SAINT PAUL, MN – State Senator Greg Clausen (DFL-Apple Valley) voted for the bipartisan $443 million tax relief and budget equity bill today. The broad package of tax relief measures will help thousands of businesses and families. The bill passed by a vote of 58 to 5.
“This bill provides fiscally responsible, targeted tax relief to build on our economy’s momentum while ensuring the state budget has adequate revenue in future years to support our schools and other essential services,” Sen. Clausen said. “The balanced budget packaged we passed last session has finally put Minnesota on stable economic ground with a projected $1.2 billion surplus, giving us the opportunity to make investments in working families and businesses.”
Specific tax relief for Minnesota individuals and families include:
• Marriage Penalty: By getting rid of the marriage penalty, married couples in Minnesota could save an average of $115 starting next year. This is targeted middle-class tax relief, as more than 80 percent of those eligible have an annual household income under $100,000.
• Working Family Credit: This provision expands the Working Family Tax Credit to reach 16,000 new Minnesotans. This provides an average of benefit of $334 per household. To qualify, a family of four would need to earn less than $44,000/year.
• Dependent Care: Increasing the dependent care credit for will help low- and middle-income families with daycare expenses for taxpayers with household incomes under $40,000. This will help more lower-income families afford daycare so they stay employed.
• College Debt Relief: Recent graduates and parents will see additional tax relief by being able to deduct interest paid on student loan payments.
• Adoption/Tuition Credits: Minnesotans whose employers have helped pay for adoption expenses or tuition will be able to exclude a portion of those benefits from their taxable income for 2013 – a big change for those working to build their families or expand their knowledge.
• Teachers: Minnesota’s teachers will be able to deduct up to $250 of out of pocket expenses that they invest in their classrooms each year.
A large component of the bill also provides tax relief for Minnesota businesses. Some of the specific tax relief for Minnesota businesses include:
• Sales Taxes: Eliminating sales tax on commercial and farm equipment repair, warehousing storage and telecommunications equipment will reduce costs for thousands of Minnesota businesses.
• The Angel Investment Tax Credit: This is a proven job-creation tool that has spurred millions of dollars in investment in Minnesota. Expanding that credit will make sure more Minnesota businesses have a better chance at benefitting from these investments.
“After more than a decade of deep budget cuts, I am proud to be a part of the solution to create jobs, strengthen our infrastructure and make Minnesota a more competitive place to do business,” Sen. Clausen said. “In addition to tax relief, the tax bill includes $150 million to bolster the state budget reserve account. Minnesota currently lacks an adequate budget reserve to withstand volatility in the economy, and non-partisan experts agree additional funds are needed to improve the state’s fiscal outlook.”
Week in Review:
“we repealed the business to business tax, we’ve done a lot for middle class families, we provided some tax relief for those recent graduates from college so they can deduct interest payments on their income tax return. So I think that we’ve made a lot of improvements that will help middle class families.”