(St. Paul) – Today, 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.
“Even with emergency federal and state assistance programs, we are still getting large volumes of calls every single day from small businesses and workers who are right on the edge of survival,” said Senate Tax Committee Chairman Roger Chamberlain (R-Lino Lakes), the bill’s author. “Businesses badly need cash flow and stability if they have any hope of retaining workers and eventually rebuilding when this over. The economic destruction of the coronavirus and the stay-home order has made this recovery package more urgent than ever.”
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.
We have to continue helping the citizens of Minnesota and adjust to our new economic recovery phase,” said Senator Andrew Mathews (R- Princeton). “Tax deadline extensions, Section 179 conformity, and exemption of federal payments from taxes were imperative measures for those who have been hit hardest this year – farmers and small businesses.”
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 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.