Category Archives: Taxes

Sen. Westrom: Hold Filing Taxes Until April 3rd

Friends,

As many of you know the Minnesota Legislature passed several tax cuts earlier this month. This has lead to many questions regarding the status of your tax return. Since some of these cuts were retroactive many qualify for payment for this upcoming tax return.

Commissioner Myron Frans has asked that folks filing their tax returns hold off until the 3rd of April to let his department process the change in law. Additionally Commissioner Frans has stated that the Revenue Department will contact those who have already filed if they are eligible for an even larger refund. However, that will take some time, possibly months. Frans as well stated that those who have already filed do not need to submit an amended return. Instead, they will just be sent a check.

First and foremost if you have any questions I suggest you contact the Department of Revenue at 1-800-652-9094. If you have any other questions or concerns feel free to contact my office at 651-296-3826 or at sen.torrey.westrom@senate.mn.

Thanks,

Senator Torrey Westrom

District 12
107 State Office Building
St. Paul, MN 55155
(651) 296-3826
(855) 407-7386

Minnesota One of the Worst Tax Climate States

Dear Friends:

The non-partisan Tax Foundation recently released the 2014 edition of the State Business Tax Climate Index which ranks Minnesota in the bottom ten states that suffer from “complex, non-neutral taxes with comparatively high rates.” Minnesota dropped from 45th to 47th place on their list. That is not the right direction. According to the report, Minnesota “enacted a package of tax changes that reduce the state’s competitiveness.” The new taxes include a new sales tax on personal vehicle repairs, farm equipment repairs, and a retroactive hike in the individual income tax rate. You can find the full report here: http://tinyurl.com/qg4j64d.

Governor Mark Dayton and the Democrats’ 2013 all tax budget can take most of the credit for this and will take more from hard working Minnesota families by implementing new taxes and failing to conform to some federal tax codes.

 Some examples of these new taxes include:

 Farmers Tax: Farmers and all consumers will be affected by the new sales taxes on warehousing and storage. Items such as propane, fertilizer, groceries, etc… may be affected by this tax.

Small Business Tax: This tax imposes new “Business to Business” sales taxes of $314 million over FY 2014-15 through a sales tax expansion including warehousing and storage, electronic and precision equipment repair, and commercial and industrial machinery and equipment repair.

 Tax on Rural Broadband and Cellular Services: Cable, telephone, and cellular companies must now add a sales tax on routers, switches, amplifiers, and digital processors that they purchase. Former DFL Speaker of the House Margaret Anderson Kelliher has even expressed concerns over these new taxes. There “will be slower adoption of high-speed Internet in outstate Minnesota,” stated Kelliher and that this new tax is a “step backward.”

Motorist (Wheelage) Tax: Under current law, metropolitan counties can collect $5 on every vehicle, per year. Under a new law passed last session, counties are allowed to collect $10 from 2014-2016 and up to $20 thereafter on every vehicle your family owns.

Adoption Tax Credit: On your federal taxes, families adopting a child may exclude up to $12,970 in employer-provided adoption benefits. On your state taxes, there is no longer a credit for adopting a child. Your family will now pay more when going through the adoption process.

Marriage Penalty: As estimated, 650,000 Minnesota families will pay on average $120 more per year in taxes after the Democrats defeated a Republican amendment to fix this problem. Marriage penalties occur when a family filing jointly would enter a higher bracket than if they had filed separately.

We know that higher taxes don’t lead to a healthier economy. Regular session starts again in February and the bottom line is that before we take another dime from hardworking Minnesota families, we should go line-by-line through the budget and cut the wasteful spending. These taxes are increasing costs for hardworking taxpayers while padding the coffers of the state to spend tax dollars on wasteful and ineffective programs. A better way to a strong, healthy Minnesota economy is to promote economic growth, and defund and remove wasteful government.

Please do not hesitate to contact me if you have any questions or comments. I can be reached by telephone at (651) 296-3826 or (855) 407-7386, by e-mail at sen.torrey.westrom@senate.mn, or via mail at 107 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155.

Sincerely,

Senator Torrey Westrom

District 12
107 State Office Building
St. Paul, MN 55155
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Mary Franson on Dayton’s statement to repeal farm equipment repair tax:

“I’m encouraged to hear that Governor Dayton and Democrat legislators have finally accepted the reality that the farm equipment repair tax they imposed and hastily passed during the last hours of session would be devastating to hard-working Minnesota farmers,” said Franson. “I’ve heard from farmers throughout my district who were deeply concerned about the disastrous impact this tax would have on their livelihood. I’m happy I can now tell them this tax is likely to be repealed in special session.”

Read more.

Rep. Paul Anderson on Property Taxes

Monday, August 5, 2013

A newspaper headline this past week declaring that “property taxes could drop” in Minnesota made for interesting reading. Although the figure mentioned, $121 million for next year, was only an estimate, my initial reaction was, “Yes, they should go down, because other taxes are going up.”

Keep in mind that property taxes are set by local governments, such as counties, cities and townships, school districts and other local units such as watershed or hospital districts. Members of those governing boards study their individual situations and determine the level of funding necessary to operate their entity for the coming year. Then they set their levy, and the taxes are collected the following year based on the value of residents’ real property that lies within each taxing entity. Money from the state, mainly in the form of Local Government Aid (LGA), has long been used by cities and counties to help balance their budgets without relying entirely on local property taxes.

With the state facing financially difficult times in recent years, the amount of LGA received by local units of government has gone down. That, however, will be changing next year. Funded by the recently-passed $2 billion tax increase at the state level, this state aid will increase by $80 million for cities in Minnesota and by $40 million for counties. Townships are also due for some of this state money as they will receive $10 million annually, starting in 2014.

But that’s not all. Also passed in the recently-completed legislative session was an exemption for cities and counties from paying the state sales tax on most purchases. According to figures from the Department of Revenue, that should result in a savings to those local units of approximately $172 million. I carried a bill giving cities and counties that tax break, but I was surprised they received both the large increase in LGA and the sales tax exemption.

Homestead credits were also expanded, and the property refunds that taxpayers receive directly from the state will also increase.

So, putting all those pieces together should result in lower property taxes. But, again, it’s up to local officials to determine what they will do with the increased state funding. Many have actually cut employees or programs in recent years in order to balance their budgets, so it’s going to be interesting to see how they handle this.

Also keep in mind that increases in state spending must be paid for. The sales tax extension on the labor portion of farm and other commercial repairs went into effect July 1. A new 4th tier income tax bracket goes into effect this year, giving Minnesota one of the highest tax rates in the nation. And a new tax on commercial storage is set to go into effect next April, although there is much discussion it will be repealed before it goes into effect. In addition, several other tax increases, ranging from car rentals to automobile registration, from digital downloads to satellite reception, and some internet sales, will be going into effect.