Pratt, Minnesota Senate pass $681 million tax relief bill that provides meaningful relief for Minnesota families and businesses

The Minnesota Senate on Wednesday approved a $681 million tax relief bill aimed at jumpstarting the economy and helping workers and small business owners recover from COVID-19. The comprehensive legislation delivers tax relief and reform without raising taxes, a sharp contrast from tax plans from House Democrats and Gov. Tim Walz, both of whom have proposed more than $1 billion in tax hikes.  

“Minnesota has a current surplus of over $1 billion, and billions more will be coming from the Federal Government,” said Senator Eric Pratt (R-Prior Lake). “This tax bill provides millions in tax relief and ensures taxes are not raised on Minnesotans. After a year of economic hardship, now is not the time to raise taxes. This is a good bill that offers targeted relief that ensures economic recovery is viable for our families and our businesses.” 

The bill empowers Minnesotans and encourages economic growth. Key initiatives include full conformity to federal tax rules for the forgivable Paycheck Protection Program loans, as well as a bipartisan compromise allowing those who need relief most to exclude a portion of their pandemic unemployment benefits from their taxes. Language included also lowers statewide property taxes for job creators by increasing the statewide property tax exclusion from $100,000 to $150,000. 

  Other highlights of the bill: 

  • The bill indexes the K-12 credit and K-12 subtraction to inflation so working families can keep more of their hard-earned money.      
  • 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.