ST. PAUL – The Minnesota House on Thursday approved a bill providing $1.35 billion in tax relief and a provision Rep. Matt Bliss, R-Pennington, authored to help get the most out of broadband grants.
The headline feature for tax relief in the bill is $270 million to reduce the state tax on Social Security income.
“Tax relief is one of the things I am most focused on in the House and this proposal is a good start in the process of lessening the load on Minnesotans,” Bliss said. “One of the best parts of this bill is that it would provide some relief for seniors. It just seems wrong that Minnesota is one of just a very few states that fully taxes Social Security income. The House majority has been talking about doing things the Minnesota Way this session and one of the best places to start would be by doing what’s right for our seniors.”
The measure Bliss authored to increase the effectiveness of broadband grants would expand the sales tax exemption for telecommunications equipment to include wire, cable, fiber, poles, and conduit for telecommunications services.
Bliss said Paul Bunyan Communications, for example, would have saved an estimated $200,000 last year alone and been able to put that money toward expanding broadband in our region if not for state sales taxes being skimmed off the top.
“If the state is going to issue grants for the purpose of expanding broadband, then let’s keep those grant dollars on the project,” Bliss said. “It makes no sense for the state to issue broadband awards only to turn around and collect sales taxes on materials purchased to complete the work. We’re better off letting the grant winners use that award money to serve more people, not government.”
Other tax relief provisions in the bill include one that would benefit middle-class families with $35 million going toward modifying the child and dependent care credit. A family of four with childcare expenses would be estimated to receive $660 in relief.
More than $125 million would go toward addressing college affordability. Families saving for college using 529 Savings Plans will benefit from expanded subtractions and credits. In addition, 77,500 students will receive, on average, a $640 reduction in their taxes through a first-in-the-nation tax credit for student loan payments.
Hometown businesses would see $203 million to reduce the extra state property tax on businesses, exempting the first $200,000 in property value from the extra tax on businesses.
Farmers also would receive significant relief, with $42 million to reduce the burden agriculture land owners pay for school bond referendums. Farms also would benefit from a measure conforming the state death tax to the federal exclusion.
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