The paragraph in Dayton’s budget plan is a subtle one:
3. Eliminate tax loopholes, such as the one allowing “Snowbirds” to live outside Minnesota for six months and one day of the year, and pay no personal income taxes in this state. I would ensure that anyone who spends a significant amount of time in Minnesota pays taxes in Minnesota.
So the State of Minnesota is going to define what a “significant” period of time is. and stake a claim to income, property and other non-user fees during that (undefined) time?
The state treasury should not line up to cash that check just yet. It’s going to be in court for a while, duking it out over interpretations of the Commerce Clause; let’s not forget the suit over Equal Protection clause issues.
It’s going to be a full-employment program for tax lawyers, and that’s after all the ConLaw people get their cut.
Coming up at 2PM: What happens when a “plan” is really just a mish-mash of ideas that at best will never be adopted, and at worst will make a bad situation worse?
Check out the Dayton Budget “Plan” for yourself! Find another howler? Leave it in the comments!
I suppose that the merchants, restaurateurs, etc. in Florida and Texas will also appreciate the extra business from the snowbirds who tell Dayton to piss up a rope and sell their residences here, too.
We did a perfectly legal end-run around all this in Vermont: a state-wide property tax.
Think about it, you can’t vote if you’re not a resident. So if the Democrats in charge were to raise the property tax rate to Dayton-ian levels then “rebate” to residents via a homestead exemption they’d screw non-residents and “the rich” who have 2 houses.
Works great. Unless you own a vacation home, of course, since the value of a second home will crash and the owner won’t be able to unload it at nearly what they paid for it. But hey, if you own two homes you’re rich and deserve getting screwed in Democrat doctrine. And it gets around the risk of having to rebate income tax if the lawyers in the AG’s office get their clocks cleaned in Federal courts.
Brave Sir Mark should just dictate that no one be allowed to leave the state without permission, and for a limited period of time.
But hey, if you own two homes you’re rich and deserve getting screwed in Democrat doctrine
Not to mention punishing those cabin-owning heathen who increase their carbon footprint untold multiples by driving every weekend between house and cabin in their gas-guzzling, environmental catastrophes pulling their freshwater destructo-machines (ski/fishing boat behind the Tahoe/Expedition/Ram).
Serves em’ right.
(the leftist emotional tantrum IS kinda fun, actually, when you don’t really believe in it or suffer actual negative emotions from it)
I wonder how he will handle all of the people that register their cars in WI using their lake or vacation home’s address, yet their cars are in MN most of the time? Jesse Ventura made an issue of that and there was about a six month crack down where local police departments ticketed anything with WI plates on it.
Another point to ponder; how will he handle all of those non-resident college students or other transplants that don’t register their cars here, even after they have exceeded the visitor’s time period?
I don’t have a problem with the state defining times for purposes of tax law or legal residencey for that matter; it defines time periods in law appropriately fairly often. Better to have a time defined than not defined; ambiguity is not desirable in tax law.
When Mitch writes “So the State of Minnesota is going to define what a “significant” period of time is. and stake a claim to income, property and other non-user fees during that (undefined) time?”
No. The State of Minnesota, through the appropriately elected legislators who actually make the laws (not the governor), should define a term that is apparently ambiguous to be more clear and specific. In doing so, the state of MN would appropriately match and connect that taxation to the benefits and costs of someone spending time in MN, and making Minnesota their state of residence.
This seems to me to be a very similar argument to the criticism recently directed at Senator Kerry for keeping his very expensive yacht docked in a location which cost him less money, depriving his home state of that revenue. I have the same opinion of tax loopholes which allow the use of off-shore tax dodges in places like the Caman Islands avoiding paying appropraite and proper and fair taxes here in the U.S.
I don’t find it ‘fair’ for someone to consider Minnesota their state of residence, and then dodge completely the taxes in this state by living somewhere else for six months and one day. Especially if those same people are also dodging paying any taxes in the state where they are a ‘snowbird’.
Perhaps a more fair arrangement would be for snow birds to pay a pro-rata share of taxes for the time they are here, and a pro-rata tax to their snow bird state(s) for their time there. But NO tax, while calling this their state of residence ? No, that is NOT fair. Dayton is on the right track with this one, despite any hysterical spin attempts to the contrary.
DG,
I didn’t cite that court case just to hear my fingers tapping.
just to hear my fingers tapping.
On the other hand, that is all that keeps DogPrescottPile from going rabid.
DG, you’re welcome to try and change the law, but I believe Mitch’s point is that Dayton will have a lot of trouble trying to get income tax from folks who spend the majority of their time in another state. Which is why I noted how we
screwed out of statersovercame the problem in Vermont.If you spend six months and a day here, you’re a resident here and owe taxes here.
If you spend six months and a day in Florida, you’re NOT a resident here so you don’t owe taxes here, you owe them in Florida.
Except if Mark Dayton has his way. He’d upset that arrangement to say “Step foot in the state and get out your checkbook, baby.”
I don’t think it’s going to be that easy. For one thing, what if other states followed suit? Nobody dares leave their home state anymore, lest they owe taxes to every state they visit? Talk about paralyzing the national economy.
.
The other thing to remember, DG, is that anyone who has both the means and the financial savvy to maintain residences in multiple states won’t just accept being taxed because Mark Dayton wants to do it.
So let’s think about this. A snowbird couple, retired and financially comfortable in their retirement, lives in Minnesota for just long enough to avoid state income tax. But while they are here, they patronize local businesses — there’s a cozy trattoria in the neighborhood and they go there a few nights a week. Meanwhile, they do pay taxes – sales taxes, property taxes, various fees and the like.
Dayton comes after the snowbird couple for more dough. They leave and sell their home to a young couple. The young couple, at least for a few years, is likely to be house-poor. They don’t have the discretionary income the snowbirds do, so the local businesses benefit less from their presence than they would if the snowbirds were around. Does the trattoria come out ahead? Does the state come out ahead?
I am not sure what Dayton expects this to accomplish. Most of the “snowbirds” are retired and their income — what there is of it — is hard to tax. They don’t make much frm social security or pensions and they have deductions.
There may be millionaires coming up to reside in MN between Memorial Day and Labor Day, but how much income do they make in Minnesota? Or does Dayton intend to tax people on income earned out of state?
I assume that there are some migrant agricultural laborers who work & earn money in Minnesota, but are not residents for tax purposes. Does Dayton intend to tax them?
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