Archived Story

Middle-class tax relief declared ‘a top priority’

Published 10:33am Tuesday, February 25, 2014

By Bill Salisbury

Pioneer Press

ST. PAUL — The House Tax Committee will get off to a quick start when the Minnesota Legislature convenes Tuesday with a hearing on 26 bills that focus primarily on middle-class income-tax relief and repealing three new business sales taxes.

Now that the state has a balanced budget, a growing economy and an expected budget surplus, “middle-class tax cuts will again be a top priority,” House Tax Chair Ann Lenczewski, DFL-Bloomington, said in a news release.

Lenczewski and Rep. Greg Davids of Preston, the lead Republican on the Tax Committee, are sponsoring bills that would make Minnesota tax law conform to federal income tax cuts that Congress passed in 2012.

“I’ve always been a very big supporter of conforming just for… making sure hard-working Minnesotans keep more of their own money and for the convenience of not having to file two different returns,” Davids said at a Capitol news conference Monday.

Filing income tax returns will be more complicated and expensive for Minnesotans this year if the Legislature doesn’t match the federal changes.

Conforming would eliminate the so-called “marriage penalty” that imposes higher rates on married couples filing jointly.

It also would increase a working-family credit, stop taxing employer-paid education and adoption assistance and stop taxing housing debt relief as income.

Davids said his bill would save state taxpayers $273 million this year and continue the tax breaks in the future.

He called for quick action so Minnesotans can file their tax returns and collect refunds before the April 15 deadline.

The House passed a federal tax conformity bill last year, but senators rejected it in a House-Senate conference committee. The Senate Tax Committee has not yet scheduled hearings on a conformity bill and measures to repeal three business-to-business taxes enacted last year.

Scrapping the new sales taxes on business equipment repairs, telecommunications equipment purchases and warehousing services is a priority for Gov. Mark Dayton, House Democrats and Republicans in both chambers. But Senate Democratic leaders say they want to make sure the state can avoid future budget deficits first.


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