With a $900 million surplus, businesses sought meaningful tax relief to improve the competitiveness of Minnesota businesses. The total tax bill passed is valued at $257 million in FY 16/17 and $544 million in FY 18/19. Tax relief comprises $179 million FY 16/17 and $375 million in FY 18/19. The rest of the tax bill was spending increases.
Why was removal of the business property tax inflator not included in final tax bill?
Sen. David Hann, (R-District 48)
"The removal of the statewide business property tax inflator was not included in the final tax bill this year because the Senate DFL majority did not want to give up the revenue stream from that tax. In place of that removal, the bill exempted the first $100,000 of property value from being subject to the state wide property tax. While this is no doubt helpful, it does not address the fundamental need to diminish or eliminate the burden the statewide property tax places on Minnesota businesses. This is a particularly egregious element of our state tax climate that continues to negatively affect our ability to attract and retain investment in our state."
Sen. Ann Rest, (D-District 45)
“I was the chief author of the bill to repeal the inflator and disappointed it was not included in the tax bill. It is much better tax policy than the $100 thousand exclusion of market value that passed—that provision will have diminishing significance in years to come with no change in the inflator. I support Governor Dayton's objection to reducing tobacco taxes that the House Majority insisted on. Those dollars could certainly have been much better spent lowering taxes elsewhere, including reducing the statewide business levy in a more meaningful way. I am pleased that the Angel Investment Credit was funded for $10 million in 2017, the Section 179 carryforward was extended, residency factors were updated and that Unemployment insurance taxes are reduced by some $258 million.”