ST. PAUL, Minn. – A huge tax cut will go into effect in Minnesota on July 1, boosting small business owners, farmers, and people with outstanding college loans among others.
The Republican-led bill will total $650 million in tax cuts over the next biennium, and much more over subsequent years, reports the Star Tribune. Other beneficiaries of the cuts include first time home buyers, Social Security recipients, and families with childcare costs.
However the bill is not quite settled yet, as Gov. Mark Dayton is attempting to force the legislature back into session to repeal certain tax cuts. He line-item vetoed the entirety of funding for the legislature for the next two years. The legislature responded by filing a lawsuit alleging Dayton did so unconstitutionally, by violating the separation of powers.
Dayton takes issues with provisions in the tax bill which raise the exemption limit on estate taxes, tobacco tax breaks, and a corporate income tax freeze.
“[Your] job has not been satisfactorily completed, so I am calling on you to finish your work,” Dayton wrote in a May letter to Republican legislative leaders regarding the legislative defunding.
A total of 284,000 senior citizens will get a break on their social security income, reports the Star Tribune. Business owners will be able to exempt the first $100,000 of property from property tax calculations, and automatic increases in property taxes linked to inflation will also be suspended.
The law passed both houses with large bipartisan majorities, reports the Star Tribune. Dayton also signed the law, though he claims he did so under duress as a provision in another law authored by the Republican led legislature made funding for the Minnesota Department of Revenue conditional on Dayton’s approval of the tax bill.
Dayton and the legislature will meet in court for the first time today. The legislature is being represented by the law firm Kelly, Wolter, & Scott at a 50 percent discount. Dayton’s team at Briggs and Morgan includes former Minnesota Supreme Court Justice Sam Hanson, at a 25 percent discount.
Stay tuned to Alpha News for updates on the first day of the court battle later today.