Site Value Tax Bill Introduced in Minnesota

Nadine Stoner

[Reprinted from GroundSwell, March-April 2007]

Rich Nymoen of St. Paul, MN has informed GroundSwell of the introduction of HF 962, authored by Rep. Ann Lenscewski who is the new Tax Committee chair. She has been a long time supporter of the Land Value Tax concept and introduced the bill at the request of another long time supporter, Bloomington City Council Member Steve Elkins. HF 962 is the same legislation that has been introduced off and on since 2001. It seeks to shift the state (not local) Commercial and Industrial property tax entirely onto land value over 10 years.

The summary of the bill reads:

H. F. No. 962, A bill for an act relating to taxation; converting the state general tax on commercial and industrial properties to a site value tax; authorizing the commissioner of revenue to promulgate standards for determining site values and to reallocate the portion of estimated market value attributable to land; amending Minnesota Statutes 2006, sections 270C.85, subdivision 2; 270C.88, subdivision 1; 275.025, subdivision 4, by adding a subdivision. Statute 275:025, subdivision 4 reads in part:

For taxes payable in 2010 and later years, the portion of the state general tax levied on commercial-industrial tax capacity and commercial-industrial land value must be divided into a commercial-industrial tax capacity share and a commercial-industrial land value share as follows. For taxes payable in 2010, 90 percent is apportioned to regular commercial-industrial tax capacity and ten percent to commercial-industrial land value. In each succeeding year, an additional ten percentage points of the commercial-industrial share is shifted from commercial-industrial tax capacity to commercial-industrial land value. For taxes payable in 2019 and thereafter, the full amount of the commercial-industrial share is levied upon commercial-industrial land value. For each of the three component shares of the state general levy determined in paragraphs (a) and (b), the tax must be distributed among the counties by applying a uniform statewide rate to each county's tax base for the relevant class.

The bill was read for the first time and referred to the Committee on Taxes.

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