House Taxes Committee Chairman Rep. Greg Davids (R-Preston) unveiled components of his $80 million property tax relief bill, which he plans to introduce during the 2012 legislative session. Besides providing relief to both homeowners and those owning business property, it “begins the 20-year phase” out of the statewide general tax beginning in fiscal year 2013.
“Our caucus is pushing this as the top-tier priority for the Legislature,” he said, expecting that the measures will help make Minnesota more business-friendly.
“The cost of doing business in Minnesota is extremely high,” said Rep. Jenifer Loon (R-Eden Prairie), the committee’s vice chairwoman. “This is a very good step in the right direction for businesses.”
Over the next few weeks, truth-in-taxation property tax statements should be hitting mailboxes. While each locality differs, many homeowners and businesses, especially in Greater Minnesota, could see their property taxes increase because of the elimination of the market value homestead credit.
Davids said his bill is not a direct response to this, but an enhancement to last year’s reforms.
Homeowners who experience “abnormal increases” in their property taxes, would get relief, he said. Under his proposal, eligible homeowners who see their local property taxes rise by 12 percent or more in tax year 2012, could see their maximum refund increase from 60 percent to 90 percent.
The business property tax package is directed toward small business to exclude the first $100,000 in the value of commercial/industrial property from statewide property tax. Greater Minnesota businesses could benefit the most with an approximate 18 percent cut, while metro area properties would benefit from a 4 percent reduction in their taxes.
The proposal would not affect local government funding or property tax calculations, according to David’s press release, but it would freeze the statewide property tax levy.