Tax Bills Take Center Stage


On Thursday of this week, the Senate Tax Reform Division adopted its recommendations for the Senate Omnibus Tax Bill. Much of the attention on that bill focused on the proposed reduction in the State sales tax from 6.875% to 6%. The rate reduction is paid for by broadening the sales tax base to include clothing and a wider array of personal services ranging from haircuts to car repairs, to tattoos. However, the bill does not include expansion of the sales tax to business services as Governor Dayton had originally proposed in his tax plan.

On the corporate tax side, the bill also includes a reduction in the corporate income tax rate from 9.8% to 9%. That reduction is paid for by closing “corporate tax loop holes” such as the tax treatment for foreign operating corporations.

At a press availability this morning, Senate Tax Committee Chair Rod Skoe indicated the bill would be approved by the Senate Tax Committee and sent to the Senate floor the week after next. House leaders and Governor Dayton’s office were not enthusiastic about the Senate tax bill.

On the House side, the House Tax Committee will begin discussion of its Omnibus Tax Bill on Monday at 9:00 am. The House will vote its tax bill to the floor no later than Wednesday of next week. Details of the House Tax Bill will not be available until Monday, but the House bill will include individual income tax increases greater than the 9.85% top rate which has been proposed by Governor Dayton.