ST. PAUL, MN –  The Minnesota Senate today approved a bipartisan $944 million tax bill aimed at jumpstarting the economy and helping workers and small business owners recover from COVID-19. The bill does not include any of the significant tax hikes proposed by Gov. Walz or Democrats in the House of Representatives, both of whom proposed raising taxes by over $1 billion, including the creation of a fifth-tier income tax. The bill passed with bipartisan support and is heading to Governor Walz’s desk for his approval. 

The bill empowers Minnesotans and encourages economic growth with two top priorities for workers championed by Senate Republicans all year: full conformity to federal tax rules for the forgivable Paycheck Protection Program loans many businesses used to survive the COVID-19 pandemic, including deductions for expenses, and full conformity for federal pandemic unemployment benefits up to $10,200. 

“We made it a priority this session to help Minnesotans and to give them as much relief as possible,” said Senator Rich Draheim (R-Madison Lake). “This tax bill doesn’t raise taxes or open a window for rampant government spending. Instead, it provides nearly $1 billion in relief that is focused on getting businesses open, economy moving and Minnesotans back to work.”

Job creators and business owners will see lower property taxes as a result of this bill. The bill also replenishes $491 million that was borrowed from the state budget reserve two years ago and provides relief to Minnesota contractors for their June accelerated sales tax payments. 

  Other highlights of the bill: 

• Establishes with Frontline Worker Grant program working group to make recommendations on the disbursement of $250 million as a direct cash benefit to frontline workers. COVID relief funds from the federal government can be used to benefit those workers who were put at risk as they continued to work during the pandemic. The working group will be tasked with defining eligible workers and the matching benefit, which the full legislature will then adopt. 
• Financial support for the Oriented Strand Board (OSB) project in Northern Minnesota. The OSB was recently approved to receive $15 million in funding from the Iron Range Resources And RehabilitationBoard and this crucial project will bring hundreds of direct and indirect jobs to the community. 
• The bill extends the Angel Tax Credit by $5 million, which encourages investments in startup companies focused on high technology, new proprietary technology, and other groundbreaking fields.  
• The bill extends the Historic Structure Rehabilitation Credit, the hugely successful job-creating tax credit that helps rehabilitate historic buildings. A study found that every $1 spent on the tax credit generates $9.50 in private sector economic activity. 
• The bill emphasizes affordable housing and workforce housing with a new tax credit to bring private money into the marketplace.  
• The bill provides annual aid payments to counties to address student homelessness.