ST. PAUL – The House on Thursday approved a bill providing $1.35 billion in tax relief over the next two years, including a $270 million reduction on the state Social Security income tax.
It is the first House omnibus finance bill to receive a floor vote this session, something Rep. Dean Urdahl, R-Acton Township, said underscores tax relief as a top priority for the Republican majority. The House’s proposed tax reform in H.F. 4 is larger than plans offered by either the Senate or Gov. Mark Dayton.
“The tax relief for seniors is a key component in this bill and there are a lot of other important provisions as well,” Urdahl said. “The main thing is the House majority is committed to putting money back in the pockets of overtaxed Minnesotans. This bill helps us do that, with reductions for families who use child care, farmers, Main Street businesses, college students and others.”
Other 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.
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 and freezing its automatic inflator.
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.
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.