(St. Paul) – I am happy to announce that the Minnesota Senate approved a major Republican-led Economic Recovery Act with bipartisan support to help small businesses battling financial hardship caused by the coronavirus and the stay-home order. The $330 million bill 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.
Unfortunately, small businesses and workers continue to exist at the edge of financial survival, even with assistance programs. I am sad to see these circumstances continue and will proceed in pushing for a smart, safe end to restrictions. We need a stable economy and active markets in our state again, in order to rebuild our business landscape and retain jobs. As an important note, the bill passed in the Senate is not written in law, yet. It still needs to get a vote in the House before crossing the Governor’s desk.
Small 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 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.
Retroactive Section 179 conformity and the various tax exemptions in this bill are great news for hurting small businesses and farmers. That said, I am disappointed that we could not provide further tax cuts, especially for our seniors. The pandemic and following state deficit caused a change of plan that I hope to see remedied in future years.
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
- An elimination of 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.