St. Paul – On Wednesday, the Minnesota Senate approved a $681 million tax relief bill aimed at jumpstarting the economy and helping workers and small business owners recover from COVID-19.
“I’m happy we’re putting forth legislation that’s going to help those most effected by the pandemic and let them take a breather from the past year,” said Senator David Senjem (R-Rochester). “Minnesota is already the 46th highest taxed state in the country and we shouldn’t be raising taxes when we have a huge surplus and billions coming in from the federal government.”
The bill empowers Minnesotans and encourages economic growth. Several key initiatives include full conformity to federal tax rules for the forgivable Paycheck Protection Program loans many businesses used to survive the COVID-19 pandemic, as well as a bipartisan compromise allowing those who need relief most to exclude a portion of their pandemic unemployment benefits from their taxes.
The legislation includes provisions Chief Authored by Senator Senjem:
- Senate File 316: sets the classification rate for Class 4d qualifying low-income rental properties at 0.25%.
- Senate File 1799: authorizes a city to use the special assessment process to construct, reconstruct, alter, extend, operate, maintain, and promote energy improvement projects in existing buildings.
The bill also includes legislation Senjem previously authored which 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 further lowers statewide property taxes for job creators by increasing the statewide property tax exclusion from $100,000 to $150,000. It supports Minnesota industries working to emerge from the pandemic including high tech, restaurants, brewers, and ethanol retailers. Relief is also targeted to support affordable and workforce housing, to address the ongoing crises of adequate daycare throughout the state, and to communities seeking to construct public safety facilities.
Additional highlights of the bill include:
- Indexing the K-12 credit and K-12 subtraction to inflation so working families can keep more of their hard-earned money.
- Indexing the Angel Tax Credit by $10 million, which encourages investments in startup companies focused on high technology, new proprietary technology, and other groundbreaking fields.
- 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.
- 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.
- 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.
Senator David Senjem, of Rochester, represents Dodge and Olmstead counties in the Minnesota Senate. He serves as chair of the Senate Energy and Utilities Finance and Policy Committee and is a former majority leader and minority leader.