Starting today a series of new laws are being added to the books in Minnesota, and the impact of those laws has received mixed reactions....
Starting today a series of new laws are being added to the books in Minnesota, and the impact of those laws has received mixed reactions.
Among the new laws are some which lead to in-creased revenue through new taxes, while other laws provide added dollars for schools and nursing homes.
One of the changes which is going to have the most impact on the greatest number of Minnesotans is the addition of sales tax on everything from digital downloads to repair and maintenance labor.
Those sales taxes for repairs and maintenance are limited to business related repairs and services on everything from getting office equipment fixed to having a combine repaired.
When it comes to the digital and online purchases made in Minnesota.
Digital products, such as music downloads or ringtones, as well as digital books and online games, would all fall under the sales tax law.
According to District 17 Sen. Lyle Koenen, who represents a majority of Ren-ville County and areas to the north and west, the sales tax on online purchases is intended to put pressure on the federal government to put into place stronger national requirements for sales taxes to be paid on Internet purchases.
“It’s a fairness issue,” said Koenen, adding it helps to level the playing field with Main Street businesses.
According to District 16 Sen. Gary Dahms, there are sales tax laws already in existence for Internet purchases, but most people don’t know about them.
Dahms added consumers are legally supposed to report any purchases made online when sales tax is not paid at the time they file their taxes, but, he added, most don’t.
One of the concerns for rural lawmakers, when it comes to the addition of any new tax, is the impact it has on businesses closest to the border with other states, and District 22 Sen. Bill Weber, who represents a portion of southern Redwood County, said he has already talked to business owners who have been told by their customers that when these taxes become law they are going to conduct more of their business elsewhere.
“We already have people going across the border, and the fear is this is only going to happen more with these new taxes,” said Weber, adding another tax added during the session could force some to leave the state altogether.
During the 2013 legislative session policymakers approved the creation of a new tax bracket with those heads of household with a taxable income of more than $200,000 and those married and filing jointly with a taxable income of more than $250,000 paying a new 9.8 percent rate.
Weber said he was told by an individual from northern Minne-sota he intends to move out of state be-cause of this new tax.
“This is not a border issue,” he said. “This is a statewide issue.”
In addition, the new tax increases mean another $1.60 in state tax on tobacco products sold in the state.
That brings the amount of state tax assessed in Minnesota on a pack of cigarettes to nearly $3.
Koenen said for many years he did not support this increase, but added his opinion changed as he studied the statistics which showed added taxes becomes a deterrent for buyers, especially amongst the youngest.
“This is a health issue,” said Koenen.
Dahms, who said everyone knows smoking is bad for people, added if the increased tobacco tax is really not about the revenue but is about improving overall health of the state why do the funds collected through the tobacco tax go into the general fund?
“Those dollars would be better used to create smoking cessation and health care programs,” said Dahms.
Other changes as a result of the 2013 legislative session include an increase in the per pupil unit finding for schools by approximately $78, with an added buy down of school levies.
That, said Koenen, is going to help property taxpayers by providing a little relief.
Nursing homes are going to see an increase of 5 percent in its funding, with those dollars primarily focused on providing raises for employees.
New policies requiring 1.5 percent of the states energy coming form solar power was approved, and Dahms said he believes this is in the end going to make energy more ex-pensive and less reliable for Minnesotans.
“As we go father into the year we are going to see more of the impact this session is going to have on the people of Minnesota,” said Weber, adding no one knows for sure all that is going to happen.