Snowbird tax faces opposition
BEMIDJI – An income tax on people living in Minnesota for less than six months out of the year is one of the more contentious features of Gov. Mark Dayton’s budget proposal.
But for Dayton, it’s a matter of fairness.
Dayton, who included the provision in his revised budget released Thursday despite some practical questions about its implementation, said it’s meant to adequately tax people who use the state’s services but avoid income taxes when they travel to warmer climates in the winter.
“I just don’t think that’s fair,” Dayton said in a conference call with reporters Friday. “But again, if we can’t work out the unintended consequence of affecting people coming to Bemidji, coming to north central Minnesota or other parts of the state for summer homes…then the Legislature’s not going to be very supportive.”
Lisa Paxton, chief operating officer of the Brainerd Lakes Chamber, said the so-called “snowbird” tax would negatively affect the local economy. She said in Cass County has 11,000 seasonal recreational residential properties, and more than 14,000 in Crow Wing County.
“And a portion of those are owned by out-of-state owners,” Paxton said. “And our region benefits tremendously from the impact of our seasonal homeowners.”
Under current law, people who live in Minnesota for at least six months out of the year must pay an income tax. Paxton pointed out that even if people live here for less than that, they still contribute property taxes.
“We’re concerned about singling out that important segment of our economy, when I’m not aware of any other state that does that,” Paxton said. “And then how do you police that?”
Paxton said she knows people who are putting off construction plans at their home until they know what will happen with the snowbird tax.
On Friday, Dayton’s Revenue Commissioner Myron Frans acknowledged some technical questions still exist.
“We’ve got to be careful and listen to people in the industry out there, especially in your area, and make sure we do this in a way that doesn’t hurt the hospitality industry,” Frans said. “But we’re looking at some ways to do that.”