- Lowering the sales tax rate from 6.875% to 6%
- Broadening the base from sales taxes to include clothing, over-the-counter drugs, and a wide-range of personal services
- Increase cigarette taxes by $.94 per pack
- Lowers the corporate income tax from 9.9% to 9%
- Lifts the sales tax on capital equipment purchases and enhances research & development credits, along with the 'angel' investment business credit
- Places a 13% wholesale tax on sports memorabilia
- Requires online retailers such as Amazon to start collecting sales taxes
- Raises the top income tax rate to 9.4% from 7.85% on taxable income of $80,000 or more for singles; $141,000 for couples
Taxable services would include:
- Haircuts
- Tattoos
- Auto & furniture repairs
- Digital downloads
- Computer software
- Admissions to boat & trade shows & professional sports events
The bill also included special breaks for private businesses, property owners, & cities & counties:
- $125 Million to aid state & local governments to buy down property taxes
- Exempt cities & counties from sales taxes
- Offering tax incentives to promote expansion for 3M, Baxter Healthcare Group, and the Mall of America
- $327 Million in state aid for the expansion of the Mayo Clinic in Rochester
The details of the bill will have to be worked out with the House. Then, onto Govenor Dayton's desk for his signature. At this moment, one does not know what the final make-up of the taxes on Minnesota citizens will be. What we do know is that the DFL (Democrat-Farmer-Labor) party is insistent on raising taxes on Minnesotans.
In an economy that is producing anemic growth, any tax increase could put us back into recession. The idea of decreasing incentives (raising taxes) on those that produce and make the economy grow, one has to wonder why they would do it. One answer is that there is a segment of the populace that actually thinks the government is the economy. Actually, it is the corner dry cleaner, the self-employed electrician, bicycle repair shop, etc. These are the people that take risk and work to grow an enterprise. The economy is not a government bureau. Nor is it the Department of Education.
We will be monitoring the tax bill as it makes it way through the committees and the final product is presented to Governor Dayton for him to sign.
Source: St. Paul Pioneer Press
