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Farmers await clarity on how tax bill affects them

ST. PAUL – Farmers are not sure how much more they will be taxed after the Democratic-controlled Legislature adopted a $2 billion tax increase.

It appears that farmers will pay sales tax on fertilizer stored in facilities they do not own and on equipment repair, but not parts. Rural legislators said they remain uncertain what else could be taxed.

Rep. Rod Hamilton, R-Mountain Lake, arose during late Sunday debate on the legislative tax bill to question the impact on agriculture.

House Tax Chairwoman Ann Lenczewski, DFL-Bloomington, said she is not a farmer and could not answer all of Hamilton’s questions.

“Our intent is to take another look at this,” Lenczewski said.

The tax provisions do not begin until April, giving lawmakers a chance to change the law after they return to session Feb. 25.

“I think we understand some of the complications here,” Lenczewski said after hearing from Hamilton and other rural Republicans.

Legislators began debate soon after the tax bill was released. Once Hamilton saw the potential agriculture impact, he began contacting farm groups, which expressed their concern.

Democrats, however, said there is enough good in the tax bill for farmers that the added tax should not hurt them.

“I do know what they are going to benefit from in this bill,” Rep. Paul Marquart, DFL-Dilworth, said, including lower property taxes.

Marquart said the bill boosts county and township assistance, which should lower property taxes.

Rep. Joe Radinovich, DFL-Crosby, said farmers are concerned about their overall community and new taxes are helping programs such as in education.

Rep. Erik Simonson, DFL-Duluth, said his community warehouses taconite, wind turbines and other goods that would be taxed under the bill. Even so, he said, he supports the new tax.

Red Wing Shoes could face problems with the new tax, said Rep. Tim Kelly, R-Red Wing. The company needs a new warehouse, he said, and it could be built in Missouri.

“If they put that warehouse in Missouri, where do they expand their business?” Kelly asked. “Where do they make more shoes?"

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