The Minnesota Chamber of Commerce sees the state’s budget surplus as an opportunity for business tax relief.
The chamber wants part of the surplus to go toward eliminating the statewide property tax for businesses–or at least getting rid of the automatic tax inflator, said Jim Pumarlo, the chamber’s director of communications.
“This will not affect what businesses pay for local property taxes,” he said. “And we’re not saying pass this along to homeowners.”
The statewide business property tax is a fixed cost that rises automatically every year, Pumarlo said, and it affects all businesses, whether they own or lease property. In some instances, Minnesota business taxes are 200 percent higher than in neighboring states, he said.
“They shoulder this cost regardless of whether they post a profit or record a loss in operating income,” he said.
To be more competitive, Minnesota must reduce the high fixed cost of doing business in the state, Pumarlo said.
Jim Walter with 702 Communications said that because of the state’s business taxes, if he expands, it likely won’t be in Minnesota.
“It seems like taxes just keep going up every year,” he said. “At some point in time in Minnesota, it’s got to stop.”
Pumarlo said the chamber understands the tax cannot be phased out overnight, but even removing the automatic inflator would help and wouldn’t have a big impact on the general fund.
“We don’t think it’s smart for any program to be on autopilot,” he said.
Tax burden is always the top barrier to job growth, according to an annual chamber survey, Pumarlo said.
“It continually dogs a lot of Minnesota businesses,” he said.
The chamber also wants the Legislature to pass a 10-year funding bill for transportation infrastructure. It’s currently funded by things like gas taxes, but the chamber wants a portion of Minnesota’s general fund to supplement transportation infrastructure funding.
“Even with the lower budget forecast, we believe now is the time to best position Minnesota for a strong and growing economy,” he said.
The Minnesota Chamber has scheduled the second of two Business Days from 11 a.m. to 5 p.m. Wednesday, April 20, to give businesses a chance to hear from legislators on the status of tax relief. It starts with a luncheon at the DoubleTree by Hilton in downtown St. Paul followed by meetings with legislators at the Minnesota State and Senate Office Buildings.
The first Business Day, on transportation investment, was March 30.
– Tracy Frank, Forum News Service