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Property and local tax omnibus bill advances, minus the moratorium

When the final report from the House Property and Local Tax Division was unveiled Monday, a key element was a two-year moratorium on new proposals for local option sales taxes (or LOST). But, before the division’s final report was approved Wednesday, that moratorium on LOST was lost.

As part of an amendment, the bill’s sponsor, Rep. Andrew Carlson (DFL-Bloomington), chose to remove the moratorium language so as not to tie the hands of next year’s Legislature should it choose to revisit the issue.

After approval of that amendment and two others, HF346 — replaced by a delete-all amendment — was approved. The bill’s next stop is the House Taxes Committee where it is expected to become part of an omnibus tax bill.

Of the two other amendments adopted, one would have the language in statute for homestead exemptions mirror that used for agricultural and residential exemptions. Another would make some land in Cass County owned by the Leech Lake Band of Ojibwe exempt from taxation, effective retroactively from 2019.

In asking to clarify that the moratorium language had been removed from the bill, Rep. John Petersburg (R-Waseca) said, “Allowing cities to work under the old framework makes sense. Shall we assume that we don’t have any projects that would qualify for this year?”

Carlson replied, “We are not recommending any new local sales taxes as part of the division report.”

In wrapping up the division’s work for the session, its Republican lead, Rep. Jerry Hertaus (R-Greenfield), said, “Many of us came to the session with high hopes for such things as reducing property taxes. But those hopes were dashed by the need to address COVID-19.”

A companion, SF473, sponsored by Sen. Melissa Wiklund (DFL-Bloomington), awaits action by the Senate Taxes Committee. 

The division was also presented with new numbers from nonpartisan House fiscal staff about how state tax refunds, aids and credits will be affected by the new budget projections released Tuesday. The only difference was an additional $11 million in tribal nations grants that were part of COVID-19-related legislation passed earlier this session.

 


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