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MN Passes Supplemental Tax Bill

In mid May, the Minnesota Legislature passed an Omnibus Tax Bill that is supplemental to the bill passed earlier in the year; Governor Dayton has added his signature so we are in for a few more tax changes late in the game.  Listed below are a few of the changes.

Property Tax Refund Increase – For refund claims based on real estate taxes payable in 2014 and rent paid in 2013, the bill requires the Commissioner of Revenue to increase refunds 3% for homeowners and 6% for renters.  The bill also adopts federal changes affecting household income. If you filed your property tax return before June 4th, the MN Department of Revenue will automatically review the return, increase the refund by the appropriate percentage and send a letter explaining the changes.

Did you qualify? Homeowners may qualify for a regular property tax refund if their total household income for 2013 was less than $105,500. Renters may qualify if their total household income in 2013 is less than $57,170.

Education Credit – For 2014 only, taxpayers with a child who has been tested for but not found to have a learning disability and who has still been determined to have a deficiency in reading skills may qualify for a credit of up to 75% of expenses related to tutoring or instruction to meet expected standards. The maximum amount for the credit is $2,000 and is refundable.  The expenses then cannot be included in the calculation of the K-12 expenses credit.

Sales & Use Tax – there were several changes to sales and use tax provisions.  If you are required to remit sales and use tax you should visit the MN Revenue website and take note of any changes to your specific requirements.  The industries that were most affected were digital products, medical supplies and non profits.  There were also several changes to food and beverage tax and local sales tax.  The cities and counties that had changes were: the city of Duluth, the city of Proctor, the city of Albert Lea, the city of Baxter, the city of Brainerd, Rock County, Nobles County, and the city of Luverne.

Accelerated Payments – for business required to make accelerated payments of sales & use tax, cigarette and tobacco excise tax, and liquor taxes; the threshold went from $120,000 to $250,000 and the percentage for June went from 90% to 81.4%.

If you are interested in reading the Bill you can find it here.

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