Late last night, the Minnesota Senate passed a comprehensive tax bill that makes significant changes to individual, corporate, and sales taxes in Minnesota. The governor is expected to sign the bill into law. Below are some of the key points that have been announced since the law’s passage a few hours ago.
- Individuals with taxable income of more than $150,000, and married couples with taxable income of more than $250,000 will pay a new, 9.85% rate on the dollars over those limits.
- This means Minnesota now has the 4th highest top individual income tax rate in the country.
- This also imposes a significant “marriage penalty” on these earners, since the threshold for married couples isn’t twice that for single people.
- The taxes on a pack of cigarettes will increase by $1.60 to a total of $2.83.
- Businesses purchasing capital equipment will be allowed an up-front exemption from sales tax on those purchases, though the definition of “capital equipment” and the procedure for taking advantage of the exemption haven’t yet been announced.
- Commercial warehousing and storage services, electronic repair services and the sale of telecommunications equipment will now be subject to sales tax. These items were previously exempt.
- There is money in the law to help hold down property tax increases, and possibly increase the number and amount of property tax refunds available to homeowners and renters, but the details on this are also yet to be announced.