On Thursday, the Minnesota Senate passed legislation that brings tax and economic relief to Minnesotans. The Coronavirus Economic Recovery Act emphasizes three elements that will benefit impacted businesses and their workers: liquidity to preserve cash flows, stability to give businesses some level of confidence moving forward, and recovery aid to help them push through the pandemic.
“COVID-19 has caused havoc across Minnesota that has impacted every corner of our state,” said Senator Justin Eichorn (R-Grand Rapids). “From the public health impacts of the crisis to the damage financial damage felt across our communities, we’ve all been impacted. Today, the Senate took critical action to help our workers and small businesses, setting up or state and our economy to begin putting the pieces together and rebuilding for the future.”
Businesses struggling with cash flow due to the crisis will be able to keep more money on hand thanks to delayed tax payments for S-corporations, partnerships, and C-corporations; delayed installments of estimated tax payments; delayed accelerated sales tax payments; and delayed general statewide business property tax payments. The bill also provides full, retroactive conformity to Section 179 of the federal tax code, which will allow farmers and other small business owners to deduct large equipment purchases. Additionally, more families with children in school will be eligible for the K-12 tax credit due to a higher qualifying income threshold.
Other provisions include:
- A fairer school equalization aid formula, so districts with low property wealth will get more revenue
- Elimination of the sunset and continued funding for the Angel Investment Tax Credit
- Charitable gaming tax relief to keep more tax dollars in local communities
- Making federal Paycheck Protection Program loans non-taxable on Minnesota taxes
- A reduced tax rate for low-income qualifying low-income class 4D rental property
Federal and state governments have already authorized extensions of income tax payments, sales and use tax payments, MinnesotaCare and Provider tax payments, and occupation taxes paid by mining companies.