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Dayton backs repeal of equipment repair sales tax

By Carol Stender
cstender@agrinews.com

Date Modified: 08/21/2013 7:49 AM

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GILFILLAN, Minn. — Gov. Mark Dayton is willing to include a repeal of the new equipment repair sales tax in a possible special legislative session agenda.

Dayton made the comment at Farmfest on Aug. 8, as he called the repair tax a "bad mistake" that was passed in the waning hours of the Legislature's regular session. He has talked to Senate Majority Leader Thomas Bakk, DFL-Cook, and House Speaker Paul Thissen, DFL-Minneapolis, about a possible Sept. 9 date for the special session.

The decision was a shift from a few days earlier when he said the one-day special session would focus only on storm damage relief for 18 counties.

Thissen said he'd like to repeal the farm equipment sales tax in the special session. The sales tax went into effect July 1 and is projected to raise about $28 million over the biennium. The hole in the budget could be fixed without raising other taxes, he said.

Not so for the warehouse tax, which doesn't take effect until April 1, 2014.

The warehouse tax is projected to raise $180 million over the biennium, said state Revenue Commissioner Myron Frans.

The warehouse tax loss would have to be offset, Thissen said.

Dayton said he also would like to repeal the warehouse tax, but that doesn't take effect until next year giving lawmakers time to fix it in the regular legislative session.

Minnesota Farm Bureau president Kevin Paap and Minnesota Farmers Union president Doug Peterson agree that the machinery repair and warehouse taxes need to be repealed.

Some farm machinery repair business owners have been confused about when to implement the repair tax and what it covers.

Discussions have occurred to make the repeal retroactive, Peterson said.

Rep. Paul Torkelson, R-Hanska, is concerned about the warehouse tax. Some companies are considering moving to neighboring states if nothing happens to the warehouse tax repeal.

The plan is to have an agreement on the scope of the special session before it begins so lawmakers can return to St. Paul for a quick session, Thissen said.