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Roger of Shakopee asked: Does Gov. Mark Dayton's proposal to cut the state sales tax rate to 5.5 percent include the 0.375 percent tax for natural resources and the arts approved by the voters in 2008?
The answer is yes, said Ryan Brown of the state Department of Revenue. Dayton's proposal would take the base sales tax rate from 6.5 percent to 5.266 percent, and allow for a pro-rated reduction of the so-called Legacy Amendment tax rate to 0.234 percent. The combined total is the new 5.5 percent rate Dayton seeks from the 2013 Legislature. It would be the first rate reduction since the sales tax was instituted in 1967.
The Legacy Amendment anticipated a change such as Dayton proposes. It allows for the adjustment of the rate when the tax's base is altered "in order to provide as close to the same amount of revenue as practicable" as the original tax would have raised.
Roger had a second question: Would Dayton's proposed $500-per-homestead property tax rebate be in addition to, or a replacement for, the existing property tax refund (PTR) program?
It's in addition to the PTR and all other existing state measures to restrain or reduce property taxes, Brown said. Unlike the PTR, Dayton's proposed rebates would not be means-tested. That means that in some parts of the state, the rebate would pay down half of a typical homeowner's bill, while in Minneapolis and St. Paul, the dent would be small.