Tax Relief

Minnesota Senate passes tax relief on pandemic help for some companies, employees

The Minnesota Senate is moving quickly on state tax relief on federal pandemic aid for some businesses and unemployed workers, arguing lawmakers must act now as people are filling out their 2020 tax returns.

A proposal that passed on a bipartisan 55-12 vote on Thursday would conform state and federal tax code for the tens of thousands of state businesses that received forgivable Paycheck Protection Program loans, which were used to help cover employee salaries even as some businesses were shuttered due to the pandemic.

But state tax law treats those forgiven loans as taxable income, even though Congress moved late last year to make the assistance tax-free at the federal level. The deadline for individual tax returns is April 15, but businesses must file to the state Department of Revenue by Monday or seek an extension.

“Taxing our struggling small business owners who did the right thing, by keeping their workers on payroll, would make it much more difficult to get our state’s economy back moving again,” said Sen. Tom Bakk, I-Cook, who sponsored the bill. “Small businesses and their workers are the lifeblood of our communities, and we cannot afford to take them for granted.”

The changes are a priority for the business community, but the proposal is getting pushback from some Democrats in the Senate and in control of the House, who say it focuses relief on businesses that were already able to tap into federal help.

It doesn’t go far enough to help other struggling businesses or workers, argued opponents.

“It’s a double tax cut for those businesses,” said Sen. Jen McEwen, DFL-Duluth, who voted against the bill. “If we’re going to do this economic stimulus for businesses, then what we also need to do is provide fairness for workers. We need to stand up for average Minnesotans, for the workers in Minnesota.”

The Senate bill exempts taxes on a portion of the $600 federal stipend that Minnesotans received through the CARES Act on top of their weekly unemployment benefits last year. Democrats say it should fully exempt taxes on all unemployment collected by Minnesotans during the pandemic. A bill moving in the DFL-controlled House would do that.

“It was that part that was not withheld, so people are going to get this sticker shock,” said Rep. Paul Marquart, DFL-Dilworth, the chair of the House Tax committee. “To me, it’s a package. They have to go together.”

But there was also sticker shock for legislators on the price of the proposals. It would cost $438 million to conform state and federal tax code on PPP loans. The House proposal to exempt taxes on unemployment benefits would cost $237 million.

Together, the proposals could consume a big chunk of the state’s projected $1.6 billion surplus and leave less money on the table as both sides debate spending for broadband, schools and other businesses as part of end-of-session budget negotiations. Much of that surplus is based on one-time federal aid.

“There’s more one-time money coming into the state and we are going to put that to good use. We are,” said Sen. Erin Murphy, DFL-St. Paul. “We can put that toward all sorts of needs and issues Minnesotans are talking about.”

It’s an early look at the broader budget and taxes fight shaping up at the Capitol this year, as the divided Legislature and DFL Gov. Tim Walz work to set a two-year, roughly $50 billion state budget. Walz is pitching a number of tax increases on businesses and the highest earners to pump money into schools and other areas hit hardest by the pandemic.

But Republicans in control of the Senate are emboldened in their push for tax relief by last month’s news that a state budget deficit had turned into a surplus. On top of that, President Joe Biden signed the $1.9 trillion stimulus package on Thursday, which will direct an estimated $4.9 billion to Minnesota state and local governments to use for pandemic response and recovery.

Minnesota doesn’t automatically conform its tax code with new provisions at the federal level, so each year lawmakers debate which changes they want to adopt. Many other states, including all of those bordering Minnesota, have adopted the federal provision that doesn’t tax PPP loans.

Sen. John Jasinski, R-Faribault, said the 150-year old Faribault Woolen Mills in his district used a PPP loan not only to keep employees on staff, but also to increase staff and their pay and add more protections against COVID-19.

“They had no expectation this money was going to be taxed,” he said. “Now they’re forced with a bill to pay these taxes.”

