Sales tax rebates include dependents for the first time

Patrick Hayes

Gov. Jesse Ventura announced Monday 2.4 million sales tax rebate checks are in the mail, and unlike last year, dependents — including many working college students — will be included.
Students who lived in Minnesota for at least part of 1998 and were claimed as dependents can expect 35 percent of what they would get if they were independent filers.
Currently, 131,000 dependents are going to receive a rebate of $40 on average, said Rebate Project Manager Joe Lefto. Dependents still have until Nov. 30 to file the income tax returns to be eligible for the rebate.
People should start receiving checks immediately and additional checks will be sent over the next three weeks, Lefto said. If checks have not been received by Aug. 1, contact the revenue department.
“Even if your neighbors have theirs but you don’t yet, be patient,” Ventura said in a statement. “The checks are going out in waves, so yours will be coming.”
Last summer most college students did not receive rebate checks because analysts determined most dependent’s expenses were paid by their parents, said Paul Moore, a Ventura spokesman.
The state Legislature decided to include dependents in this round of rebates as a result of complaints last year.
“We felt there (were people) that were left out that should not have been,” said Senate Majority Leader Roger Moe, DFL-Erskine.
The state determined that although some dependents are supported by their parents, they are still spending a significant amount of money on sales tax at stores, Moore said.
Because more people are eligible this year, the rebates are smaller. Last year, any Minnesota resident who had a taxable income of $1 and could claim a property-tax rebate on their 1997 income tax return was eligible.
This year the pool of eligibility was expanded to include state assisted filers, Social Security and railroad retirement recipients, in addition to dependents.
As a result, 400,000 more people will share the $635 million rebate this year, said State Revenue Commissioner Matt Smith in a press release.
For the fourth year in a row, the state issued rebates from a $1.3 billion budget surplus. Minnesota took in higher than expected revenue collections last year from a variety of state taxes and fees, including the sales tax, Smith said.
The rebates were determined the same way as last year, using the Department of Revenue’s Tax Incident Study, Smith said. Based on information in the study, the average sales tax paid was estimated by each person’s income level.
Many students will only receive 35 percent of an independent’s rebate because analysts determined 65 percent of dependents’ support comes from their parents.
As for next year, Ventura said unofficially Monday there is already a surplus and a good chance for a rebate next year.
However, it will have to be approved by the Legislature.