With last week's March 31st deadline we worked diligently to finalize and pass budget bills through their committees. Last Thursday we passed our tax bill, which will provide $1.35 billion in tax relief for middle class Minnesotans. Our permanent tax provisions will help Minnesotans across generations, as well as farmers and small businesses owners.
Specific provisions of the tax bill include:
$269 million in tax relief for Minnesota’s senior citizens, by increasing the income limit at which social security income is taxable. As a result, by 2019 nearly 284,000 senior citizens would be eligible to receive a tax exemption on their social security benefits, saving them an average of $710 per year on their state taxes.
More than $125 million to address college affordability through a first-in-the-nation tax credit for student loan payments, along with subtractions and credits for families saving for college using 529 Savings Plans. Through the Student Debt Tax Credit, 77,500 students will receive on average a $640 reduction in their taxes.
$203 million in relief for hometown businesses by exempting the first $200,000 in commercial property value from the extra tax on businesses and freezing its automatic inflator. This helps every business owner reinvest in their business, protecting 30,000 Minnesota jobs.
$42 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers will receive property tax relief to reduce their disproportionate share of school district debt service. This applies to all school bonding levies currently existing and future levies. Farms will also benefit from a measure that conforms the state death tax to the federal exclusion.
This bill passed with a bipartisan vote of 80-52.
Remember, lower and competitive taxes and regulations will always lead to higher tax revenues. We must acknowledge that we exist in a national and global competitive economy. When states over-tax and over-regulate, it becomes difficult for wealthy individuals to expand their businesses and some may even leave Minnesota for a lower taxed state or foreign nation, taking their jobs with them. Even the Dayton family trust is located in lower taxed South Dakota, according to published reports.