Senate passes second tax bill, different from House measure
ST. PAUL — The Minnesota Senate on Thursday approved a second tax-cut bill that pretty much matches the total dollar number of tax breaks representatives approved earlier, but the two chambers go different routes to get there.
Senators voted 57-6 for their $100 million tax-break measure, which spreads the money around to a wide variety of taxes. The House already voted 125-0 for a bill focusing on cutting property taxes.
House and Senate negotiators will work on producing a compromise bill after lawmakers return from an Easter-Passover recess April 22.
Sen. Rod Skoe, D-Clearbrook, said much of his tax bill deals with relatively narrow provisions for specific communities and removing outdated laws.
Among the broader provisions is one to give active military personnel and veterans larger tax breaks.
Sen. Roger Reinert, D-Duluth, sponsored the military credit, which would increase a tax break from $120 to $200 a month for each month a person was in active military service in specific areas after Dec. 31, 2013.
Also, the annual credit for past military service would be doubled, from $750 to $1,500, and phase out beginning with income greater than $30,000.
Sen. Tom Bakk, D-Cook, has a provision in the bill to give the Revenue Department authority to negotiate an income tax reciprocity deal with Wisconsin.
Then-Gov. Tim Pawlenty canceled the agreement after Wisconsin fell $17 million behind.
Reciprocity allows taxpayers who live in one state and work in the other to pay income taxes to just one state. Since more Wisconsin residents work in Minnesota than the other way around, Wisconsin always owed Minnesota money at the end of the year. But the Badger State fell behind in its payments.
“We would like to have an agreement with Wisconsin so these people only have to file one state income tax,” Skoe said.
If the agreement is reached by the end of this year, it may include up to a $1 million loss to Minnesota, an incentive for Wisconsin to settle. If it comes after that, Minnesota will not accept a loss.
Provisions in the bill include new and expanded income tax credits for transit users, parents paying for tutoring or reading assistance, greater Minnesota businesses hiring interns, and foreclosed and short-sale homeowners. Other tax relief would go to snowmobile clubs, postseason high school events tickets and nonprofit fundraising groups.
Skoe said fire departments struggle to get volunteers, and tax credits could help them and other volunteer public safety agencies recruit more people. Each of about 19,000 volunteer public safety workers could get the $450 income tax credit.
Also in the bill is a provision to split $10 million among 83 of the state’s 87 counties to fight aquatic invasive species.