HF3122 - Tax Relief Bill Summary

• Income Tax Relief: Updates Internal Revenue Code reference from April 14, 2011 to December 31, 2013; makes temporary adjustments to itemized deductions, personal exemptions, and standard deduction differences effective for 2013 tax year only, preventing collection action for taxpayers using the old code.

• Sales and Use Tax Changes: Removes taxable services (repair/maintenance, storage/warehousing) effective March 31, 2014; exempts live/prerecorded presentations accessed digitally if participants can interact; adds telecommunications equipment exemption; increases nonprofit fundraising sales exemption threshold from $10,000 to $20,000.

• Estate Tax Reform: Increases estate tax exemption thresholds progressively from $1.2 million (2014) to $2 million (2018+); replaces prior tax calculation method with new rate schedules; eliminates gift tax; allows QTIP election for Minnesota purposes independent of federal election.

• Angel Investment Credit: Increases total credit allocation from $11-12 million to $27 million (2014-2015) and $15 million annually (2015-2017); extends program sunset from 2014 to 2016; adds exception to three-year holding requirement if investor dies.

• Property Tax/Other: Excludes production equipment used for biofuels, wine, beer, distilled beverages, and dairy products from real property definition effective 2015; provides four-year phase-out transition aid to local units losing tax capacity from this change.