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REFORM BUSINESS <br /> TAXATION <br /> • <br /> Minnesota now emphasizes taxation of business inputs through saes <br /> highest business real property tax rate in the U.S. and frequent <br /> taxation of capital equipment purchases <br /> • Taxiing business inputs heavily is bad strategy in a global economy <br /> with great capital mobility <br /> • Reform drastically cuts taxation of business inputs <br /> • Reform increases taxation of business outputs <br /> Business Tax Cuts <br /> Business property taxed at fiat 3% rate after two year transition <br /> • Sales tax exemption for capital equipment broadened <br /> • Repeal of corporate AMT, minimum tee, income tax on insurance <br /> companies and property tax on utility personal property <br /> • Dividends paid made deductible and dividends received taxable <br /> • Business-to-business services now subject to.sales tax are exempted <br /> • Business-to-business services exempted from broadening of sales <br /> tax base toconsumer services <br /> • Businesses benefit from reduced sales tax rate Just like individuals <br /> Business tax increase from business activities tax <br /> • Set at 1% of sum of Minnesota real property <br /> rental income, <br /> Minnesota mineral royalty income and apportioned gross margin <br /> ® 1% may be too high. Rate could be 1/2% <br /> • Michigan style <br /> • operational VAT is an alternative to BAT <br />