St. Paul -Today, the Minnesota Senate approved a $681 million tax relief bill aimed at jumpstarting the economy and helping workers and small business owners recover from COVID-19.

“I’m happy we’re putting forth legislation that’s going to help those most effected by the pandemic and let them take a breather from the past year,” said Senator Rich Draheim (R-Madison Lake). “Minnesota is already a high tax state and we shouldn’t be raising taxes when we have a huge surplus and billions coming in from the federal government.”

The bill also lowers statewide property taxes for job creators by increasing the statewide property tax exclusion from $100,000 to $150,000. The bill supports Minnesota industries working to emerge from the pandemic including high tech, restaurants, brewers, and ethanol retailers. Relief is also targeted to support affordable and workforce housing, to address the ongoing crises of adequate daycare throughout the state, and to communities seeking to construct public safety facilities. 

The bill empowers Minnesotans and encourages economic growth. Several key initiatives include full conformity to federal tax rules for the forgivable Paycheck Protection Program loans many businesses used to survive the COVID-19 pandemic, as well as a bipartisan compromise allowing those who need relief most to exclude a portion of their pandemic unemployment benefits from their taxes. The bill indexes the K-12 credit and K-12 subtraction to inflation so working families can keep more of their hard-earned money. 

  Other highlights of the bill:

• The bill extends the Angel Tax Credit by $10 million, which encourages investments in startup companies focused on high technology, new proprietary technology, and other groundbreaking fields.
• The bill helps struggling hospitality businesses by providing a temporary sales tax exemption to restaurants for materials, supplies, and equipment used to adapt to COVID-19 guidelines, as well as a temporary tax credit for brewers and retailers for liquor spoilage caused by COVID-19 restrictions.
• 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 establishes a new in-home childcare provider property tax credit to address the childcare shortage in Minnesota and incentivize more people to join the profession. The credit for providers will be equal to 50% of the net tax amount owed on the property for the current tax year.   
• The bill emphasizes affordable housing and workforce housing with a new tax credit to bring private money into the marketplace. Through various property tax reductions, the bill also incentivizes low-income rental development.