ST. PAUL, Minn. (AP) — The Minnesota House on Wednesday passed a Republican-sponsored bill to reduce and ultimately eliminate state property taxes on businesses, but Democrats criticized the measure for shifting money away from a tax credit for renters.

The House passed what Republicans call the “tax relief and job creation act” on a 72-62 party line vote. Its centerpiece is a one-year freeze on a state-imposed property tax, paid by businesses and corporations, followed by a permanent phase-out over 12 years that would begin in 2014.

“It encourages businesses to stay here, expand here, to move their operations here and create more jobs,” said Rep. Bob Gunther, R-Fairmont. “It declares to job creators around the country that Minnesota is open for business.”

The tax, properly known as the commercial/industrial tax, now raises about $880 million a year for the state. To cover expenses lost from eliminating the tax, Republicans proposed a reduction in the size of a state credit that renters receive for the portion of their rent that covers the building owner’s property tax.

Democrats called that a clear case of shifting tax policy in a way that harms the poor and middle class in favor of the wealthy.

“This is not Minnesota nice, when you are placing a much higher priority on wealthy corporations over our senior citizens and our middle-class families. That is extreme,” said Rep. Paul Marquart, DFL-Dilworth.

Marquart said about 30 percent of the roughly 300,000 people who qualify for the credit — a renter currently must earn less than $55,000 a year to get it — are senior citizens or disabled people. He said the average senior citizen would lose about $100 a year. Under the legislation, seniors and the disabled who make less than $40,000 a year will be eligible; everyone else will have to make less than $25,000 a year to get it.

Republicans in both the House and Senate have pushed to eliminate the business property tax as the best way to improve the state’s job climate. Republicans share the emphasis on creating new jobs with Democratic Gov. Mark Dayton, who has proposed a $3,000 per-hire tax credit for every Minnesota business that hires a currently unemployed person, a military veteran or a college student.

Dayton’s proposal did not make it into the House tax bill under debate Wednesday. Neither did a Senate version that was unveiled earlier in the day.

Like the House Republicans’ bill, the signature item in the Senate bill is the business property tax phase-out by 2026. The bill’s author, Sen. Julianne Ortman, said it would make it easier for companies to hire more people.

“It should be an urgent issue,” said Ortman, R-Chanhassen.

The Senate bill also contains relief for married couples on their 2012 income taxes. It does not reduce the renter’s credit, which Ortman has said she does not support. Instead, it aims to make up the difference in unspecified cuts to state agencies.

Both Ortman and the House Taxes Committee chairman, Rep. Greg Davids, have said they are open to negotiating a tax relief and jobs bill with Dayton. But Dayton has been cool to the idea of eliminating the business property tax, saying it should be part of a larger package that also aims to reduce property taxes on homes.

The House tax package also increases a research and development tax credit, provides a sales tax exemption for businesses with fewer than 20 employees, and extends a tax credit of up to $14,400 for employers who hire veterans who are disabled, unemployed or on food stamps.

Republicans said the business property tax makes Minnesota’s tax burden on businesses among the country’s highest, while the state’s residential property tax rates are more in line with other states.

But Rep. Ann Lenczewski, DFL-Bloomington, criticized the tax elimination as an ineffective way to create jobs.

“You don’t have to create a job to get any money here,” Lenczewski said. “You just get it.”

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Comments (42)
  1. Dirty Republican Filth says:

    I run a home business and employ 2. Therefore, you’re giving me free property tax on my residence? Idiots. Dirty, dirty republican filth.

    1. Diane says:

      Considering you dont pay an industrial tax on your primary home you really are not part of the discussion. Glad to see you are employing people in MN, keep up the good work!

  2. Deep Thinker says:

    as quoted in the article….. “They say that benefits corporations at the expense of senior citizens, the disabled, the poor and middle class” ….so it’s just republicans doing what they do best…

    1. Dirty Republican Filth says:

      I think I’m gonna call it. Stickin’ my neck out. 2014 is going to be a very bad, bad year. Obamacare kicks in for all, the national debt will have a hard time being refinanced with the bond bubble, MN is handing out money like candy to the elite at the expense of the common man…I’m gonna buy gold.

  3. Tom says:

    And this will do absolutely nothing to create employment. You can taxes to zero for a busniess but that won’t increase demand for their product or service.

    1. Mike says:

      Bingo! Couldn’t have said it any more clear. If you don’t have demand, you can not create business. It’s that simple.

      1. dan says:

        Mike and Tom, you are so brilliant! We are not talking about start up companies here. We are talking about exisitng companies with existing product and customer base. We want to either keep them in MN or attract out of state profitable companies to move to MN. Once we pass the right to work legislation you will see a steady increase of companies moving to MN to employ Minnesotans.

        1. lil' jackactionhero's Momma says:

          Maybe the #1 Dumbest Comment on a public forum this week.

