Minnesota: State general property tax

The state general property tax in Minnesota was enacted in 2001 as part of a broader package of property tax reforms that included class rate reductions, the state takeover of transit levies, and replacement of the state-determined school district general education property tax with direct state-aid payments. Prior to 2002, the last levy of a Minnesota statewide property tax was in 1967.

According to "Minnesota Tax Handbook, 2006" (p. 42), the state general property tax has the following features:

• Tax Base: Net tax capacity of commercial-industrial, public utility, railroad, mineral, and seasonal recreational property. Net tax capacity is the estimated market value multiplied by the net class rate. For seasonal recreational property, the class rate for the first $76,000 of market value is 0.4% rather than 1%.
• Rate: Tax rate is determined annually to equal the mandated levy. The levy was $592 million for 2002 and for subsequent years is increased by the rate of increase in the implicit price deflator for state and local government consumption expenditures and gross investment. Of the total amount, 95% is levied on commercial- industrial property and 5% on seasonal residential recreational property.
• Exemptions: Electric generating public utility machine