Legislative Session Provides Some Tax Relief For Business
The Minnesota legislative session ended for the year with a typical last-minute scramble and more than a few items left unchecked, including a bonding bill, transportation funding and REAL ID.
While legislators squabbled—and perhaps squandered—much of the short session, it wasn’t a complete bust for business interests. Lawmakers overwhelmingly passed tax and supplemental budget bills that included reforms to property taxes, credits for student loan borrowers, veteran tax exemptions, support for a St. Paul MLS stadium and more.
The Minnesota Chamber of Commerce had three main focuses during the legislative session, including business property taxes, federal conformity on the estate tax and an enhanced research and development tax credit.
Among the big wins for business was an exemption and lowered levy for statewide business property taxes. New language passed by the legislature rolled back the levy to exclude the first $100,000 of property market value.
But, Chamber president Doug Loon said that the legislation left out removing the automatic inflator that creates “tax increases on autopilot.” He said the organization would work to have that removed in upcoming sessions.
While tweaks were made to the research and development tax credit, it was not as large as the Chamber was seeking. And the estate tax won’t see any changes this year.
Another missed area for both the Chamber and many other constituencies: transportation. Lawmakers failed to compromise on a bill to fund roads, bridges and transit (including the state portion of Southwest LRT, which could lose out on $900 million in federal funding). The GOP’s plan relied largely on borrowing, surplus spending and a shift in some sales taxes. The DFL had several proposals that included increased car tab fees, a gas tax increase and a metro-area sales tax to fund transit.
Still, Loon is confident that a solution can be found. His organization is advocating for a transportation plan that uses current revenue sources that “create a level of assurance” that gas taxes lack, as well as a way to pay for public transportation.
“We made great progress this year … moving toward producing a compromise piece of legislation,” he said. “We are encouraged by discussion of a special session.”