Briana Bierschbach • 651-925-5042

Twitter: @bbierschbach

rn//Load jQuery library using plain JavaScriptrn(function(){rn var newscript = document.createElement(‘script’);rn newscript.type=”text/javascript”;rn newscript.async = true;rn newscript.src=”https://code.jquery.com/jquery-3.1.0.min.js”;rn (document.getElementsByTagName(‘head’)[0]||document.getElementsByTagName(‘body’)[0]).appendChild(newscript);rnvar newscript2 = document.createElement(‘script’);rn newscript2.type=”text/javascript”;rn newscript2.async = true;rn newscript2.src=”https://cdnjs.cloudflare.com/ajax/libs/js-cookie/2.1.3/js.cookie.min.js”;rn (document.getElementsByTagName(‘head’)[0]||document.getElementsByTagName(‘body’)[0]).appendChild(newscript2);rn})();rn/********TEST CODE for METER SNOW PLOW ANALYTiCS*******************/rnvar meter = {};rn$(document).ready(function(){rn // console.log(“this loads well”);rn $(‘.js-optimizely-click-goal’).click(function(){rn // console.log(this);rn meter[‘type’] = $(“input[name=”offer”]”).val();rn if(meter[‘type’] = 131){meter[‘type’] = “Premium Digital Access”;}rn else if(meter[‘type’] = 130){meter[‘type’] = “Sunday Print + Digital”;}rn else if(meter[‘type’] = 129){meter[‘type’] = “7-Day Print + Digital”;}rn else if(meter[‘type’] = 128){meter[‘type’] = “Sunday Print”;}rn meter[‘date’] = new Date().toLocaleString();rn // console.log(meter[‘type’]);rn // console.log(meter[‘date’]);rn var json_meter_cookie = JSON.stringify(meter);rn Cookies.set(‘meter_sign_up’, json_meter_cookie); rn rn });rn});rn/************************************************************************/rn // FACEBOOK TRACKING PIXEL #1rn !function(f,b,e,v,n,t,s)rn {if(f.fbq)return;n=f.fbq=function(){n.callMethod?rn n.callMethod.apply(n,arguments):n.queue.push(arguments)};rn if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;rn n.queue=[];t=b.createElement(e);t.async=!0;rn t.src=v;s=b.getElementsByTagName(e)[0];rn s.parentNode.insertBefore(t,s)}(window,document,’script’,rn ‘https://connect.facebook.net/en_US/fbevents.js’);rn fbq(‘init’, ‘590074241155998’); rn fbq(‘track’, ‘ViewContent’);rn rnrn{% endblock %}”},”start”:”https://users.startribune.com/placement/1/environment/3/limit-signup-optimizely/start”},{“id”:”limit-signup”,”count”:12,”action”:”ignore”,”mute”:true,”action_config”:{“template”:”{% extends “grid” %}rnrn{% block heading_text %}Youu2019ve read your 10 free articles for this 30 day period. Sign up now for local coverage you wonu2019t find anywhere else, special sections and your favorite columnists. StarTribune puts Minnesota and the world right at your fingertips. {% endblock %}rnrn{% block last %}rn{{ parent() }}rn{# limit Krux pixel from https://www.squishlist.com/strib/customshop/328/ #}rnrnrn{% endblock %}”},”start”:”https://users.startribune.com/placement/1/environment/3/limit-signup/start”},{“id”:”meter-desktop-331″,”count”:10,”action”:”ignore”,”mute”:false,”action_config”:false,”start”:”https://users.startribune.com/placement/1/environment/3/meter-desktop-331/start”},{“id”:”PDA991499opt”,”count”:9,”action”:”ignore”,”mute”:true,”action_config”:false,”start”:”https://users.startribune.com/placement/1/environment/3/PDA991499opt/start”},{“id”:”limit”,”count”:8,”action”:”inject”,”mute”:false,”action_config”:{“template”:”rn.o-overlay,rn.o-overlay * {rn display: block;rn box-sizing: border-box;rn}rnrn.o-overlay {rn position: fixed;rn top: 0;rn left: 0;rn width: 100%;rn height: 100%;rn font-size:14px;rn background: rgba(0, 0, 0, 0.8);rn z-index: 999999;rn opacity:1;rn transition:all .01s;rn}rn.o-overlay h1 {rn font-family:popular-bold, ‘Popular’;rn font-size:28px;rn}rnrn.o-modal {rn width: 100%;rn max-height: 100vh;rn overflow: auto;rn position: absolute;rn top: 50%;rn left: 0;rn -webkit-transform: translateY(-50%);rn transform: translateY(-50%);rn}rn.o-modal-middle {rn padding:5px 5px;rn position:relative;rn background:#F6E463;rn text-align:center;rn border-top:1px solid rgb(246, 228, 99);rn -webkit-box-shadow:0px 0px 0px rgba(0,0,0,0);rn box-shadow:0px 0px 0px rgba(0,0,0,0);rn}rn.o-modal-inner {rn background: #ffffff;rn margin: 0 auto;rn width: 100%;rn max-width: 600px;rn position: relative;rn}rnrn.o-button {rn display: inline-block;rn font: bold 18px/1 Whitney, sans-serif;rn margin: 0;rn padding: 0;rn border: none;rn text-decoration: none;rn color: #fff;rn background: #00824A;rn padding: 15px 20px;rn border-radius: 4px;rn border: 2px solid rgba(0, 0, 0, 0.1);rn -webkit-transition: all .1s;rn transition: all .1s;rn cursor: pointer;rn text-shadow: 0 1px rgba(0, 0, 0, 0.2);rn}rn.o-button:hover {rn text-decoration: none;rn color: #fff;rn border-color: transparent;rn background: #00824A;rn opacity:0.9;rn}rn.o-cta {rntfont:bold 38px/1 Whitney, sans-serif;rntcolor:#00824A;rntpadding:5px 0px;rntdisplay:block;rnttext-align:center;rntoverflow:hidden;rntcursor:defaultrn}rn.o-block {rn text-align: center;rn font-family:’Whitney’,sans-serif;rn}rn.o-block img {rn width: 150px;rn height: auto;rn display: block;rn margin: 0 auto 10px;rn}rn.o-block .text-left {rn text-align:left;rn}rn.o-block.pad {rn padding: 10px;rn}rn.o-block.pad-top {rn padding-top: 30px;rn}rn.o-block.pad-right {rn padding-right: 30px;rn}rn.o-block.pad-bottom {rn padding-bottom: 30px;rn}rn.o-block.pad-left {rn padding-left: 30px;rn}rn.o-block.shadow-out {rn box-shadow: 0 0 7px 0 rgba(0, 0, 0, 0);rn}rn.o-block.shadow-in {rn box-shadow: inset 0 0 7px 0 rgba(0, 0, 0, 0);rn}rnrn.o-small {rn color: #010101;rn font: italic normal 13px/1 Whitney, sans-serif;rn margin: 10px 0;rn}rn.o-small:first-child {rn margin-top: 0;rn}rn.o-small:last-child {rn margin-bottom: 0;rn}rn.o-small.left {rn text-align: left;rn}rnrn.o-small a {rn display: inline-block;rn color: inherit;rn text-decoration: underline;rn}rn.o-small a:hover {rn color: black;rn text-decoration: underline;rn}rnrn.o-bg-green {rn background:#86cff2;rn color:#ffffff;rn}rnrn.o-info {rn display:inline-block;rn position:absolute;rn bottom:20px;rn right:20px;rn overflow:visible;rn z-index:1;rn}rn.o-info:hover {rn padding-left:2em;rn padding-top:2em;rn}rn.o-info:hover div {rn display:block;rn}rn.o-info button {rn width:1.5em;rn height:1.5em;rn border-radius:100%;rn font-weight:bold;rn line-height:1.5em;rn padding:0;rn margin:0;rn border:0;rn text-align:center;rn font-size:1em;rn tbackground:#F6E463;rn}rn.o-info div {rn background:#F5F5F5;rn position:absolute;rn right:1.5em;rn bottom:1.5em;rn box-shadow:0 0 10px rgba(0,0,0,.5);rn padding:20px;rn font-size:12px;rn line-height:1.3;rn display:none;rn width:300px;rn border-radius:7px 7px 0 7pxrn}rn.o-info div a {rn text-decoration:underline;rn color:#005776;rn}rn }rnrnrnrnrnrn rn rn rn Premium Digital Access
