MinnPost reports that Governor Dayton dropped the controversial business-to-business tax, which would impose taxes on legal services.
Gov. Mark Dayton said in a speech Friday morning that he’s taking the controversial business-to-business tax — which had been much villified by many executives — off the table.
Speaking to the TwinWest Chamber of Commerce Legislative Breakfast at a St. Louis Park hotel, Dayton brought much relief to many business leaders there. State officials said it would have added $2.2 billion in state revenue by taxing business services such as advertising and legal advice.
MPR reported that Dayton said his initial budget proposal “obviously lacked public support” and that now “it lacks mine.”
Now, the anticipated new budget was set to be released on Tuesday, but it was delayed. Governor Dayton’s staff stated that it will released “later in the week” since the tweaking of numbers continues. You can read MinnPost article here.
via Gov. Dayton takes business-to-business tax out of his budget | MinnPost.
Like Governor Pawlenty, Governor Dayton now wants to create a legal services tax. The effect of such a bill would mean that the next time you or your client wants to seek a lawyer’s aid, in addition to paying the attorney’s fees, the client will need to pay a burdensome tax on legal services.
To reduce the budget deficit, this is what Governor Dayton proposed:
- Reducing corporate income tax from 9.8% to 8.4%. A huge drop of 1.4%.
- Governor Dayton stated that he wants to tax clothing that costs more than $100.
- Governor Dayton wants to tax the following services: legal, accounting, architecture, specialized design, computer, management consulting, advertising, employment and business support services.
Taxing legal services is a bad idea, which would significantly impact a population that cannot afford to get hit. And why is that? The legal services tax will be paid by the client.
So say, you are trying to fight foreclosure. The owner of the home will have to pay that tax. Or say, you are trying to fight a custody battle. The parent will have to pay that tax.
Imposing such a severe burden on the middle-class, as well as the lower-class, will inevitably have a chilling effect. In other words, the vast majority of Americans will no longer have a viable resource when exercising their constitutional rights.
The Minnesota State Bar Association shares this same viewpoint. In addition, the MSBA has also stated that the tax would be next to impossible to administer.
via Dayton unveils a legal services tax to fill budget deficit – MinnLawyer Blog.