Tax Breaks Now Law, What Minn. Taxpayers Need to Know

Updated: 03/27/2014 1:01 PM KSTP.com By: Cassie Hart

Photo: AP/Damian Dovarganes
Photo: AP/Damian Dovarganes

Big news from the State Capitol Friday, as Governor Mark Dayton signed the bill approving $508 million in tax cuts for middle class Minnesotans and businesses.

The house passed it after the senate did. Many Minnesotans will see immediate tax savings during the current tax filing season. The cuts also apply to taxes for 2014.

$150 million goes to the budget reserve and the remaining is a $600 million budget surplus.

So now what? The best thing to do is wait.

Virginia Harn, a tax partner with CliftonLarsonAllen, says the Minnesota Department of Revenue will review each tax return and determine whether adjustments and refunds can be made automatically. The Department will contact any taxpayer who will need to file an amended return to receive these new tax benefits.

Reducing Taxes for Middle Class Minnesotans ($230M)

By conforming Minnesota’s tax code to the federal government’s, the bill signed today by Governor Dayton will simplify taxes and provide tax cuts for middle class Minnesotans.

Reducing Business Sales Taxes ($232M)

All three business-to-business taxes have been repealed.

Electronic, Farm and Commercial Equipment Repair Tax. The sales tax on repair and maintenance of electronic and commercial equipment has been repealed. This includes repair and maintenance of farm equipment.

 

Tax Credits for Innovation and Jobs ($3M)

The bill signed Friday provides additional tax credits to fuel innovation and create jobs.

Revenue Commissioner Myron Frans will hold a press conference Monday to discuss how the tax bill could affect 2013 income tax returns. Frans will offer guidance to the more than 1 million taxpayers who still need to file. More than half of Minnesota taxpayers have already filed.