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Farm tax cancellation not part of special legislative session

ST. PAUL -- Farmers will have to wait to see if legislators will overturn a new tax they pay.

Legislative leaders and Gov. Mark Dayton this morning could not agree on doing any more in a special session than approving less than $5 million in disaster relief. Before today's meeting, everyone seemed to think that a new sales tax on farm implement repair should be canceled.

However, Senate Majority Leader Tom Bakk, DFL-Cook, said Republicans would not sign an agreement setting up a special session with just one tax overturned.

Gov. Mark Dayton had said he wanted the farm tax, which costs farmers $2 million a month, to be retroactive, so taxes paid so far would be refunded.

The farm implement tax issue could come up when legislators return to regular session on Feb. 25.

The special session will begin at 10 a.m. Sept. 9 and last less than a day, as legislative leaders explained it. It will deal with appropriating an estimated $4.5 million as the state's share of flood and storm recovery spending.

Federal funds are to take care of most recovery needs for local governments in 18 counties affected by June 20-26 storms and floods.

The Obama administration issued a disaster declaration for Benton, Big Stone, Douglas, Faribault, Fillmore, Freeborn, Grant, Hennepin, Houston, McLeod, Morrison, Pope, Sibley, Stearns, Stevens, Swift, Traverse and Wilkin counties. Preliminary surveys show nearly $18 million in damage to public infrastructure.

House Speaker Paul Thissen, DFL-Minneapolis, first suggested that the farmer tax, which began July 1, be repealed during the special session. Bakk and Dayton soon agreed.

Republican leaders also said the tax should be repealed, but wanted a variety of other new taxes also killed.

Prime among the GOP targets was a tax due to begin in April on goods stored in warehouses. Republican and business leaders said the tax, even though it has not begun, was forcing some firms to delay business decisions.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.