Chapter Omnibus Tax Bill HF3149 passed by the House on May 5, 2008; HF3149 (SF2869) passed by the Senate on May 7, 2008

Transcription

1 1 2 TAX REVENUE CHANGES 3 Note: Positive numbers represent revenue gains or budget savings. 4 Negative numbers represent revenue losses (tax expenditures) or appropriations. 5 6 Federal Conformity 7 GF Tax Relief and Health Care Act of extension for enhanced deduction for qualified computer contributions (TY 07) 8 (330) Individual Income Tax Bakk 871 Rukavina GF Subtraction for AmeriCorps / Nat'l Service Trust Education Awards (1/1/08) - - (110) (230) (110) (110) (110) (120) (230) Skogen 1650 Nornes GF Fergus Falls Historic Rehab. Credit; 25% of Fed. Credit (500) Murphy 1817 Wollschlager GF Active Military Combat Zone Credit Increase GF Subtraction for National Guard Training Outside MN, (405) retroactive to TY05 14 GF Subtraction for Military Pay and Pension, phased in over 4 yrs begin. TY (28,430) GF Veterans Tax Credit capped at $750 a year, eff. TY (10,300) (10,300) (20,600) 16 GF Active Military Combat Zone Credit Increase to $120 per (1,100) (1,100) (2,200) month, eff. TY09 17 GF Military Pay Subtraction, eff. TY09 (3,500) (3,600) (7,100) 18 A 15 Severson GF Military Pension Subtraction (eff. Date 1/1/09) (14,800) 19 GF SEED - Capital Investment Tax Credit (1,500) Bakk 4168 Lenczewski GF Wages Subject to Withholding - Eliminate Fed. Safe Harbor Rule (eff. TY 09) - - Unk. Unk. Unk. Unk. 21 Individual Income Tax Interaction for Property Tax [5,022] [8,434] [13,456] Provisions in HF3149 (See note**) Lenczewski GF AMT Modified to Exclude Charitable Contributions by Non (Negl.) (Negl.) 0 (Negl.) (Negl.) (Negl.) (Negl.) (Negl.) Itemizers (eff. TY 09) 23 Subtotal Individual Income Tax (1,905) (28,430) (110) (730) 0 (14,800) 0 (110) (110) (15,010) (15,120) (30,130) Corporate Franchise Tax Moua / Ortman Davnie Simpson GF Mutual Fund Service Providers, Changes in Apportionment, eff. tax year 2010 (600) (4,300) 0 (2,800) (600) (2,200) (2,800) Ortman 3967 Simpson GF Foreign Operating Corp. Income Modification (TY 08) 95, , Ortman 3967 Simpson GF Foreign Royalty Subtraction increased to 90% (TY 08) 5,100 8, Ortman 3967 Simpson GF Interaction between FOC and Royalty Provisions 1,200 1, Moua 912 Hornstein GF Foreign Operating Corp. Income Modification (TY 08) , , ,900 95,900 75,700 78, , Moua 912 Hornstein GF Foreign Royalty Subtraction Provisions (TY 08) 10,900 17, ,900 10,900 8,600 8,900 17, Moua 912 Hornstein GF Interaction between FOC and Royalty Provisions 2,200 3, ,200 2,200 1,700 1,800 3,500 House and Senate Fiscal Analysts 1 Ch 366_2008_OTB.xls