          Not sure who you schilling for, the GOP or private companies, but all that happens in this scenario is the GD businesses line their pockets, hire a couple to say “see” and the gap betwee middle class and the real have widens even more.
          Dude – this actually is about class warfare, pure and simple. And this is coming from a GOP voter who may be making the switch, Gawd forbid, to the left. Or more likely just not voting…… which I guess is a roundabout vote to the left.

          The party may lose every damkit thing they worked to gain come elections…which makes me sick to think about.. Far left and now far right. Not a damkit bit of common sense and decency left in either party.

        2. Tom says:

          @ dan

          Lets say you give a business person who has been in for 5 years and this person sells and repairs boat motors. And before the deep recession hit this person had 6 people working for them. When the recession hit there was no demand for boat motors they had to let 4 people go. Now lets say the GOP get this bill passed. Now if this person sees that busniess has not picked up why woudl they bring back those 4 people they let go just because they get this tax cut?

          And look at this way would have this tax cut saved Circuit City? Or Blockbuster?

  4. Squirting Liberal says:

    I throw glitter at you!!!!!!

  5. Malthus says:

    How could cutting business taxes NOT create jobs? If you own a business and your expenses go down, you either expand or buy stuff. Both create jobs!

    There are some really uneducated fools here that buy into the nonsense sound bites the liberal media is reporting. The stupidity is embarrassing.

    What good does renters credit do you when you are evicted because you don’t have a job and can’t pay the rent?

    1. What? says:

      Oh boy. “Maluthus,” really? Did you choose that name intentionally? Do you know who he is, his theories or his economics? I doubt it since you don’t seem to find your way around on this topic either.

      1. Malthus says:

        Do you have a point? Why are you wasting everyone’s time making a completely vacuous post?

        Try to refute the fact that cutting business taxes create jobs.

        1. What? says:

          Example 1)There are 10,000 seniors retiring from their post everyday. Have 10,000 jobs been snapped up everyday? Nope. It’s getting better for low skill and low pay workers.
          Example 2) We are a consumer society. So, if a consumer has less disposable income they spend less on the goods/services that someone sells which makes the seller retract…which is has happened. When they retract they are slow to rehire and tend to rehire for less. It starts with the consumer in America and when a seller makes it big they move off-shore.
          Mostly, it just doesn’t matter. The fed has cornered themselves. They have to start raising these artificially low interest rates they created or they will just be throwing gas on the inflationary fire. The bond bubble is bursting which will make the debt very real. The deficit is growing and growing and growing year over year. Thanks to all these crazy tax cuts, wars, the recession and our growing population of retirees, the federal government is spending more than it takes in and will have to increase revenue to make up the difference. This has been obvious for years, but politics has postponed the inevitable. In 2013, experts say, the fiscal strain will hit critical mass and the delays will end. The top income bracket will go from paying 35% to almost 40%, with surtaxes expected in 2014. After that? They could even go higher. So, go Republicans…keep up with those tax cuts for your buddies. Great job you morons.

          1. Malthus says:

            If you read what you wrote, you would be appalled.

            FYI: The biggest items in the Federal budget are social programs.

            You really wandered off topic: Does cutting taxes on business create jobs?

            The short answer: Yes.
            The long answer: Yes.

            1. What? says:

              Social Programs? Social Programs? No buddy, you can move these over to the column of economic reality. You republicans are working on other “social programs” now. Like, abortion that’s been settled for my entire life. Gays who’ve been around forever and voter ID, since it’s such a huge problem. Social programs. Social security was funded by the people on false math of the government. Short answer, you lack reason. Long answer, your ability for rationality fails you.

              1. Malthus says:

                Your ability to act like a fool has exceeded my capacity to tolerate it. You are tediously and stubbornly an idiot.

                Good luck to you in all your future endeavors.

                You’ll need it.

                1. What? says:

                  Now, there’s a good argument. Proof. “Malthus.” You must be a big supporter of those birth control pills then?

    2. 9th Grade Economics says:

      “How could cutting business taxes NOT create jobs? If you own a business and your expenses go down, you either expand or buy stuff. Both create jobs!”

      Wrong on both counts. Let’s just say the taxes are cut for businesses. Like Tom said above, the tax cuts won’t do a thing to change the low demand. Business owners know this too. So after this new tax cut gets businesses out from behind the 8-ball, you think they’re going to go right back behind the 8-ball to spend money on added employees or added inventory? All the while knowing the sagging market won’t sustain those new employees or new goods? Take a class, friend. Business owners are going to soften the hit on their bottom line and pocket the cash, unloading more of the tax burden onto John Q Paycheck.

      1. Malthus says:

        Let me go out on a limb, you don’t own a business do you?

        1. the old nurse says:

          A business that has no demand as the US is a service economy cannot expand even if they pay no taxes. No expansion means no jobs gain.

