The Senate passed a nearly unanimous bi-partisan omnibus tax bill. The bill continues to keep Minnesota’s finances sound while providing middle-class tax relief. Some provisions are federal tax conformity, business tax repeals, and a significant increase of money into our state’s reserve.
Families across Minnesota will see relief from changes to the Working Family Tax Credit. We expanded the credit to reach roughly 16,000 additional Minnesota taxpayers and increased the credit for hundreds of thousands currently receiving.
Businesses will benefit greatly. Start up businesses and entrepreneurs will benefit from the Angel Investment Tax Credit. We extended this program for two additional years and the annual allocation has been increased from $12 million to $15 million. We also designated that a larger percentage of this money goes to rural counties, women and minority-owned businesses. Businesses will also be helped through sales tax relief on certain purchases starting April 1, 2014.
Another important measure contained within the bill transfers $150 million into the state budget reserve in July and sets an automatic threshold for future surplus revenues. State economists have warned us the state lacks an adequate budget reserve, and non-partisan experts agree additional funds are needed to improve the state’s fiscal outlook. Minnesota is not recession-proof and saving for the future is not just a recommendation, it’s essential.
For Minnesotans who qualify for tax relief changes on their 2013 tax return, the Department of Revenue recommends those who have not filed to wait until April 1. Returns that have already been filed will be analyzed by the department. If the department determines a filer needs to amend a submitted return, they will contact the filer.