ST. PAUL – On a bipartisan vote of 80-52 the Minnesota House of Representatives has approved a plan that provides $1.35 billion in tax relief to middle-class Minnesotans.
“When I look at our budget surplus, I see that Minnesotans are being overtaxed and need relief,” said Rep. Jim Nash, R-Waconia. “Our $1.35 billion relief bill passed today because it’s what our small business owners, farmers, and senior citizens want and need.”
Highlights of the bill include:
$269 million in relief for Minnesota’s senior citizens by increasing the income limit at which social security income is taxable. Under current law, seniors making less than $32,000 for a married couple or $25,000 for an individual must pay taxes on social security income. With House Republicans’ proposal, that threshold would increase to $61,000 for a married couple and $46,500 for a single filer in tax year and $72,000 for a married couple and $56,000 for a single filer in 2019. As a result, by 2019 nearly 284,000 senior citizen tax returns (single and married filing jointly) would be eligible to receive a tax exemption on their social security benefits with an average tax reduction of $710.
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.
$42 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers could receive property tax relief to reduce their disproportionate share of school district debt service. Farms will also benefit from a measure conforming the state death tax to the federal exclusion.
$35 million for families with young children by modifying the child & dependent care credit. A family of four earning $50,000 a year will receive an additional $1,200 toward their childcare expenses.
$203 million in relief for hometown businesses by exempting the first $200,000 in 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.
$100 million in direct property tax relief for homeowners and renters.
Full funding for Local Government Aid/County Program Aid at current levels.
The Minnesota Senate is expected to pass a tax relief proposal of their own in coming weeks. Once both bills are passed, a conference committee is expected to reconcile differences before a final tax relief bill is re-passed by the House and Senate and sent to Governor Dayton.
“It’s a good, strong bill and I’m looking forward to working with the governor and my Senate counterparts on a compromise,” House Tax Chair Greg Davids, R-Preston.