Senate Tax Committee Chairwoman Carla Nelson (R-Rochester) today announced a deal has been struck on a bipartisan $944 million tax bill aimed at jumpstarting the economy and helping workers and small business owners recover from COVID-19. 

“All year, the Senate Tax committee has focused on nimble, good tax and fiscal policies that empower Minnesota families and grow economic activity,” said Sen. Nelson. “Minnesotans should be thrilled with this bipartisan agreement that puts their needs first. This bill provides millions of dollars in tax relief, so individuals can keep more of their hard-earned dollars and provide a spark to our economy.” 

The bill empowers Minnesotans and encourages economic growth with two top priorities for workers championed by Senate Republicans all year: full conformity to federal tax rules for the forgivable Paycheck Protection Program loans many businesses used to survive the COVID-19 pandemic, and full conformity for federal pandemic unemployment benefits up to $10,200.

“There is simply no reason why we should ask folks to pay taxes on this emergency assistance,” Sen. Nelson added. “Businesses relied on these loans to keep people employed during the worst of the pandemic, and many of them are still struggling. Individuals were forced off the job through no fault of their own, and they depended on the extra unemployment to help make ends meet. Providing this protection is one of the most important things we can do to help employees and employers recover from pandemic-induced economic hardship.” 

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 also replenishes $491 million that was borrowed from the state budget reserve two years ago, and provides relief to Minnesota contractors for their June accelerated sales tax payments.

  Other highlights of the bill:

• The bill extends the Angel Tax Credit by $5 million, which encourages investments in startup companies focused on high technology, new proprietary technology, and other groundbreaking fields.
  

• 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 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.
  
• The bill provides annual aid payments to counties to address student homelessness.