(The Center Square) — Minnesota lawmakers reached a bipartisan deal on a $944 million tax bill, Senate Tax Committee Chair Carla Nelson, R-Rochester, announced on the first day of Special Session.
The bill includes full conformity to federal tax rules for the forgivable Paycheck Protection Program loans that more than 93,000 state businesses harnessed to survive the COVID-19 pandemic. It also includes full conformity for federal pandemic unemployment benefits up to $10,200.
“There is simply no reason why we should ask folks to pay taxes on this emergency assistance,” Nelson said in a statement. “Businesses relied on these loans to keep people employed during the worst of the pandemic, and many of them are still struggling. Individuals were forced off the job through no fault of their own, and they depended on the extra unemployment to help make ends meet. Providing this protection is one of the most important things we can do to help employees and employers recover from pandemic-induced economic hardship.”
The bill aims to lower statewide property taxes for job creators by increasing the statewide property tax exclusion from $100,000 to $150,000.
It seeks to replenish $491 million borrowed from the state budget reserve two years ago.
If passed by both chambers and signed into law, the bill would do the following:
- Extend the Angel Tax Credit by $5 million investments in tech startup companies
- Extend the Historic Structure Rehabilitation Credit to rehabilitate historic buildings. A study found that every $1 spent on the tax credit generates $9.50 in private sector economic activity
- Create a new tax credit to bring private money into the marketplace to incentivize low-income rentals
- Provide annual aid payments to counties to address student homelessness
Other negotiations over police reform and pandemic powers are unclear. Gov. Tim Walz called the Legislature back into session Monday as he renewed his peacetime emergency powers for another 30 days.
If lawmakers don’t pass a budget by June 30, the state government shuts down.