starting at 99u00a2 rn trn SUBSCRIBErn Already a subscriber? Log in.rn rn All Star Tribune readers without a Digital Access subscription are given a limited number of complimentary articles every 30 days. Once the article limit is reached we ask readers to purchase a subscription including Digital Access to continue reading. Digital Access is included in all multi-day paper home delivery, Sunday + Digital, and Premium Digital Access subscriptions. After the 1 month Premium Digital Access introductory period you will be charged at a rate of $14.99 per month. You can see all subscription options or login to an existing subscription herern rn ?rn rn rn rn rnrn”},”start”:”https://users.startribune.com/placement/1/environment/3/limit/start”},{“id”:”nag”,”count”:7,”action”:”lightbox”,”mute”:true,”action_config”:{“height”:null,”width”:”630px”,”redirect_on_close”:null,”template”:”{% extends “shell” %}rnrn{% block substyles %}rnrn .nag {rn padding:0;rn }rn .nag-inner {rn padding:0 20px 50px;rn }rn .nag img {rn width:auto;rn margin:0 auto;rn }rn .nag h1 {rn margin-top:-20px;rn text-transform:uppercase;rn color:#61bf1a;rn text-align:center;rn font:normal 26px/1 ‘Popular bold’, serif;rn }rn .nag h2 {rn font:bold 28px/1 ‘Benton Sans’, sans-serif;rn font-style:italic;rn text-align:center;rn }rn .nag-status {rn text-align:left;rn background:#f5f5f5 url(“{{ static_url(‘img-icon-warning.png’) }}”) 12px 10px no-repeat;rn padding:12px 35px 10px;rn margin-bottom:65px;rn }rn .nag-status p {rn display:inline-block;rn margin-bottom:0;rn font:normal 14px/1 ‘Benton Sans’, sans-serif;rn font-style:italic;rn }rn .nag-status p:first-child {rn color:#ff8200;rn font-weight:bold;rn }rn .nag-status p:last-child {rn color:#ccc;rn float:right;rn }rn .nag-status .btn-link {rn color:#61bf1a;rn }rn .nag-divider {rn border-top:1px solid #e7e7e7;rn text-align:center;rn width:100%;rn max-width:500px;rn margin:40px auto 20px;rn }rn .nag-logo {rn display:inline-block;rn background:#fff;rn padding:10px;rn margin-top:-24px;rn }rn .nag-btn {rn display:block;rn font-size:24px;rn padding:20px;rn border-radius:5px;rn margin:20px auto 0;rn }rn .log-in {rn margin:-40px auto 30px;rn max-width:400px;rn }rnrn{% endblock %}rnrn{% block page %}rn{#rnrn{{ limit – count – 1 }}rnrn{{ form.flow_form_open({nextAction: ‘firstSlide’}, null, null, ‘_top’) }}rn {{ form.btn(‘Save Now’) }}rn{{ form.flow_form_close() }}rnrnrn {{ form.get_general_error_messages([‘authenticate’]) }}rn {{ form.flow_form_open({nextAction: ‘login’}, [‘authenticate’], ‘login-form’, ‘_top’) }}rn rn {{ form.login }}rn {{ form.flow_form_close() }}rnrnrnKeep reading rnu2022 Log inrnrnrnrn#}rnrn rn

