Sales Tax Issues Get Minneapolis Business Leaders Talking

Published On: 14th September 2013

From the internet

A number of business leaders from Minneapolis, Faribault and all around the state took the opportunity in the middle of August to ask Governor Mark Dayton and legislative leaders to repeal all three of the business-to-business sales taxes in Minnesota.

They wish for the legislative leaders to review their request during the special session that is coming up.

However, on August 19, they all received word that the special session that occurs on September 9 and lasts only one day will focus just on the approval of relief for areas that were hit hard by June storms.

Dayton said he was personally disappointed by the lack of a tax deal, but that lawmakers could figure out replacement money for next year’s budget. Dayton stated that he would also like to get rid of those taxes, stating that there would be consequences if such a move was made.

For instance, he said the farm tax deserved special attention. By his account, the farm tax was an accidental inclusion in the state’s new budget. He said it doesn’t make sense because farm equipment and parts purchases remain exempt from the taxes while parts can incur an additional charge.

In the past week, the United for Jobs Coalition and the Minnesota Chamber generated over 800 emails to legislators and the governor seeking repeal of the three taxes. Nearly 350 business owners signed the petition calling for repeal, stating that doing so will allow companies to focus on growing their businesses in Minnesota rather than forcing them out or stifling their growth.

Minnesota is already a high-mandate, high-tax state when it comes to owning a business and many business owners state that the taxes are an additional burden to them.

One individual expressed concern on the taxes being charged on labor, repair, equipment maintenance, and telecommunications because it affects how well businesses can invest. It affects how businesses determine whether they are able to grow or add people to their business.

One bank president said that he has not been able to add new positions within the past two years. With the added taxes, he still doesn’t see how any new individuals can be hired anytime soon. He said that he has seen businesses in the Faribault area fail because of taxation.

Some are worried that prices will have to rise to offset the additional tax.

It is said that the prices will have to rise in order to pay the bills. One business owner said that the state cannot expect small business owners to shoulder the extra costs without having to pass them on to the customer.

The legislature has been accused of taxing small businesses out of the state and keeping new businesses from locating within its borders.

Lawmakers do recognize that the pressure to repeal the taxes will not subside any time soon and will most likely be front and center when the 2014 regular session begins in February. Aside from the farm tax, Republicans have called for the new warehousing and telecommunications equipment taxes to be eliminated.

One lawmaker said that they had identified a source for the cost of repealing the farm tax, but they have yet to find anything to fill the hole that would result from repealing the other taxes.