MN Chamber Applauds Tax Cuts But Remains Guarded
Although the Minnesota Chamber of Commerce praised the recent repeal of three business-to-business sales taxes, it said there is still proposed legislation that could be “disruptive” to local businesses.
The United for Jobs Coalition, a group that represents businesses and trade associations throughout the state and is led by the chamber, said it secured a “major victory” Friday, when the state House and Senate passed a bill that would cut various income and sales taxes by $508 million.
According to the state, $232 million of the tax cut package will go toward repealing the three business-to-business taxes—effective March 31—including taxes on farm equipment repair, purchases of telecommunication equipment, and warehousing services.
The chamber was also pleased that the bill increased the threshold for estate taxes to $2 million and eliminated the “gift tax,” which is a tax on the transfer of property or money without expecting to receive something in return. The bill will also add $3 million in additional angel investor tax credits for startup businesses and entrepreneurs in 2014.
The other $230 million of the tax-cut package goes toward reducing taxes for married couples, parents, students, small employers, and others, according to Governor Mark Dayton’s office.
The state said that because some of the tax cuts will be available during this filing season, the Minnesota Department of Revenue is working with tax preparers and online tax preparation services to update tax-filing software for those who haven’t yet filed their taxes.
For those who have already filed their taxes, the Minnesota Department of Revenue will review each tax return and determine whether adjustments and refunds can be made automatically. If not, the state said that the revenue department will contact any taxpayer who will need to file an amended return to receive the new tax benefits.
While the Minnesota Chamber of Commerce was generally satisfied with the tax bill, it said the bill “unfortunately” delayed the enactment of the exemption for sales tax on capital equipment from September this year to July 2015.
The chamber also listed a series of proposals that it said could be “emerging concerns” for local businesses. This included proposals to raise the minimum wage from $6.15 to $9.50 an hour, add new policies regarding paid sick leave, add family caregivers as a protected class, and create new regulations on certain employers by mandating a human resources review and payment system that would evaluate workers based on “comparable worth.”