          1. Malthus says:

            If the business has no income then they have no revenue and a tax cut means nothing to them. And it isn’t costing the state a penny.

            So why is that still a problem for you?

            Oh I forgot, liberals hate hardworking people with money.

    3. lil' jackactionhero's Momma says:

      Talk about buying into the bullchit- “Maluthus”, you actually are as dumb as a lib.
      I have 3 sibs own businesses – they have hired 1 person in 5 years, yet are in sectors that are flourishing. They are making BIG money and stashing away every penney of it. I say good for them but DO NOT BS us with the “either expand or buy stuff”
      It’s a rocky ocean we on and those with the means know it and save save save – spend spend spend was yesteryear.

      Another idiot or schiller you are. Matters not – even the dumb see through it

    4. Progressive Populist says:

      Or, Malthus, you can take the money from the tax cut and line your personal pockets which the wealthy have been doing for many years now. They aren’t putting the money into business or jobs or economic development. They are hoarding it.

  6. Blue Donkey says:

    In other news, Gov. Mark Dayton is warming up his veto pen. Just another stalling tactic from the GOP. Waste time passing measures that won’t be signed into law. That way, no real work will ever get done. We’ll force a special session and do more of the same. Then, we can shut the state down, blame the governor, and cost taxpayers millions more. All the while our REAL constituency (the super rich) won’t be adversely affected.

    1. Carl says:

      So I guess according to Liberals doing anything to attract companies to MN to increase employment is a waste of time. Take that to the polls in November and be prepared for your second whipping in a row.
      BTW, Dayton can take full responsibility for shuttting down the govt last summer. He alone chose to shut it down and open it back up with out 1 single change in legislation. The blame game is really getting old…..Bush did it!

      1. the old nurse says:

        Right wing revisionist history will get you nowhere. The GOP culpability is their inability to pass legislation in a timely manner. In a situation that required give and take, the Republicans preformed less than poorly. I would not expect such a narrow minded person as yourself to see that.

        1. Carl says:

          I think the Liberals can take blame for holding up legislation the Republicans have put forward. I guess you consider that everyone should participate in a give and take mode when you are in the minority? I didnt see any give and take when Obamacare was pushed down our throats or when Obama stopped the new Keystone pipeline when it would have added thousands of needed construction jobs.

  7. j speedbag64 says:

    c’mon brodkorb lets get these mutts……

  8. so transparent says:

    As in Hennepin county, the shortfall is always placed on the backs of the homeowner. We already pay the taxes that business can’t so they can stay in business. A double digit increase for 6 years now.

    I soon will give up my house and living in this insane state altogether.

    1. Jill says:

      Except for the sales tax four Democrat Hennepin County commissioners tied around the neck of everyone after removing the people’s right to vote.

      But why shouldn’t your money be given to the billionaire Pohlad family?

  9. IsThisASurprise? says:

    The GOP is doing what the do best which is supporting their big money friends. That is their ONLY interest. Just remember who voted these outstanding individuals to office in the first place.

    1. Sam says:

      You liberals are crazy. Your only skill seems to be in repeating hate-filled socialist sound bites.

      It’s easy to remember “who voted these outstanding individuals to office”: the majority of Minnesotans voted them in. Thank goodness.

      1. the old nurse says:

        What will you say with the fall elections as the middle of America is fickle with the disgusting choices presented by the parties.

        1. Carline says:

          It will be a repeat of the last election. Republicans will continue to take a majority in office. The unadulturated time that Democrats have had in office and what they concentrated on is the main reason the majority of people are fed up. Global Warming, Alternative energy loans, big business bailouts and Obamacare were a huge waste of time and energy.

          1. What? says:

            Well, Carline. Global warming used to be a republican issue at its start. Big bailouts came with the Bush administration. Can I borrow your crystal ball?

  10. SO SAD says:

    The House tax package also “provides a sales tax exemption for businesses with fewer than 20 employees.” Does this mean we wouldn’t have to pay sales tax in these establishments?

  11. lil' jackactionhero's Momma says:

    I missed who the sponser of this was – Ms Ortman , the parent who shuffled her kids off to school without them ever having down homework, the same kid sthat had issues and issues in and out of the classroom, the same woman who never made it to a single parent conference or meeting in 2 years ……
    it all makes sense now, it really does.
    To bad for the kids – they actually were not bad, just begging for attention and love.
    ’nuff said

    1. Carl says:

      Wow, LIl mama, you are really in touch with Ms Ortman’s life. How is it that someone like you would hold all the precious details of how Ms Ortmans kids perform in school or wether or not she had made school conferences in the past 2 years???

  12. Lulu says:

    all republicans suk.

    1. Carline says:

      Dont be so bitter, your next president will be a Republican.

      1. Zack says:

        I agree. The Republican primary is, in fact, selecting the next president.

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