Dayton's Proposed Snowbird Tax Ruffling Feathers

Updated: 02/13/2013 7:10 AM By: Scott Theisen

One small part of Gov. Mark Dayton's budget proposal is ruffling the feathers of a lot of snowbirds.

Dayton wants to start taxing Minnesotans who spend the winter in warmer places. The proposal sparked a colorful editorial from a Florida congressman, which was published in a Florida newspaper on Sunday.

Right now, you have to pay Minnesota income taxes if you live in the state for at least six months out of the year. Dayton wants to lower that threshold to 60 days, meaning that if you live in Minnesota for two months out of twelve, you would have to pay Minnesota income taxes.

Dayton says that would bring in $30 million in two years. The Department of Revenue said the tax would apply to dividends, interest and capital gains, and that it would be enforced like any other income tax -- through voluntary compliance.

Rep. Trey Radel, a Florida Republican, sees this proposal as an invitation to Minnesota snowbirds to move to Florida year-round because there is no income tax.

"I was upset to see that the governor was going to try and punish people who live and work and contribute to our community if they decide to go back to their home state of Minnesota," Radel said.

"They're very surprised that someone would propose something like that. These people already pay full-year property taxes even though they're only here part year. Now they want additional income taxes too. It's perceived as very unfair," said Todd Koch, an accountant whose clients include a number of Minnesota snowbirds.

Koch said this proposal has some Minnesotans thinking about moving. But he is advising his clients to wait and see what happens, because the budget proposal and the final budget are often two very different things.

A spokeswoman with the governor's office said this tax is all about fairness. She said if people live in Minnesota for even part of the year, they benefit from state services, so they should pay taxes to support them.