2 Lencezewski GF MN Development (TIF) Subsidies Modified, excludes ,700 brownfield housing, soil, and hazardous substance districts (1/1/09) 34 Tax Havens Lencezewski GF Repeal Mail Order Apportionment (1/1/09) A-8 Davnie GF Investment Credits for Qualified Business Ventures in Biotech., Green Manuf., High Tech., Small Business R&D Special Credit; Reduce Current R&D Credit (TY08) , Davnie GF 25% Investment Tax Credits for Qualified Business Ventures in Biotech., Green Manuf., High Tech., Small Business R&D Special Credit (TY08) Bakk 495 Lencezewski GF Repeal Adj. for Pollution Control Facilities - - (50) Skoe Olin GF Bovine TB Income Tax Testing Credit (See line #185 for Bovine TB Property Tax Credit) Corporate Income Tax Interaction with Property Tax Provisions in HF3149 (See note **) Berglin Small Employer Participation Credit, Sec. 125 Plans*** Revenue impacts for employee credit tracked in Ch. 358 (SF3780) [1,091] [1,815] [2,906] 0 [-730] [-730] [-730] [-730] [-1,460] 42 Subtotal Corporate Fran. Tax 101, , , , , , ,000 85,740 87, , June Accelerated Payments* 45 GF Increase from 80% to 85%, w/ sales tax rate reduction of.125%, eff. June 2009, Net GF Impact 46 15, Ortman 3967 Simpson GF Increase from 80% to 90%, eff. June GF Sales & Use Tax ,100 1, ,100 27, ,200 1, GF Cigarette Excise Tax - - 1,100 (80) ,100 1,100 (40) (40) (80) 50 GF Cigarette In-Lieu Sales Tax GF Tobacco Products Tax Excise Tax GF Alcoholic Beverages Tax GF Cigarette Health Impact Fee - 75 per pack. Transferred to - - 1,800 (100) ,800 1,800 (50) (50) (100) GF from HIF 54 GF Tobacco Products Health Impact Fee. Transferred to GF from HIF Ortman 3967 Simpson GF Increase from 80% to 85%, eff. June GF Sales & Use Tax , GF Cigarette Excise Tax (40) 59 GF Cigarette In-Lieu Sales Tax GF Tobacco Products Tax Excise Tax GF Alcoholic Beverages Tax House and Senate Fiscal Analysts 2 Ch 366_2008_OTB.xls

3 62 GF Cigarette Health Impact Fee - 75 per pack. Transferred to (50) GF from HIF 63 GF Tobacco Products Health Impact Fee. Transferred to GF from HIF Subtotal June Accelerated Shift 15, ,750 1,680 15, ,750 31, ,140 1, Sales and Use Tax 67 GF Reduce Statewide Rate by 0.125%, from 6.5% to 6.375%, (76,940) (178,370) eff. July 1, 2008 * Moua 3395 Tillberry GF Commuter & Light Rail: Northstar & Central Corridor - - (3,100) (8,370) - 70 GF Commuter & Light Rail: Northstar Vehicles & Parts (3,400) (100) (3,500) 71 GF Commuter & Light Rail: Central Corridor Construction ($5m cap) (1,830) (3,170) (5,000) Bonoff 929 Rudd GF Minnetonka Water Treatment - - (140) Skoe 1333 Dill GF Emergency Response Vehicle Exemptions (Repair Parts) * - - (2) (4) (2) (2) (2) (2) (4) Olson, M 3119 Howes GF Propane School Bus Purchases / Leases * - - (5) (15) Moua 1204 Davnie GF Construction Materials for Low-Income Housing (600) (1,370) (600) (700) (1,300) Saxhaug 114 Solberg GF Public Safety Radio Communication Products for Itasca (370) Negl. 0 (125) (125) Negl Negl Negl. County, retroactive eff. date 7/1/ Ortman 2990 Kohls GF Exempt Purchase of Vehicles Outside US by Active Military (8) (7) Serving Abroad (1/1/08) * 78 Subtotal Sales & Use Tax (76,940) (178,370) (3,247) (8,389) (978) (1,377) 0 (127) (127) (5,832) (3,972) (9,804) Other Tax and Non-Tax Revenues Ortman 3967 Simpson GF Surplus-Lines Insurance Stamping Office 1,500 6,000 1,500 6,000 1,500 6, ,500 1,500 3,000 3,000 6, GF JOBZ Allow Benefits Yrs after Agreements Signed (300) (2,700) Bakk GF JOBZ Terminate Designation of Business Subsidy Agreements, eff. May 1, ,500 8, GF