Conferred tax bill passes House and moves to Senate

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A Republican proposal to provide tax relief to state businesses passed the House 75-57, with DFLers characterizing it as “uberpartisan,” and that education would get the short shrift because of how the relief would be funded.

When HF2337*/ SF1972 left the House floor for conference committee, it contained a provision to phase out the state property tax levy paid by business owners and seasonal/recreational property owners. The gap in the state coffers would have been filled by reducing the renters property tax credit.

A compromise between House and Senate conferees eliminated the provision and opted for the bill’s new credits to be paid by canceling approximately $43.5 million to the General Fund from the budget reserve account. It also changed the phase-out to freezing the base amount.

Sponsored by Rep. Greg Davids (R-Preston) and Sen. Julianne Ortman (R-Chanhassen), the bill awaits Senate action.

There are several other provisions in the bill directed toward tax relief and grant aid for Minnesota businesses — a session priority for Republicans.

They include:

  • an upfront sales tax exemption on capital equipment purchases for all small businesses;
  • increasing the angel investment credit by $5 million, with special emphasis on Greater Minnesota projects;
  • increasing the research and development tax credit by 24 percent for Minnesota companies; and
  • providing for a veterans jobs tax credit.

DFLers positioned the bill as Republicans putting the state’s businesses at the front of the line when it comes to property tax relief.

“This is an anti-education bill, putting businesses ahead of education,” said Rep. Mindy Greiling (DFL-Roseville). She pointed to the $2 billion the state owes the schools from previous efforts to help balance the state budget. “When we have that kind of debt to students that we say are our top priority, I don’t think it behooves us to be Santa Claus to businesses.”

Rep. Ann Lenczewski (DFL-Bloomington) called the bill “uberpartisanship.”

“When I hear it is an uberpartisan bill, it is such nonsense,” Davids countered as he pointed to DFL-sponsored provisions included in the bill. “I don’t play partisan games.”

Other tax relief provisions include freezing local government aid at 2012 levels and targeted tax relief for homeowners equal to 90 percent to any tax increase over 12 percent for pay 2012 only.