FFM was featured in a Pioneer Press article on Governor Dayton’s plan to tax snowbirds. FFM released a study last March on Taxpayer Migration from Minnesota. The study is more relevant now than ever as officials, legislators, and the governor look for ways to balance the budget.
Said Annette Meeks, FFM CEO: “”If they say they are going after snowbirds, good luck, because they have really good tax attorneys.”
Read the entire article below or on the Pioneer Press website.
Dayton targets snowbirds for taxes
Closing loophole could net $15M, official predicts
By Dennis Lien
Besides the warm weather, the beaches, and the perpetually sunny skies, there’s another reason some Minnesotans flee south: no or lower taxes on pensions, Social Security and other types of income.
Now Gov. Mark Dayton wants to keep those taxes here.
As part of a budget proposal Tuesday, Dayton proposed eliminating a loophole that allows Minnesotans to live outside the state for at least six months and one day of the year and pay no personal income taxes in Minnesota.
No one seems to know how many such people exist, some of them wealthy, or how much money could be recouped. But Dayton said they are out there. “I could name a few,” he said.
His assistant revenue commissioner said the change could bring in $15 million to help the state solve its projected $6.2 billion budget deficit. But Dayton thinks the return is even higher.
“I think that’s very conservative based on the people I know,” he said.
Even state demographer Tom Gillaspy isn’t sure how many people would be affected.
“That is one of those things there isn’t very good information about,” Gillaspy said.
Lots of people, he noted, go elsewhere for varying periods. “The problem gets to be, when does it cease being a vacation or a brief sojourn and becomes … a change of address?” he said.
Annette Meeks, the running mate of Dayton’s Republican opponent last fall, Tom Emmer, is chief executive of Freedom Foundation of Minnesota.
She said a foundation-sponsored study of whether people left Minnesota because tax rates are unfriendly shows people regularly left for less-taxing destinations such as Florida, Arizona and Texas. It indicated that between 1995 and 2007, those people earned at least $3.7 billion on which state and local governments would have collected an estimated $423 million in additional taxes, she said.
Meeks, however, conceded the study didn’t break out how many stayed just long enough to avoid Minnesota taxes or moved away permanently.
But she warned that getting those taxes might not be so easy.
“If they say they are going after snowbirds, good luck, because they have really good tax attorneys,” Meeks said.
Just shifting to another residence for a prescribed period to avoid higher taxes in Minnesota simply isn’t right, said Dayton, who didn’t explain how or whether the state could track down these people.
“Again, it’s important that everybody pays a fair share,” said Dayton, adding he knows people who are advised by their accountants to live outside the state barely more than the six-month period and then return to their Minnesota residences and use services here for the rest of the year.
“That’s just really wrong and unfair,” he said. “So it’s a matter of principle as well as revenue.”
Dennis Lien can be reached at 651-228-5588.