The state’s legislature has been debating ever-important tax credits and unemployment benefits.
Minnesota Lawmakers Spar over Small Business Tax Breaks
Minnesota lawmakers are grappling with how to spend the state’s $900 million surplus, and small business owners are anxiously awaiting to see how new legislation might—or might not—help them.
The House passed a relief package for unemployed Iron Range workers that extends benefits for another 26 weeks, but they also tacked on a tax credit that would give approximately $258 million dollars to small business owners. The money would come from Minnesota’s unemployment insurance trust fund, and many senators do not want the tax break included in the bill.
“Now is the time to provide a beneficial tax credit to the employers who fund 100 percent of this system,” NFIB/Minnesota State Director Mike Hickey wrote in a statement to the House.
The tax break would reduce taxes by 25 percent from what owners paid in 2015, Hickey says. It’s also fiscally responsible to make sure the fund doesn’t get too high, he says. The trust currently holds $1.6 billion, and it is projected to climb as high as $1.8 billion in the near future. The House passed the measure, including the tax break, by a 104-25 vote, and it will now go to the Senate for consideration.
One item that has yet to be debated: the estate tax. Business owners want to raise the exemption to the federal level of $5.45 million, well above Minnesota’s current rate of $2 million.
Many business owners would also like to see a reduction in taxes for commercial properties. Minnesota’s property tax burden is the second highest in the country in rural areas and sixth highest in urban areas, according to the Star Tribune. But those votes won’t come until the end of the session, Hickey says.