Promoting Tax Fairness for Minnesota Renters

The Minnesota Budget Project supports improvements to the Renters' Credit, which provides a property tax refund so that low- and moderate-income Minnesotans do not pay more than their fair share in taxes.

Issue Overview

The Renters' Credit provides a property tax refund to more than 300,000 low- and moderate-income Minnesota households, over one-quarter of which include seniors or people with severe disabilities. The Renters' Credit refunds a portion of the property taxes that renters have paid through their rents. The Minnesota Department of Revenue finds that the Renters' Credit and other refundable tax credits make a real difference in ensuring that low- and moderate-income Minnesotans do not pay more than their fair share in taxes.

Minnesotans report that they use their tax refunds to buy medicine or school clothes for their children, to pay bills, or for other basic needs.

The final budget passed in 2011 included a $26 million cut to the the Renters' Credit starting with credits filed in 2012. Nearly 300,000 Minnesota households lost an average of $87 because of this cut. About 7,300 Minnesota households lost their entire credits.

Status

The 2013 omnibus tax bill contained more than $15 million in improvements to the Renters' Credit in FY 2015. More than 79,000 currently eligible Minnesota households will see an average $152 increase in their property tax refunds, and an additional 30,000 households will become eligible for refunds.

The Renters' Credit improvements in the omnibus tax bill (House File 677, lead authors Representative Ann Lenczewski and Senator Rod Skoe) were originally developed as part of the House Property and Local Tax Division Report (House File 2, lead author Representative Jim Davnie).

This positive outcome is the result of a commitment to reducing property taxes for Minnesota's renters demonstrated by the House, Senate and Governor Dayton during the 2013 Legislative Session.

  • Governor Dayton's supplemental budget included $18 million in improvements to the Renters' Credit, which would have provided more than 300,000 Minnesota households with an average additional refund of $57. These improvements were also incorporated in the Senate omnibus tax bill (Senate File 552, lead author Senator Rod Skoe).
  • More than 50 members of the Minnesota House of Representatives were authors or co-authors of several bills that included improvements to the Renters' Credit, including House File 2 (lead author Representative Jim Davnie), House File 24 (lead author Representative Joe Mullery), House File 126 (lead author Representative Tim Faust), House File 173 (lead author Representative Will Morgan) and House File 1647 (lead author Representative Diane Loeffler).
  • Senate bills to improve the Renters' Credit included Senate File 1516 (lead author Kari Dziedzic) and Senate File 1583 (lead author Lyle Koenen).

More Information

Staff contact: Nan Madden, Minnesota Budget Project Director, 651-757-3084

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