ST. PAUL – The Minnesota House approved an omnibus bill Wednesday including legislation to rectify a tax issue that has placed a major burden on many farmers and business owners, along with a $1.37 billion bonding package.
Minnesota’s lack of full compliance with federal Section 179 depreciation has had drastic tax implications in recent years, treating like-kind exchanges as income and resulting in massive state tax bills for many farmers and businesses that purchase capital equipment.
State Rep. Dean Urdahl, R-Acton Township, said constituents have contacted him after receiving letters from the state saying they owe thousands of dollars in additional income tax. Some have reported bills in the six-figure range.
“The Section 179 issue has been a major problem for farmers and other businesses who were completely caught off guard by this change in recent years,” Urdahl said. “People were being forced to pay thousands of dollars on their 2018 state taxes for a tax that didn’t even exist in 2018. I’m glad we were able to right this wrong for farmers and other business owners.”
A $1.37 billion capital investment package also was part of the bill, funding projects throughout the state. As the lead House Republican on bonding, Urdahl was instrumental in crafting the finished product which received broad, bipartisan support from the House as the omnibus bill passed 100-34.
“The people of Minnesota look to their legislators to lead and expect us to do what they sent us to the Capitol to do, even in the most challenging times,” Urdahl said. “That includes passing bonding bills to preserve our state’s assets, an obligation I take very seriously. We all want good roads and bridges, safe drinking water and to keep our buildings in good shape. While it might not be a perfect bill, that is the nature of divided powers in our government. We worked together to find common ground and the strong support the House provided is a testament to the results.”
Local projects included in the bill include $5 million for a wellness center in Litchfield, $3.1 million to restore Campbell Lake in Hutchinson and $1 million for work on the Dassel-Cokato field house floor.
The House approved the bill (H.F. 1) and adjourned from a fifth special session of the current interim late Wednesday evening. Urdahl said the Senate is expected to act on the package Thursday and, upon approval, send it to the governor for enactment.
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