JOBZ Terminate Designation of Business Subsidy Agreements by June 1, ,300 8, Langseth 3855 Lanning GF Border City Capital Investment Credit Lenczewski GF Trust Tax Personal Liability Definition Claim for Refund Time - - (176) (352) Limit Expansion 87 GF Repeal Exemption for Airport Property Tax at Current Rate (Pay 2009) - - 1,900 6, Erickson Ropes 3338 Drazkowski GF Mortgage Registry Tax Exemption in SE MN Disaster Area - - (115) 0 89 Subtotal Other Tax & Non-Tax Revenues 1,200 3,300 2,885 14,500 4,524 20, ,500 1,500 3,000 3,000 6, * Denotes non-general fund impact. See non-general fund section. 92 TOTAL GENERAL FUND TAX REVENUE CHANGES 39,115 (42,910) 140, ,301 19,656 20, , ,013 68,438 72, ,626 House and Senate Fiscal Analysts 3 Ch 366_2008_OTB.xls

4 93 94 TAX EXPENDITURE CHANGES 95 Note: Positive numbers represent expenditure increases. 96 Negative numbers represent expenditure reductions (budget savings) Property Tax and Other Refunds 99 A 15 Severson GF Eliminate Political Contribution Refund (5,400) (12,500) - - (5,400) (12,500) 100 GF Property Tax Refund - Reduce Percentage for Renters from 19 to 16 of annual rent paid 0 (68,080) Subtotal Property Tax & Other Refunds (5,400) (80,580) - - (5,400) (12,500) Marquart Homestead Credit State Refund (HCSR) 104 GF Phase-Down market Value Credit: 100% Pay 09, 60% Pay (97,200) GF New Property Tax Refund Schedule w/ Maximum Income ,500 $200K, Uniform Income Threshold at 2%, Max. Refund $2,500, Indexed 106 GF Disallow Itemized Income Tax Deduction for Real & (380,000) Personal Property Taxes, eff. TY GF Interaction with Chapter (3,800) 108 Subtotal Homestead Credit State Refund (4,500) Property Tax 111 GF Enhanced Property Tax Refund, Threshold at 3.5%, Max. Refund Inceased 27.5% 112 Skoe GF Green Acres Prog. Changes; Nonproductive Lands, Farm MV Credit 113 Skoe GF Green Acres Prog. Changes; Nonproductive Lands (PTR Impact) 114 Skoe Koenen Demmer , (900) ,200 24,700 45,900 GF Green Acres Program Changes Unk Unk Unk Unk Unk Unk Unk Frederickson 486 Finstad GF Homestead Classification - Split-Class Properties Murphy 1113 Wollschlager GF Increase Utility Property Tax Rates Beginning Pay electrict generation to 2.5% Pay 09, 2.8% Pay 10; pipelines and electric transmission 2.15% Pay 09, 2.25 Pay 10. (PTR Impact) (1,720) Murphy 1113 Wollschlager GF Utility Property Tax Rates Increased for Electric Generating (480) Equipment: 2.4% PY 2009, 2.8% PY PTR Impact 118 GF Utility Property Tax Rates EDU Impact (216) 119 GF Utility Property Tax (PTR Impact) (9) Moua 4155 Loeffler GF Class Rates Modified for Residential Non-homestead (4b & 4bb) 2-3 Units Langseth 848 Marquart GF Farmland Class Rate Change for 1st Tier Hmstds from 0.55% to 0.5% (PTR impact) House and Senate Fiscal Analysts 4 Ch 366_2008_OTB.xls

