Dear neighbors,
I hope you all were able to enjoy the warm temperatures this weekend! I wanted to take a moment to update you on what has been happening in the last week at the Capitol. If you haven’t filed your taxes yet, I have some information about filing that may be helpful. You can click on the photo link below to see the video update about some of the many other issues I worked on last week:
Tax Cuts for Middle Class Minnesotans
The House began work immediately this session on tax relief. We drafted our version of the tax relief bill during the first week of session. The final vote was taken on March 21st and then sent to Governor Dayton for his signature. The bill provides $508 million in tax cuts to Minnesota families and businesses. There are many good provisions in the bill, and I am pleased to say I had a hand in a few of them.
My bill to repeal machinery repair taxes was passed in this bill. There will be no farm machinery repair tax going forward. It was a provision that I opposed last year, but it was added during Senate negotiations. For the farmer’s sake, I was glad to see that provision removed. The repeal is also good for our border communities. Secondly, many farm families in our district have raised the issue of the inheritance tax and being able to pass along their family operation to their children without burdening them with debt due to gift and inheritance taxes. The bill that was signed into law just over a week ago lifts the cap so that young farmers inheriting land or equipment won’t be burdened by taxes to the state of Minnesota on inheritance under $2 million and we completely eliminated the gift tax.
We significantly reduced taxes for working families in this bill by dedicating $230 million in middle class tax cuts through federal tax conformity. More than 650,000 married couples will save an average $115 per year through the elimination of the “marriage penalty.” This tax cut begins next year, for the 2014 income tax filing season. Over 16,000 more middle class families will qualify for the Working Family Tax Credit, and everyone who qualifies for the credit will receive an increase. More than 25,000 families who qualify for child care tax credits will see an average increase in their tax credit of $74 per year.
I authored or co-authored all three business-to-business taxes that have been repealed.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.
-Warehousing and Storage Services Tax: The warehousing sales tax that was set to take effect on April 1, 2014, has been repealed.
-Telecommunications Equipment Tax: The sales taxes on telecommunications equipment have been repealed. The goal is to have telecommunications providers use these dollars to invest in broadening affordable broadband internet access throughout the state.
More than 285,000 recent college graduates will receive up to $190 per year by deducting their student loan interest. Another 40,000 current college students and parents will receive a tuition deduction of $140 per year, on average.
Important Tax Filing Information
Because this tax relief package was passed before April 15th, the Minnesota Department of Revenue is working hard to make these tax cuts available to Minnesotans who have not yet filed their 2013 tax returns. The Department of Revenue will update all of their internal and online systems by April 3, 2014. They will also be working closely with online vendors who process returns to make sure that their software is updated to correctly process returns for potentially increased tax refunds.
If you have not yet filed your 2013 taxes, you should wait until after April 3, 2014 to do so.
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The Department of Revenue will have their online systems updated by then to account for tax refund changes.
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You can keep updated with changes at the Department of Revenue’s website by clicking on the orange button at the bottom of their home page:
If you have already filed your 2013 taxes, you don’t need to do anything right now.
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The Department of Revenue will be mailing refunds as usual and then reviewing returns that they received before the changes went into effect.
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They will be doing this review after the April 15th tax deadline and then sending out any refund increase by whatever means you elected to receive your refund.
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If you are eligible for an increased refund, the Department of Revenue will be able to make the necessary changes to your return with the tax documents you provided. If they are unable to do so, they will individually contact you by postal mail to request necessary documents to amend your return.
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The Department of Revenue will also be communicating all tax refund changes and updates to CPA’s and tax preparers around the state.
If you have questions or concerns about this process or any tax changes please contact me at 651-296-4929 or rep.jay.mcnamar@house.mn
Sincerely,
Jay McNamar
State Representative