Commentary: Loon calls for action on tax conformity, B2B tax repeal

Eden Prairie News
by Jenifer Loon

As tax season looms, thousands of Minnesotans of all income levels are filing state income tax returns that are much more expensive — and even complex — than ever before. This isn’t the result of last year’s budget that raised taxes by over $2 billion. Rather, it’s a consequence of the non-conformance of state income tax codes to federal codes.

Why is tax conformity so important? Conformity not only makes it simpler to file, but also allows Minnesotans to take advantage of tax assistance available at the federal level.

Right now, folks who send their kids to child care, donate to food shelves, own a home with a mortgage, buy teaching supplies for their classrooms, adopt children or pay certain student loan interest are unable to reduce their income tax liability because standard deductions or credits are no longer available.

There is still time to rectify this problem before tax day. I am calling on my fellow state legislators to take rapid action on tax conformity when we return to St. Paul on Feb. 25.

Another item that deserves prompt consideration is the repeal of three new business-to-business taxes on warehousing/storage services, telecommunications equipment purchases and commercial equipment repairs.

Businesses of all sizes and all sectors are affected by these taxes. We’ve heard stories from owners who have had no choice but to either pass the added costs to consumers or make the difficult decision to cut jobs, stop expansion or even move to more a business-friendly state.

Legislators on both sides of the aisle agree these taxes were ill-advised. I have introduced a bill that would eliminate them, and I look forward to working together to ease the burden on our businesses and save the jobs they provide in Minnesota.

On the subject of tax reform, I have also introduced legislation to help simplify the tax code by conforming the state estate tax to federal law. The bill also has a provision to repeal the new gift tax.

If you are unfamiliar with the gift tax, it was signed into law just last year. Minnesota is now one of only two states to have its own tax of this kind on the books. It essentially creates a “double whammy” for folks who want to turn over their assets to their children, relatives (other than a spouse) or friends, because it layers on top of the already existing federal tax.

The frigid temperatures and ample snowfall this winter have many contemplating warmer climates. We shouldn’t provide additional disincentive through our tax policies for Minnesotans, and their assets, to move out of state.

As we near the beginning of the 2014 legislative session, please continue to send me your thoughts, ideas and suggestions. I can be reached at or (651) 296-7449. I look forward to hearing from you!