Includes provisions for families, seniors, farmers, Main Street businesses and Northwest Minnesota
ST. PAUL – On a bipartisan vote of 80-52 the Minnesota House of Representatives has approved a plan that provides $1.35 billion in tax relief to middle-class Minnesotans.
“This comprehensive tax relief package will put money back in the pockets of hardworking Minnesotans who funded our state’s substantial $1.65 billion surplus,” said Rep. Deb Kiel, R-Crookston. “There are also provisions in the bill specifically for our area including money to help our border communities compete with cities across the river and the local option sales tax for East Grand Forks. Families, seniors, farmers and Main Street businesses will all benefit from this legislation, and I am pleased we are once again advancing a meaningful, middle-class tax relief bill.”
“Our tax bill prioritizes middle-class Minnesotans and the taxpayers of our state,” said Rep. Dan Fabian, R-Roseau. “Families with childcare expenses, farmers and ag landowners, Minnesotans with student loan debt, and seniors living on a fixed income will all see meaningful tax relief with this bill. What’s more, also included are provisions I spearheaded for Digi-Key’s expansion which will help a hometown business create an estimated 1,000 new jobs and strengthen our local economy.”
Highlights of the bill include:
- $269 million in relief for Minnesota’s senior citizens by increasing the income limit at which social security income is taxable. Under current law, seniors making less than $32,000 for a married couple or $25,000 for an individual must pay taxes on social security income. With House Republicans’ proposal, that threshold would increase to $61,000 for a married couple and $46,500 for a single filer in tax year and $72,000 for a married couple and $56,000 for a single filer in 2019. As a result, by 2019 nearly 284,000 senior citizen tax returns (single and married filing jointly) would be eligible to receive a tax exemption on their social security benefits with an average tax reduction of $710.
- More than $125 million to address college affordability through a first-in-the-nation tax credit for student loan payments, along with subtractions and credits for families saving for college using 529 Savings Plans. Through the student debt tax credit, 77,500 students will receive on average a $640 reduction in their taxes.
- $42 million in relief for farmers by reducing the burden farmers and agriculture land owners pay for school bond referendums. Approximately 240,000 farmers could receive property tax relief to reduce their disproportionate share of school district debt service. Farms will also benefit from a measure conforming the state death tax to the federal exclusion.
- $35 million for families with young children by modifying the child & dependent care credit. A family of four earning $50,000 a year will receive an additional $1,200 toward their childcare expenses.
- $203 million in relief for hometown businesses by exempting the first $200,000 in property value from the extra tax on businesses and freezing its automatic inflator. This helps every business owner reinvest in their business, protecting 30,000 Minnesota jobs.
- $100 million in direct property tax relief for homeowners and renters.
- Full funding for Local Government Aid/County Program Aid at current levels.
The Minnesota Senate is expected to pass a tax relief proposal of their own in coming weeks. Once both bills are passed, a conference committee is expected to reconcile differences before a final tax relief bill is re-passed by the House and Senate and sent to Governor Dayton.