Gov. Mark Dayton wants to rely on new revenues from cigarette and corporate income taxes to help pay the state's share of a new Vikings stadium.As Bob Casey always reminded us, there's no smoking in the Metrodome, but smokers better get a puffin' to pay for the new building.
Myron Frans, commissioner of revenue, explained Dayton's plan to the Tax Conference Committee Thursday.
It would include two funding sources: approximately $24.5 million in one-time revenues from tax on the current cigarette inventory once the tax is increased. Dayton is proposing an increase from the current tax of $1.23 per pack to $2.52 per pack.
So, do you honestly believe that the state is only going to get "one-time revenues" for coffin nails? Not a chance. Why?
The second source would be to end what Frans called a "tax avoidance" strategy that corporations with sales in Minnesota and elsewhere take advantage of under current law. Currently, he said, some businesses are able to avoid Minnesota corporate income taxes by attributing Minnesota sales to affiliates in other states.Frans can say he'll close the loophole, but in truth he'll only be playing whack-a-mole with corporations who have the resources to hire clever finance people. The money he anticipates won't materialize, certainly not in the amounts he envisions. And then it'll be back to the smokers, assuming they don't start buying their smokes online, on the reservation or from smugglers.
The change, known as Minnesota Unitary Sales, would require reporting all those revenues in Minnesota, increasing a company's income taxes and revenues to the state.
Those revenues would be approximately $26 million in the first year and $20 million per year after that. The revenue would be used as the first backup plan for stadium financing, Frans said.
The money would be collected and deposited into the general fund, but would not be used for the stadium unless needed, Frans said.
Nope, darn the luck, the money is going to come out of the general fund. Dayton and the gang can deny it until the cows come home, but that's how it's going to be. But on the bright side, you have three years to save up the coin to pay for a personal seat license in the People's Stadium.
|One Year Later, Still in Your Wallet|