State Senate passes tax bill, House action next
Minnesota lawmakers are finally on the verge of passing the tax cuts that most all of them support.
The state Senate passed its bill today by a vote of a 58-5 and sent it on to the House, where the debate will soon get underway. Senate Republicans eventually voted for the $432 million package of tax relief measure, but not before several failed attempts to take away some of the $150 million dedicated to the budget reserve.
Sen. Julianne Ortman, R-Chanhassen, tried to use some of that money to make a benefit to married couples retroactive to 2013 taxes. Ortman said family budgets should take priority over ahead the government budget.
“Let’s make sure our families can thrive first,” Ortman said. “That’s far more important. Government will always survive. Let’s make sure that we don’t imperil any more Minnesota families. Let’s get them the tax relief they’ve earned, that they expect and that they’ve overpaid. Give them back their money.”
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Senate Tax Chair Rod Skoe, DFL-Clearbrook, said state conformity on the marriage penalty will begin with 2014 taxes.
“This is a large number of filers, many of whom have already filed -- it’s unfortunate for this year,” Skoe said. “But I think it would have been a very hard thing to accomplish, and neither the House nor the governor supported this either because of the cumbersome nature of it.“
Skoe credited the state’s improving economy and a $1.2 billion budget surplus for allowing lawmakers to revisit some of the tax decisions made last year.
“We haven’t been in this good of shape since 1999,” he said.
In addition to the federal conformity measure, the Senate bill repeals the three business sales taxes passed last session. Republicans tried unsuccessfully to undo another provision in last year’s tax bill: the authorization of a new legislative office building. Senate Minority Leader David Hann, R-Eden Prairie, said the dispute between House and Senate Democrats over that project was the reason this year’s tax bill took so long.
“This building has been a albatross around the necks of this Legislature," he said. "It is preventing us from doing our business. It is a wasteful use of taxpayer money and it is not needed.”
The bill’s retroactive provisions include a mortgage insurance premiums deduction, an employer-provided adoption assistance exclusion, an employer-provided tuition assistance exclusion, a working family tax credit, a student loan interest deduction and a higher education tuition deduction.
The items delayed until 2014 taxes include the marriage penalty fix and the dependent care credit.
There is an increase in the Angel Investment Tax Credit, and elimination of the gift tax and adjustments in the estate tax.
Gov. Dayton said he’ll be standing by to quickly sign the bill as soon as it reaches his desk. The Department of Revenue is also standing by to begin implementing the law.