On Thursday, the Minnesota Senate approved an Economic Recovery Act with bipartisan support. It will provide badly-needed relief to businesses throughout Minnesota that are struggling due to the economic impacts from COVID-19.

The $330 million bill provides businesses, farmers, and schools with liquidity to preserve cash flows, some stability and confidence moving forward, and recovery aid to help them push through the pandemic.

“COVID-19 is not just a public health crisis, it is an economic crisis as well,” said Sen. Carla Nelson (R-Rochester). “We have taken important steps to protect the health of the public, but now we have to take steps to protect the health of Minnesota’s businesses, our economic engines.  I am thrilled this bill includes ideas I have worked on, like delaying general statewide business property tax payments, tax relief for farmers and businesses who make large equipment purchases, changes to keep more charitable donations in local communities, and incentives to encourage investment in emerging companies. This relief will buy businesses more time, and that can be the difference between survival or not.”

The bill includes several pieces of legislation that Sen. Nelson has sponsored, including 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; continued funding for the Angel Investment tax credit; and charitable gaming tax relief to keep more charitable tax dollars in local communities.

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.

Additionally, more families with children in school will be eligible for the K-12 tax credit, thanks to a higher qualifying income threshold.

Other provisions in the bill include:

• A fairer school equalization aid formula, so districts with low property wealth will get more revenue
• Making federal Paycheck Protection Program loans non-taxable on Minnesota taxes
• A reduced tax rate for low-income qualifying 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.