxpayers wait until Monday to file. If they have already filed, the Department of Revenue will examine the return to see if they qualify for these tax cuts and notify them if they need more information or if they need to file an amended return.
Rep. Sawatzky encourages constituents to contact her with any questions, comments, concerns, or ideas. Rep. Sawatzky can be reached by phone at 651-296-6206 or by email at rep.mary.sawatzky@house.mn. Constituents can also visit Rep. Sawatzky’s AreaVoices blog, legislative page and sign up for email updates.