New Report: Minnesota Property Tax System Soaks Small Businesses

August 30, 2023

Commercial Property Taxes Much Higher Than Region, Nation.

New Report: Minnesota Property Tax System Soaks Small Businesses

A new report from the Minnesota Center for Fiscal Excellence (MCFE) shows that commercial property taxes in Minnesota are significantly higher than neighboring states and the national average. Read the report here: MCFE: State of Minnesota Property Taxes (fiscalexcellence.org). As detailed by MCFE, Minnesota’s property tax system strongly favors residential homes and apartments, while soaking commercial property owners at rates above the national average and far above the average for states in the Upper Midwest region. Using Glencoe and Minneapolis as example cities, MCFE shows the hefty property tax bill for an owner of a commercial property valued at $1 million:

Source: Minnesota Center for Fiscal Excellence As bad as the property tax disparity for commercial parcels is now, it will get worse going forward thanks to “reforms” enacted by Governor Walz and the DFL-controlled Legislature. This year’s Omnibus Tax Bill shifted more of the local property tax burden onto businesses by increasing the exclusion level for residential property. Minnesota’s property tax system includes “unique” features like the Statewide General Property Tax Levy, which can add 20% or more to a commercial/industrial property bill. It’s one of only 16 statewide property taxes in the country and the only one to exclusively tax all C/I property for general purpose appropriations. NFIB Minnesota has seen success in cutting the Statewide General Property Levy in recent years, and we will continue fighting to reduce the property tax burden on small business owners.