5 Ortman 957 Zellers GF Senior Citizens Property Tax Cap (3,600) Doty GF Senior Property Tax Deferral Expansion, Income up to Gottwalt $80, Erhardt Marquart GF Seasonal Recreation Residential Deferral (Revenue Impact Only) Tomassoni 2052 Atkins 2753 Rukavina GF White Community Hospital District Authorized (PTR Impact) Stumpf 4017 Lieder GF Northwest MN HRA Levy Authority (PTR Impact) Bunn GF Platted Value Phase-in Modification (7-county metro. Area) GF LCTS Audit Disallowance - Levy for Pay 9, Pay 10, Pay 11 (PTR Impact) Davnie GF LCTS Audit Disallowance, Direct One-Time Pmt , GF School Tax Levy for Judgement (PTR Impact) Cohen A-2 Lanning GF Limited Market Value (LMV) 2-Year Phase-Out Delay: Paymar Market Value Homestead Credit 0 (1,480) 133 GF LMV - Market Value Farmland Credit , GF LMV - Property Tax Refund (1,575) 135 GF LMV - Targeted Property Tax Refund (6,700) 136 GF Subtotal LMV 2-Year Phase-Out Delay (8,040) A-15 Koenen GF Homestead Property Valuation Exclusion for Disabled Veterans for 2-yrs, Surviving Spouses 138 Bakk GF Exempt Gov't-owned Leased Seasonal Rec. Land Negl. Negl. Negl Dill Rukavina GF Exempt Non-Commercial Seasonal Rec. Residential Leased Public Land - County Paid PT Credit Bakk GF Retired Employee Health Benefits Date Extended - assumes % districts qualify (PTR Impact) Dibble 4078 Hornstein GF Metropolitan Council Transit Bonds (PTR impact) Bakk 3973 Dill GF Levy Authority for First Responder Services In Unorganized Territories unk unk unk A Sparks Senjem 2709 Demmer GF Repeal School District Wind Energy Production Tax Offset Subtotal Property Tax ,768 2,800 (5,618) ,715 25,224 46, State General Levy 147 GF Remove Seasonal Rec. Residental from State Levy eff. Pay - - (10,000) (82,600) ; Add Public Utility Electric Generating Property; Remove Exemption for MSP and Holman Field; Freeze Tax Rate begin. In Pay Subtotal State Levy - - (10,000) (82,600) House and Senate Fiscal Analysts 5 Ch 366_2008_OTB.xls

6 150 Local Aids and Credits 151 GF Utility Transition Aid to Local Gov'ts with >5% Reduced Tax Capacity from Utility Rule Changes 0 2, GF Utility Transition Aid (PTR Impact) 0 (29) GF Utility Transition Aid to Local Gov'ts - >5% threshold ,070 4,140 6, Koenen GF Additional Utility Transition Aid - 4% threshold GF Utility Transition Aid (PTR Impact) (52) (103) (155) 156 GF Levy Limit Proposal (PTR Impact) 0 (9,600) GF Local Government Aid ,000 42,000 84, LGA Inflation Adj. 2% FY11, 4% FY ,520 10, GF Crookston $100K for 5 yrs, (within LGA formula) GF Browns Valley $100K, ongoing (within LGA formula) GF Spring Lake Park $90K 2009 only (within LGA formula) GF Mendota $25K for 5 years (within LGA formula) Marquart GF LGA for Real Estate Foreclosures - One Time , Skoe GF Local Government Aid - Cities, Unity Proposal with indexing , GF Repeal State Cost Offsets in LGA (Art. 13, Sec. 34) , Metzen 2854 Hansen GF Mendota LGA Increase of $14,700 one time Olson, G GF Excelsior LGA Increase of $135,000 one time GF , A-9 Berns Marquart Hansen Lieder Tillberry Local Government Aid - Formula Adj. Small City, LGA Study w/ LOST Impact. $100K Browns Valley; $80K Mendota for 10 yrs; $200K Crookston for 5 yrs; Cities, Unity Proposal with indexing 169 GF County Program Aid ,000 22,000 44, GF CPA Inflation Adj. 2% FY11, 4% FY ,540 4, GF Pine County $100K adj. FY10 (within CPA approp.) Skoe GF County