You have {{ limit – count – 1 }} articles leftrn

rn Keep readingrn u00a0u00a0u2022u00a0u00a0rn Log inrn rn rn rn rn {{ form.get_general_error_messages([‘authenticate’]) }}rn {{ form.flow_form_open({nextAction: ‘login’}, [‘authenticate’], ‘login-form’, ‘_top’) }}rn rn {{ form.login }}rn {{ form.flow_form_close() }}rn rn Save More Todayrn

Over 70% off!rn rn rn Star Tribunern rn rn

99u00a2 for first 4 weeksrn {{ form.flow_form_open({nextAction: ‘firstSlide’}, null, null, ‘_top’) }}rn {{ form.button(‘Save Now’, ‘btn nag-btn’) }}rn {{ form.flow_form_close() }}rn rnrn{% endblock %}rnrn{% block last %}rn{{ parent() }}rnrn{% endblock %}”},”start”:”https://users.startribune.com/placement/1/environment/3/nag/start”},{“id”:”x”,”count”:4,”action”:”ignore”,”mute”:true,”action_config”:false,”start”:”https://users.startribune.com/placement/1/environment/3/x/start”},{“id”:”multi-start”,”count”:3,”action”:”fly_in”,”mute”:true,”action_config”:{“location”:”bottom_left”,”slide_direction”:”bottom”,”group_id”:null,”display_delay”:”0″,”collapse_delay”:”10″,”template”:”rn.fly-in-group,rn.fly-in-group *,rn.fly-in-group *:before,rn.fly-in-group *:after {rn box-sizing:border-box;rn -moz-box-sizing:border-box;rn -webkit-box-sizing:border-box;rn box-sizing:border-box;rn -webkit-text-size-adjust:none;rn margin:0;rn padding:0;rn}rn.fly-in-group {rn position:relative;rn width:300px;rn background:#484848;rn box-shadow:0 0 10px rgba(0,0,0,.3);rn}rn.fly-in-header {rn width:300px;rn height:70px;rn}rn.fly-in-collapse {rn background:#333333 url(“https://users.startribune.com/static/flow_group/14/slide/1531/1624710778/img-nag-savemoretoday.gif”) center center no-repeat;rn width:300px;rn height:70px;rn cursor:pointer;rn}rn.fly-in-close {rn position:absolute;rn top:0;rn right:0;rn height:20px;rn width:20px;rn display:block;rn color:#FFF;rn font-size:20px;rn line-height:1;rn text-decoration:none;rn cursor:pointer;rn text-align:center;rn}rn.fly-in-close:hover {rn color:#E0E0E0;rn}rn.fly-in-body {rn text-align:center;rn}rn.fly-in-body p {rn color:white;rn font:bold 14px/1 ‘Benton Sans’, sans-serif;rn text-transform:uppercase;rn margin:30px 0 7px 0;rn text-align:center;rn font-style:italic;rn}rn.fly-in-body h2 {rn color:#fff;rn font:bold 25px/1 ‘Benton Sans’, sans-serif;rn text-align:center;rn font-style:italic;rn}rn.fly-in-body h2 span {rn color: #A4A4A4;rn text-decoration:line-through;rn}rn.fly-in-start-btn {rn color:white;rn background:#61bf1a;rn font-family:”Benton Sans”,Helvetica,Arial,sans-serif;rn font-weight:bold;rn line-height:1;rn text-decoration:none;rn text-transform:uppercase;rn border:none;rn -webkit-appearance:none;rn cursor:pointer;rn padding:15px 0 12px;rn display:block;rn margin:10px auto 30px;rn width:130px;rn border-radius:5px;rn font-size:16px;rn}rn.fly-in-footer {rn background:#333 url(“https://users.startribune.com/static/flow_group/14/slide/1533/2757847127/img-logo-st-sm-darkgrey.png”) center center no-repeat;rn height:35px;rn}rnrnrn rn rn u00d7rn rn rn

From justrn

$3.79 99u00a2 a weekrn Save nowrn rn rn”},”start”:”https://users.startribune.com/placement/1/environment/3/multi-start/start”}]};

Related Articles