30 Days Left In 2023 Minnesota Legislative Session

April 18, 2023 Last Edit: June 5, 2025

Taxes, Fees, Mandates Still Up In Air

30 Days Left In 2023 Minnesota Legislative Session

Two of the greatest features of our state constitution are the limitation on days that the legislature can meet and the mandatory adjournment date. The Minnesota Constitution limits the legislature to no more than 120 days in each two-year legislative cycle and requires them to complete their work no later than the first Monday following the third Sunday in May. These limits protect small businesses and citizens generally from the unlimited number of bad ideas that float around every year. It’s especially important in a year when there is no check on single party control. This year, the legislature must finish its work by May 22. That means there’s about 30 days left in the 2023 Minnesota Legislative Session. Big ticket items for small business, including the Paid Sick Time mandate and Paid Family and Medical Leave program, remain unpassed but in play. Below is a recap of where key issues stand. Paid Family and Medical Leave: The Senate and House versions are on their last committee stops. From there, the bills will go to the respective floors for full votes and, presumably, a conference committee to reconcile differences – and hopefully make meaningful changes. Both versions remain unmanageable for small businesses: House total paid leave weeks is 24/year, Senate total paid leave weeks is 20/year. Both still have a very high wage replacement rate that will drive up the cost of the program and make it more enticing for employees to take longer leaves. Some lawmakers who support the program are starting to realize how expensive and dysfunctional the bill will be. We examined some of the PFML financial details in this e-news post. But many lawmakers struggle to comprehend the workforce impact of the bill because they have no experience managing or running a business. Our anti-PFML issue campaign and action alert is still live. Contact your lawmakers TODAY: Stop St. Paul’s Billion Dollar Payroll Tax Hike On Small Businesses – NFIB. Other Small Business Mandates: The six-day paid sick leave mandate passed the House in February but is still awaiting action on the Senate Floor. A total noncompete ban is moving in the Senate, and a partial noncompete ban (for those under $130,000/year) is moving in the House. We oppose both versions, but are pushing for any version to exempt other non-solicitation and trade secret agreements and still allow noncompetes in certain situations, such as part of a business sale. Another mandate moving removes the small employer exemption from unpaid pregnancy leave and nursing mother rooms. Currently, the unpaid pregnancy leave does not apply to businesses with 20 or fewer and businesses with fewer than 15 employees do not have to provide separate lactation rooms. A bill that would allow the Minnesota Department of Labor and Industry to ban natural gas, propane and other fossil fuels in new and existing buildings is still moving in the House. The Senate version was amended to a heightened efficiency standard for new construction that takes effect in 2036. Taxes. The House Taxes Committee released and passed its omnibus tax bill this week. The Senate, which has been cooler to tax increases, is likely to release its tax bill in coming days. The House Tax Bill includes: Worldwide Subsidiary Combined Reporting, which raises about $1.2 billion in revenue over the next four years. 5^th Tier Income Tax Rate of 10.85%, which applies to single filer income over $600,000 and married joint filer income over $1,000,000. This raises about $1 billion in revenue over the next four years. Limitation on Excess Business Losses, which conforms with changes in the federal American Rescue Plan Act, and raises $69,000,000 over the next four years. The bill includes a number of tax credits for individuals, largely aimed at lower income working families. It also includes a shift to the renter’s property tax refund, which will now be available as a refundable credit. Collectively, these account for over $2.5 billion in outlays over the next four years. About $1.25 billion goes to one-time rebate checks of $275 for singles (under $75,000 in income) and $550 for married couples (under $150,000 in income). While the bill makes an important change to expand the utilization of the relatively new Pass Through Entity Tax, there is no other direct relief for small businesses. More Taxes and Fees. On a positive note, the Senate all but killed the 75-cent retail delivery fee proposal That fee would apply to all retail deliveries of products which are already subject to the sales tax (including when non-sales tax items are in the order) and would have raised about $200 million per year. However, it remains alive and moving in the House Transportation Omnibus. There’s also a combined increase in the metro sales tax rate of 1%, with proceeds going to housing subsidies and transportation (largely transit). We have an action alert running in opposition to tax hikes. You can share or fill it out here. Healthcare: A very complex, government-run public option and single payer study continue to move forward in both the House and Senate. The government-directed public option is intended to collapse the private healthcare market and, eventually, force everyone into a government-run single payer system. We have an action alert running in opposition to this nutty scheme. You can share it or fill it out here.

Topics:

Taxes

State:

Minnesota

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