Program Aid, with indexing , Skoe GF County Transition Aid - Permanent Skoe 3968 Sailer GF Out-of-Home Placement Aids, Beltrami County GF , Liebling Loeffler Olin County Program Aid, including County Transition Aid, Permanent Faust Sailer GF County Program Aid: $100K adj. FY 10 for Pine County. $250K adj. for Beltrami County in each FY 10, 11, GF Aid to Townships 178 Skoe GF Aid to Townships, with indexing , Brown GF Township Aid, approx. $3 per capita , Property Tax Refund Interaction for Local Aids and Levy Limit Proposal 3.9% for 3 yrs (4,240) (7,050) (11,290) House and Senate Fiscal Analysts 6 Ch 366_2008_OTB.xls

7 181 GF Property Tax Refund Interaction for LGA (3,830) (2,480) 182 GF Property Tax Refund Interaction for CPA & Transition Aid (2,170) (1,000) 183 GF Property Tax Refund Interaction for Aid to Towns (255) (152) 184 Bovine TB Modified Accredited Zone (see line #39 for Bovine TB Income Tax Testing Credit) 185 GF Bovine TB Property Tax Credit GF Bovine TB Mgt. Zone Credit to Hunting Lands Skoe 4136 Olin GF Bovine Tuberculosis Property Tax Credit Olin GF Bovine TB Management Zone Credit to Hunting Lands Unk Skoe 4097 Davnie GF Property Tax Refund Allowed for Delinquent Taxes , GF Subtotal Local Aids and Credits 0 (7,339) 0 260, , ,650 76, , GF 192 GF 193 GF Other Appropriations 194 GF Voss Database - Dept. of Revenue A 53 Lenczewski GF Taxpayer Assistance Grants (PTR Participation) GF DOR Survey on Assessment of Nonprofit Inst Marquart GF DOR Appropriation for Industrial Special-Use Property and Other Assessments Moua 3395 Tillberry GF Northstar Commuter Rail / Central Corridor Light Rail ,000 0 Assistance to Offset Sales Tax Lenczewski GF DOR - Fiscal Disparities Program Study Moua Mahoney Hausman GF St. Paul River Centre Higgins 1269 Davnie GF Minneapolis Target Center Marquart GF DOR Appropriation for Administration of Homestead Credit State Refund 205 Skoe GF Admin.Dept. / Land Mgt. Information Center Appropriation for Township Acreage Data Subtotal Other Appropriations , TOTAL GENERAL FUND TAX EXPENDITURE CHANGES (5,400) (87,919) (9,800) 179,472 14, , , , , TOTAL NET GENERAL FUND CHANGES (Revenues - Expenditures.) Notes: ** The income tax interactions for the property tax provisions in the bill (line #s 21 & 40) were computed too late to be included in legislative tracking. The amounts are included for reference. This revenue will be included in the DOF financial forecast in November ***Based on an agreement between the Executive and Legislative branches, this provision will be repealed retroactive to the date of original enactment and replaced with a credit for health insurance premiums paid by previously uninsured individuals with limited household incomes. 44,515 45, ,028 (171) 5,606 (100,989) 0 141, ,038 (16,037) (30,105) (46,142) House and Senate Fiscal Analysts 7 Ch 366_2008_OTB.xls

