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Minnesota Legislature

New Law: Tax bill gets support

Published (7/15/2011)
By Lee Ann Schutz
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Despite the word “taxes” in its title, the omnibus tax policy law received bipartisan support in the Legislature, and was signed into law by Gov. Mark Dayton.

Sponsored by Rep. Greg Davids (R-Preston) and Sen. Julianne Ortman (R-Chanhassen), the law contains mainly noncontroversial tax policy provisions, many put forward by the Revenue Department.

Tax treatment for those raising horses prompted concerns in the House Taxes Committee as well as on the House floor. Over the years, there has been confusion for some over how to differentiate in the tax code those who have horses as a hobby, and those who use them as part of an agricultural business. While a provision in the House language would have allowed more equine-related enterprises to be classified as agricultural, this was removed by amendment in the Senate.

The law addresses some tax increment financing changes and modifications for the cities of Ramsey, Lino Lakes, Cohasset and Sauk Rapids. It also extends the ability to use TIF for market-rate housing developments to July 31, 2012, for projects that begin before Jan. 1, 2012.

Other provisions in the law include:

• modifying a 2010 law related to owner-occupied resorts to provide that two such properties located in the same town can be combined for tax purposes if they are each owned by different limited liability companies, as long as they have the same membership;

• defining of the word “interns” for use in the angel investment credit program and setting an intern minimum wage requirement. This provision is retroactive to Jan. 1, 2011;

• expanding the definition of “agricultural products” to include the production for sale of game birds and waterfowl by a Department of Natural Resources-licensed game farm, provided that at least 500 birds were raised or used for breeding stock on the property during the year; and

• agricultural land that is owned, and used for the purposes of a homestead by an individual who is a shareholder, member, or partner of the corporation, venture, company or partnership is entitled to receive the first tier homestead class rate, under certain conditions.

HF1219*/ SF869/CH112

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