Minnesota less business-friendly on property taxes - The Co$t of ...

Minnesota is moving up the rankings, but not in a good way: Its business property taxes are increasingly becoming some of the highest in the country.

The Minnesota Taxpayers Association and the Cambridge, Mass.-based Lincoln Institute of Land Policy produce an annual 50-state property tax comparison study.

Look at the study for the 2010 tax year and then?compare with 2011. Minnesota rose in the rankings when it came to the taxes that a commercial property owner paid in a typical urban area or a typical rural area.

When it comes to the amount of property taxes paid for industrial properties, Minnesota still benefits from not taxing personal property such as machinery and equipment. But even when it came to taxes on industrial properties, Minnesota was up among the states.

The Republican-led state Legislature earlier this year passed a bill providing property tax relief for businesses. But the state?s DFL Gov. Mark Dayton vetoed it, saying lawmakers had not come up with a way to pay for it in future years.

Republican lawmakers are not blameless in the situation, either. Their decision in 2011 to do away with the market value homestead tax credit, which provided state relief for owners of lower-valued homes, helped contribute to rising property taxes for business owners.

Here are some examples of how Minnesota?s ranking changed in the past two years when it came to property taxes paid by various types of commercial building owners, along with the typical taxes paid:

Urban commercial property valued at $100,000, with $20,000 in fixtures

2010: 18^th, $2,671

2011: 13^th, $3,055

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Urban commercial property valued at $1 million, with $200,000 in fixtures

2010: 10^th, $33,764

2011: 5^th, $38,608

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Urban commercial property valued at $25 million, with $5 million in fixtures

2010: 8^th, $873,993

2011: 4^th, $999,328

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Urban industrial property valued at $25 million, with $12.5 million in machinery and equipment, $10 million in inventories and $2.5 million in fixtures

2010: 15^th, $873,993

2011: 10^th, $999,328

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Rural commercial property valued at $1 million, with $200,000 in fixtures

2010: 13^th, $26,563

2011: 6^th, $32,414

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Rural industrial property valued at $1 million, with $500,000 in machinery and equipment, $400,000 in inventories and $100,000 in fixtures

2010: 17^th, $26,563

2011: 13^th, $32,414

Tags: commercial property taxes, industrial property taxes, Lincoln Institute of Land Policy, Minnesota, Minnesota Taxpayers Association, property taxes

Source: http://finance-commerce.com/bizcost/2012/08/minnesota-less-business-friendly-on-property-taxes/

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