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Minnesota governor wants new tax on trucking

| March 04, 2013
great dane

If Minnesota Gov. Mark Dayton gets his way, a 5.5 percent tax would be applied to freight each it time it is transported.

New data and opposition to Minnesota Gov. Mark Dayton’s proposed budget might impact his plan to institute a 5.5 percent sales tax on trucking and other services.

The Democratic-Farmer-Labor party governor had proposed cuts to mitigate a $1.1 billion budget deficit forecast in November.  Dayton said he will release his revised budget plan March 11 that will be based on more recent numbers.

The initial data he received Feb. 28 indicated good news, Dayton said. “The projected deficit has been lowered by $463 million,” the governor said. “That’s a 42 percent reduction from what was predicted just three months ago.”

Dayton’s sweeping tax reform proposal includes some reductions, such as cutting sales tax rate from 6.875 to 5.5 percent. But that 5.5 percent tax would be implemented on business-to-business services currently exempt from it, which in trucking would tax freight each time it is transported.

A Feb. 27 House tax committee heard five hours of testimony on the plan. Educators and city officials who benefited from the changes spoke in support and businesses that would be hit by the 5.5 percent tax voiced opposition.

  • Bert Dixon

    Time to park ’em.

  • DanielMcCreary

    Hmmm…he might run into some issues unless he only plans to tax intrastate trucking. Aren’t there laws restricting states ability to regulate/tax interstate commerce?

  • Craig Vecellio

    Yep it’s called the U.S. Constitution. Regulating interstate commerce is under the authority of the Federal government. If he wants to tax intrastate business, like you suggested, that’s fine by me. I live in Pennsylvania.

  • Jim F

    Craig, unless it has changed, PA does tax it’s share of interstate transportation. When we use do intermodal work in and out of PA I was required to break down the PA portion of the income and pay income tax on it. It was a major pain.

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  • DanielMcCreary

    If that’s a law, most of us don’t abide by it and it’s not well enforced. I live in MD and hauled through PA consistently as an owner operator and haul into the state sometimes now on extra runs, and my income is considered earned in the state where I report to work, so I only pay taxes in MD. If I worked in PA and lived in MD, I would have to pay taxes in PA and then if PA’s taxes were lower than MD’s, I’d have to pay the difference between the two state’s rates. At least that’s how our accountant explained it to us.
    Now if you’re an owner operator, you do have to break down the miles you traveled and pay fuel tax for each mile you’ve driven in each state.

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