Tax reform could go to commission

Minnesota’s complicated tax structure lacks transparency and is in need of reform, according to Rep. Jenifer Loon (R-Eden Prairie), who proposes a commission with the goal of simplifying the code and making it more fair and equitable to all Minnesotans.

While there have been several attempts to overhaul the tax system, Loon thinks her approach would actually spur change because the commission would be directly accountable to the Legislature.

HF1822, which Loon sponsors, calls for a 15-member commission with three members appointed by the governor and six each from the House and Senate. It would include legislators, executive branch members and private citizens. The commission would be charged with evaluating the state’ tax system and presenting recommendations to the Legislature by March 1, 2013. A draft bill implementing changes would then be ready for introduction in the 2014 session.

“Our tax structure is very discouraging to businesses,” Loon told the House Taxes Committee, noting many studies point to the state not being competitive with its tax structure. The need for change is clear, she said.

The bill was held over Feb. 9 for possible omnibus bill inclusion.

According to a Department of Revenue fiscal analysis, staffing costs and per diem for the one-year commission would range anywhere from $141,000 to $889,000 depending on office space, number and type of staff and outside consulting services.

Rep. Melissa Hortman (DFL-Brooklyn Park) said the responsibility for studying tax policy belongs with the tax committee and this could be a duplication of effort.

Rep. Diane Loeffler (DFL-Mpls) agreed, adding that many times legislative reports end up sitting on a library shelf and are not acted upon.

Representatives from the Minnesota Chamber of Commerce and the Minnesota Business Partnership spoke in favor of the bill.

The companion, SF1712, sponsored by Sen. Gretchen Hoffman (R-Vergas), awaits action by the Senate State Government Innovation and Veterans Committee.