ST. PAUL – The Minnesota House passed an omnibus tax bill Wednesday with benefits to families, dairy farmers and veterans.
The bill eliminates the so-called “marriage penalty,” which analysts estimate will save joint filers $56 million over the next two years. It also helps parents with children in school by removing the $2,000 cap on claiming the K-12 education credit.
“Eliminating the marriage penalty and removing the K-12 cap I think shows families that we encourage them to invest in their children’s future and sends the message we don’t think a higher tax burden is in anybody’s best interest,” said State Representative Dean Urdahl, R-Grove City.
Urdahl authored the major agricultural provision in the bill to award dairy producers with income tax credits for improvements they make to their dairy operations. The bill would allow up to $75,000 in credits on individual income taxes for producers who build new barns; fences; water and feed facilities; milking operations; and milk storage facilities. The credit could be taken all at once or over a 15-year span.
“Supporting our dairy industry is one of my top priorities in the legislature. I authored several dairy incentives in the past and I will continue to push for them in the future. Encouraging such an important part of the rural economy is something that I and most legislators take very seriously,” Rep. Urdahl said. The tax credit plan is part of Governor Tim Pawlenty’s agriculture development plan released in January.
Active military service members and veterans also stand to see significant benefits under the House tax bill. Minnesota National Guard members would see their income earned on active duty within the state exempt from tax, disabled veterans and their spouses receive property tax exemptions, and TRICARE payments received would be exempt from the MinnesotaCare Tax. The bill also creates a tax check off for Minnesotans to donate a portion of their tax rebates to National Guard members and their families who have suffered financial difficulty as a result of being called to active service since September 11, 2001.
The bill’s other highlights include:
• Income tax deductions for contributions to Health Savings Accounts
• Creating the Taxpayer Satisfaction Survey to give property owners and local voters a voice in their local tax decisions
• Extending the Limited Market Value for two years to help offset rising local property taxes
• The sales tax exemption of all medicines as part of the SSTA
• Dairy investment credits to boost dairy expansions in Greater Minnesota House of Representatives