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Legislative News and Views - Rep. Steve Drazkowski (R)

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Friday, February 20, 2015

This week, the Minnesota House Property Tax and Local Government Finance Division debated legislation that’s designed to ease the burden of overtaxed Minnesota small business owners.

Specifically, the bills would repeal portions, if not all of Minnesota’s statewide property tax.

The program began in 2001 as a “temporary” tax, and is implemented on all commercial and industrial businesses, as well as seasonal recreation properties across Minnesota. Business owners find this tax as a line item in their regular property tax statement. Local government sees no proceeds from the tax as all revenue is sent to Minnesota’s General Fund and costs business owners $1.7 billion each biennium.

This tax has been extremely burdensome on Minnesota’s small business owners, particularly those trying to make a living in our rural areas. In many cases, it is responsible for 25 to 40 percent of the business person’s property tax bill.

To address this issue, I am sponsoring legislation that would repeal the statewide property tax over six years by eliminating ten percent of collections in both the first and second years, then removing 20 percent each year thereafter. It would also repeal the $20 million general education levy phased in on property taxes by the previous legislature.

Another bill was heard that would create an exclusion for the first $150,000 of a businesses’ value and repeal that portion of the tax, which would serve as a good first step and help Minnesota's smallest businesses most.

Also problematic with the statewide property tax is the inflator clause that automatically increases the financial burdens on business owners each year, which is why another proposal has been introduced to stop the autopilot increases the law applies to this onerous tax.

The Main Street mom-and-pop business owners are truly the people we are trying to help with these repeal efforts. The tax is unnecessary and was supposed to be temporary, so it's time to set an end date and help Minnesota's small businesses strengthen their competitive and economic positions.

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