Minnesota House Backs $500M Tax-Cut Bill

Updated: 03/06/2014 10:20 PM KSTP.com

Photo: KSTP/File
Photo: KSTP/File

The Minnesota House has given overwhelming approval to a $500 million package of tax cuts and repeals.
Thursday's 126-2 vote comes just more than a week into the legislative session. The bill heads to the Senate, where leaders haven't publicly embraced the plan.

Gov. Mark Dayton and many in the Legislature are racing to undo some business sales taxes adopted last year, including one on warehousing services due to kick in April 1.

“Minnesota’s economy has momentum and this middle-class tax cut will build on our progress,” said Speaker Paul Thissen. “These tax cuts will put more money in the pockets of nearly one million Minnesotans and help us continue building our economy from the ‘middle-out."

If the bill passes the senate and gets the Governor's signature, the Department of Revenue said they will work to let Minnesotans who have already filed taxes know if they would qualify for an additional refund or tax break. It would come in the form of a check. "Right now, about 70 percent of Minnesotans haven't filed their taxes yet, which speaks to the urgency of getting it done quickly," said DFL House spokesman Michael Howard.

“Minnesotans are optimistic about the progress we have made and the direction we are headed,” said House Majority Leader Erin Murphy. “Today’s middle class tax cut is another positive step forward to continue building a better future in Minnesota.”

The bill also aligns Minnesota's tax code more closely with the federal one, making some exemptions and deductions available to state filers. Some of those breaks would be effective for people filing tax returns now.

Democrats said the state's improved budget allowed for tax relief. Republicans said the package should have been bigger.

Bill Blazar, Minnesota Chamber senior vice president of public affairs and business development, released the following statement:

“The House vote underscores the broad bipartisan support for the immediate repeal of all three sales taxes on business-to-business transactions. Legislators have clearly been hearing from their constituents about the negative impact of these taxes on the state’s economy. The Governor continued to show his support, too, with his supplemental budget that was presented today. We now ask Senate Majority Leader Tom Bakk and members of his caucus to join ranks and act quickly to repeal the three taxes by April 1 before they do any more damage to jobs and businesses.”

The Associated Press contributed to this story.