Proposed Tax Breaks for Minnesota Businesses and Farmers

Published On: 30th April 2015

From the internet

The Minnesota GOP has proposed business income tax breaks that could also benefit farmers. Their goal is to provide these taxpayers with over $2 billion in relief, which includes a personal exemption for every filer that they could claim for just two years.

The proposal by the GOP could be a difficult to achieve, as there are many Democrats that do not want more tax cuts after the state has achieved firm fiscal footing. The architects of the proposed tax breaks say that the state is going to possibly see a $1.8 billion surplus and they want to pass some of the money on to the people.

One Republican said it comes down to giving the people a choice about how they spend their money rather than possibly using the money for bigger government.

Some tax savings have been put in place, such as credits for education expenses, student loan paybacks, and elderly and childcare costs. A new $1,000 per person exemption has been proposed that would reduce the tax liabilities for every filer and that would cost the state $539 million. But the exemption would only last or two years and that would be it.

One representative said a family of four could see $500 in savings over a two year period just because of the personal exemption, although the exact amount would depend on earnings and what other relief they are able to claim.

Other tax breaks are smaller, but they do ramp up over time. For instance, a provision that would enable filers to subtract their social security income would be phased-in gradually until all of the money would be exempt in 2019. The cost to the state will be $379 million. This is great news for those that are and will be retiring.

For businesses, the plan would phase out the state tax on industrial and commercial property. It would take six years for this to occur, but businesses would receive an exemption on the first $500,000 in the first year. A similar plan could be in place for recreational property in which the first $250,000 would be exempt.

It is said that Democrats will make a smaller proposal that would cost the state less, but that there would still be property tax relief for business owners in that proposal.

One of the reasons why Democrats feel the plan needs to be redone is because they say people are receiving much less in state income tax breaks than businesses are under the current proposal.

Many questions have come about regarding these tax cuts, as individuals and businesses are curious to know how the cuts will affect them and how much their overall income taxes will be reduced in the future