Minnesota Senate approves $ 470 million pandemic tax relief plan – Twin Cities

The Minnesota Senate voted Thursday in favor of a proposal to give tax relief to business owners and Minnesota residents who lost their jobs amid the pandemic just days before businesses faced a deadline for income tax.

In a 55-12 vote, the Senate approved the roughly $ 470 million plan that would bring state tax laws into line with federal guidelines, allowing business owners who have withdrawn loans from the program Paycheck Protection to avoid paying state income taxes on funds. Minnesotans who received an additional UI benefit of $ 600 last year would also see a portion of that benefit removed from their tax filing requirement.

More than 100,000 Minnesota businesses have received federal loans that were supposed to help them keep their employees on the payroll during the pandemic and tens of thousands of Minnesotans have applied for unemployment insurance benefits after their employers laid off or cut their hours due to COVID-19 and the state’s efforts to stop it.

Senators said they felt growing pressure to pass a tax compliance bill as business owners face a deadline of Monday March 15 to file their taxes. Without change, many could face additional income taxes due to PPP loans. Individual filers still have one month before their income taxes are due.

Democrats, Independents and Republicans in the Senate urged their peers in the House of Representatives to pass the bill or a similar bill that could be developed in a conference committee and sent to the governor’s office. The legislative leaders of the House and Senate have weighed a compromise plan and have yet to achieve the one they have shared publicly.

“It can be done. It can still be done this week, ”said Bill’s author, Senator Tom Bakk, I-Cook. “I would really encourage my colleagues and House leaders to do that, let’s not slow down the economic recovery from this pandemic. “

But the head of the House Tax Committee said the Senate bill was “incomplete” because it did not offer support to business owners who did not make a profit in 2020 or were not authorized to receive loans. He also said lawmakers should offer more help to Minnesotans who should be taxed on unemployment insurance benefits.

“We have to make sure we help all of these businesses and those affected by the pandemic,” Representative Paul Marquart, DFL-Dilworth, told Forum News Service. “Before the train leaves the station, we have to bring all the businesses and individuals. And that’s what I’m afraid of. If you were to just accept this bill, who knows if we will have another tax bill. … There are going to be a lot of people who will be left behind.

Marquart said the tax compliance bills, proposals for tax exemptions for more Minnesotans who have received unemployment insurance and to allow companies that did not report profits in 2020 to defer their Operating losses had all been considered by his committee and could quickly be prepared for House votes. President Melissa Hortman, DFL-Brooklyn Park, said Monday’s deadline for passing a bill was a “red herring” and said leaders would continue to work to secure a deal before April 15 which could s ‘apply retroactively to businesses.

In the Senate, supporters of the bill said the legislature must quickly pass a compliance bill to help unemployed business owners and Minnesotans to avoid another economic setback.

“They were lifelines, the Payroll Protection Plan was a lifeline not only for the company, but for the employees. It allowed the paychecks to flow even when there were no customers, so it supported workers in Minnesota, ”said Senator Carla Nelson, R-Rochester. “Now far too many of them would be taxed on their lifeline and it is unreasonable that we do this and put a lot of them on the brink.”

The Minnesota Chamber of Commerce applauded the vote and said granting the tax break could help Minnesota “continue to grow the economy and create and maintain jobs for Minnesotans.”

Democrats raised concerns about the proposal after senators rejected amendments to increase the amount of unemployment insurance exempt from income tax, exempt student loans from taxable income, and set aside funds for summer school programming.

“If we want to make this economic stimulus for business, then what we also need to do is ensure fairness for workers,” said Senator Jen McEwen, DFL-Duluth, as she introduced an amendment aimed at further exempting unemployment insurance funds. . “We have to stand up for the average Minnesota people, the workers of Minnesota. “

Democratic Gov. Tim Walz, at a press conference Thursday, urged lawmakers to add funding to a tax relief plan for summer school programming to address the learning loss of the distance learning. He proposed a $ 150 million plan that would open summer school to all students.

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