(St. Paul) – 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.
“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.
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
“It’s very good to include the retroactive Section 179 conformity with federal tax law changes, in particular,” said Senator Torrey Westrom (R-Elbow Lake). “It will be harder than ever for farmers and small business to capitalize their equipment purchases in the wake of this pandemic. This, along with the other provisions in the bill, will ease the burden as they invest in their futures.”
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 fair school equalization aid formula, so districts with low property wealth, generally rural areas, 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.