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State's Commercial Tax Load Remains Heavy

ST. PAUL-A study by the Minnesota chapter of NAIOP shows the state's property taxes, while down due to tax reform efforts, are still the highest in the region.

By Jim McCartney | Updated on February 23, 2005

ST. PAUL-Although Minnesota’s commercial property taxes have gone down lately, they are still among the highest in the region, according to a new study released this week by the Twin Cities local chapter of the National Association of Industrial and Office Properties. The study shows that a typical 99-employee company in a 70,000-sf building paid $110,234 in Minnesota property taxes last year, down 11.5% from 2003, largely due to a drop in commercial property values and tax changes passed by state legislators nearly four years ago.

Meanwhile, a study by the Minnesota Taxpayers Association released last month shows a Minnesota urban commercial property with a constant value of $1 million faced taxes that put it in 14th place nationwide in 2004–that’s up from ninth in the previous study. Minnesota’s $110,234 tax bill compares with $63,264 in Wisconsin for a similar-size firm and space. Comparable tax bills in other states include $25,901 in North Dakota, $70,866 in Iowa and $97,796 in South Dakota, according to the study. Minnesota continues to have the top commercial real estate taxes among those states. For the first time since the survey was begun 18 years ago, Illinois topped Minnesota’s business property tax bill, at least in the Chicago area.

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