The Minnesota Senate today approved with bipartisan support a major Republican-led Economic Recovery Act 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.
“It is a shame what is happening to Minnesota’s small businesses due to the virus and the stay-home order,” said Sen. John Jasinski (R-Faribault). “This bill will help a little bit, but if we want these businesses to survive then the governor needs to lift the stay-home order. There is no reason Walmart can open but a mom and pop shop in Morristown can’t. We can reopen safely, and we must — it’s the only way to prevent more businesses from going under.”
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.
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 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.