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By Don Davis, Published August 08 2013

Special session could dump ag tax

REDWOOD FALLS, Minn. -- Gov. Mark Dayton says he is willing to overturn a new sales tax on farm implement repair when the Legislature next month meets to appropriate money for disaster relief.

Dayton told reporters after he spoke at Farmfest today that he and legislative leaders are looking at a Sept. 9 special session to provide state funding for local governments in 18 counties that were affected by late-June storms and flooding. The money would match federal funds being sent to help local governments rebuild.

While Dayton had insisted that only disaster relief be considered during the one-day session, he said he now is willing to allow lawmakers to overturn the farm tax.

Revenue Commissioner Myron Frans said farmers are paying $2 million a month in the sales tax on farm implement repairs. The tax took effect July. 1.

Dayton called it a bad tax; it was inserted into a bill being debated during the Legislature’s last moments. Other services that are taxed under the new law would not be affected by the special session action, Frans said.

Rep. Paul Torkelson, R-Hanska, was happy with the possibility that the tax will be removed from law.

“They never should have been put in the law in the first place,” Torkelson said.

House Minority Leader Kurt Daudt, R-Crown, said Dayton's reversal in seeking to overturn the tax showed that “just one month after Democrats’ new taxes took effect, they are now admitting Republicans were right."

Torkelson was disappointed that another tax likely will remain on the books until lawmakers return to St. Paul for their next regular session in February. That is a tax on things farmers and businesses store in warehouses.

Since the tax does not begin until April, Dayton said there will be time next year to remove it. Still, he said, if someone comes up with a way to replace revenue obtained with that tax, he could be convinced to include that in a special session agenda.