As you likely heard, the recent official state budget forecast projected a $1.869 billion surplus. This is the official number lawmakers will use as they prepare the next two-year budget, and it paves the way for significant tax relief in 2015. Recently, Speaker Kurt Daudt (Crown) said his caucus felt that a little over half, $900 million, of that should go to tax relief. Of course they will have to reach an agreement with the Senate and Gov. Mark Dayton, which won’t be easy, but the Senate is up for election in 2016 and hopefully more will happen in this area than less.
We have two top priorities. One is to finally conform to the federal general estate tax exemption, which is $5.43 million per person, while the state is phasing into only a $2 million per person exemption effective 2018. The other top tax priority is some sort of a small business-oriented income tax cut, and the House has proposed two different measures that would pertain to small and medium-sized flow-through companies, which make up 92 percent of the businesses in Minnesota. One would reduce taxable income by 10 percent for all flow-through companies, and the other measure would repeal our very high top 9.85 percent individual rate for flow-through companies. Hopefully this large surplus will provide some additional momentum for achieving significant tax relief in 2015.
Mike Hickey
NFIB/Minnesota state director