8 CHANGES TO NON-GENERAL FUND TAX REVENUES & EXPENDITURES 295 Note: Positive number represent revenue gains or budget savings. 296 Negative numbers represent revenue losses (tax expenditures) or appropriations Highway User Tax Distribution Fund Olson, M 3119 Howes Propane School Bus Purchases / Leases - - (10) (50) Skoe 1333 Dill Emergency Response Vehicle Exemptions (Motor Fuels negl. negl. Excise Tax) Skoe 1333 Dill Emergency Response Vehicle Exemptions (MVST) (5) (10) 0 (5) (5) (5) (5) (10) Olseen 3126 Ruth Tax on Intracity Bus Registration Modified (eff. 8/1/08) - - (negli) (negli) 0 (negli) (negli) (negli) (negli) (negli) Prettner Solon 2781 Jaros Exempt Motor Vehicle Registration Tax for Vehicles used Exclusively for Disaster Response (8/1/08) Marty 1512 Hortman Exempt Charitable Org. Holding a MN Vehicle Dealer License Ortman 2990 Kohls Exempt Purchase of Vehicles Outside US by Active Military Serving Abroad (1/1/08) Morrow Exempt Spotter Trucks from MV Registration and Titling Requirements (eff. Day following enact. To FY 2013) - - (negli) (negli) 0 (negli) (negli) (negli) (negli) (negli) - - (Negl.) (16) 0 (negl.) (negl.) (5) (5) (10) - - (13) (32) (75) (150) 0 (75) (75) (75) (75) (150) 307 HUTDF Subtotal 0 0 (15) (60) (88) (198) 0 (80) (80) (85) (85) (170) Trunk Highway Langseth 4022 Atkins Aggregate Production Tax Rate Increase - from 10 to (915) (2,795) (915) (2,795) 0 (1,074) (1,074) (1,713) (1,082) (2,795) 21.5 per cubic yd. & 7 to 15 per ton 311 Trunk Highway Fund Subtotal 0 (1,074) (1,074) (1,713) (1,082) (2,795) County State Aid Highway 314 Reduce Statewide Sales Tax Rate by 0.125%, from 6.5% to 0 (365) %, eff. July 1, CSAH Subtotal 0 (365) Transit Fund 318 Reduce Statewide Sales Tax Rate by 0.125%, from 6.5% to 6.375%, eff. July 1, (365) Marty 1512 Hortman Exempt Charitable Org. Holding a MN Vehicle Dealer License - - (Negl.) (16) 0 (Negl.) (Negl.) (3) (3) (6) Olson, M 3119 Howes Sales Tax Exemption Propane School Bus Purchases / Leases - - (5) (35) Ortman 2990 Kohls Exempt Purchase of Vehicles Outside US by Active Military Serving Abroad (1/1/08) - - (9) (21) Transit Fund Subtotal - (365) (5) (35) (9) (21) 0 (Negl.) (Negl.) (3) (3) (6) House and Senate Fiscal Analysts 8 Ch 366_2008_OTB.xls

9 325 Game and Fish 326 Reduce Statewide Sales Tax Rate by 0.125%, from 6.5% to 6.375%, eff. July 1, Game and Fish Subtotal 328 (180) (400) Natural Resources 330 Reduce Statewide Sales Tax Rate by 0.125%, from 6.5% to (180) (400) %, eff. July 1, Natural Resources Subtotal Health Impact Fee (HIF) 334 June Accelerated Payment Changes: Ortman 3967 Simpson Increase from 80% to 85% at 6.375%: Cigarette HIF, per pack, eff. June Ortman 3967 Simpson Increase from 80% to 85% at 6.375%: Tobacco Products HIF, eff. June Increase from 80% to 90% at 6.5%: Cigarette HIF, ,800 (100) ,800 1,800 (50) (50) (100) per pack, eff. June Increase from 80% to 90% at 6.5%: Tobacco Products HIF, eff. June Increase from 80% to 85% at 6.5%: Cigarette HIF, (50) per pack, eff. June Increase from 80% to 85% at 6.5%: Tobacco Products HIF, eff. June Health Impact Fee - Subtotal 0 0 1,960 (90) 980 (45) 0 1,960 1,960 (45) (45) (90) 342 Health Impact Fee Tranferred to General Fund (1,960) 90 (980) 45 0 (1,960) (1,960) House and Senate Fiscal Analysts 9 Ch 366_2008_OTB.xls