Dayton scraps MN sales tax proposal

Jessica Lee

Gov. Mark Dayton's proposal to expand the state's sales tax was scrapped and he wants to increase income taxes on the wealthiest of Minnesotans to make up the difference in revenue.

The latest budget plan presented Thursday, which is a much milder version of the DFL governor's plan that was announced in January, increases cigarette taxes, closes corporate tax 'loopholes', implements a 'snowbird' tax and raises about $1 billion from income taxes to fix the state's looming $627 million deficit.

"It's not as bold as it was before. I talked about plan A, B and C. This is plan B-plus, I'd say," Dayton said, according to MPR.

Dayton's revised proposal would be a 7 percent increase in current spending and keep the state's investment priorities, like education and economic development, consistent.

The latest plan doesn't include the $500 property tax rebates for homeowners like the DFL governor proposed in January.

According to the Star Tribune, Dayton said he is unsure that the 'snowbird' tax will pass this year. It would force people who live in the state for less than six months a year to pay Minnesota taxes.

Republican legislators said spending cuts would be a better route than increasing income taxes, but they were relieved that Dayton dropped his sales tax expansion proposal.

A budget outline crafted by DFL legislators will likely be released next week with some of the governor's recommendations, according to MPR.