On January 22, 2013, Minnesota Governor Mark Dayton released his proposal to address the $1.1 billion budget deficit in Minnesota and to increase spending initiatives. His proposals have significant tax implications, raising billions in new taxes. The following is an overview of certain key provisions relating to income tax; sales and use tax; corporate tax; property tax; miscellaneous tax; and state and local aids.

Click on each underlined provision below for detailed information.

Income Tax Provisions

  • New Fourth Tier of Income Bracket
  • Reduction in Number of Days for Part-Year Residence Test When Maintaining a Minnesota Abode

Sales and Use Tax Provisions

  • Sales and Use Tax Reform
  • Sales and Use Tax Rate Reduction
  • Sales Tax Upfront Capital Equipment Exemption
  • Seven-County Metro Area Tax

Corporate Tax Provisions

  • Corporate Tax Reform
  • Corporate Tax Rate Reduction

Property Tax Provisions

  • State Business Levy Reduction
  • Property Tax Rebate

Miscellaneous Tax Provisions

  • Increase Cigarette and Tobacco Products Excise Tax
  • Motor Vehicle Rental Tax - 2.85% Increase

Provisions on State and Local Aids

  • Local Government Aid Increase / New Formula
  • County Program Aid Increase
  • Levy Change Interactions - Income Tax and Property Tax Refund

What This Means For You

The Governor believes that his budget proposal will provide a more fair and balanced tax system and it will be introduced as a bill to be debated by the Minnesota Legislature.