Tax Relief Bill Authorizes Minnesota Senate, But Democrats Say ‘Incomplete’

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In a 55-12 vote, the Senate approved the roughly $ 470 million plan that would bring state tax laws into line with federal guidelines, allowing business owners who have cut program loans Paycheck Protection to avoid paying state income taxes. Minnesotans who received an additional UI benefit of $ 600 last year would also see some of that benefit waived from their tax filing obligation.

More than 100,000 Minnesota businesses have received federal loans that were supposed to help them keep their employees on the payroll during the pandemic, and tens of thousands in Minnesota have claimed unemployment insurance benefits after their employers claimed them. laid off or reduced their hours due to COVID-19 and the state’s efforts to stop it.

Senators said they felt growing pressure to pass a tax compliance bill as business owners faced a deadline of Monday March 15 to file their tax returns. Without change, many could face additional income taxes due to PPP loans. Individual filers still have one month before their income tax is payable.

Democrats, Independents and Senate Republicans have urged their peers in the House of Representatives to pass the bill or a similar bill that could be prepared in a conference committee and sent to the governor’s office. House and Senate legislative leaders have weighed a compromise plan and have yet to achieve the one they have publicly shared.

“It can be done. It can still be done this week,” said bill’s author, Sen. Tom Bakk, I-Cook. “I would really encourage my colleagues and House leaders to make it happen, let’s not slow down the economic recovery from this pandemic.”

But the head of the House Tax Committee said the Senate bill was “incomplete” because it did not offer support to business owners who did not make a profit in 2020 or who have been prevented from receiving the loans. He also said lawmakers should offer more help to Minnesotans who should be taxed on unemployment insurance benefits.

“We need to make sure we help all of these businesses and those affected by the pandemic,” Representative Paul Marquart, D-Dilworth, told Forum News Service. “Before the train leaves the station, we have to bring all the businesses and individuals. And that’s what I’m afraid of. If you were to just accept this bill, who knows if we will have another tax bill. … There are going to be a lot of people who will be left behind. “

Marquart said tax compliance bills, proposals to remove taxes for more Minnesotans who were receiving unemployment insurance, and to let businesses that did not report profits in 2020 carry forward operating losses. had all been considered by his committee and could quickly be put to a vote in the House. . President Melissa Hortman, D-Brooklyn Park, said Monday’s deadline for passing a bill was a “red herring” and said leaders would continue to work to secure a deal before April 15 which could s ‘apply retroactively to businesses.

In the Senate, supporters of the bill said the legislature must quickly pass a compliance bill to help unemployed business owners and Minnesotans to avoid another economic setback.

“They were lifelines, the payroll protection plan was a lifeline not only for the company, but also for the employees. He kept the paychecks in circulation even when there were no customers and therefore supported workers in Minnesota, “said Senator Carla Nelson, R-Rochester.” Nfar too many of them would be imposed on their lifeline and that is unacceptable that we do that and that we put a lot of it above the abyss.

The Minnesota Chamber of Commerce applauded the vote and said the tax break could help Minnesota “continue to grow the economy and create and maintain jobs for the people of Minnesota.”

Democrats raised concerns about the proposal after senators voted against amendments to increase the amount of unemployment insurance exempt from income tax, exempt student loans from taxable income and put aside funding for summer programs.

“If we want to make this economic stimulus for businesses, then what we also need to do is ensure fairness for workers,” said Senator Jen McEwen, D-Duluth, introducing an amendment to exempt more unemployment insurance funds. “We have to stand up for the average Minnesotans, the workers of Minnesota.”

Gov. Tim Walz, at a press conference Thursday, urged lawmakers to add funding for summer school programs to a tax relief plan to tackle learning loss at distance. He proposed a $ 150 million plan that would make summer school options open to all students.

Follow Dana Ferguson on Twitter @bydanaferguson, call 651-290-0707 or email [email protected]

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