Senator Ann Rest, DFL lead on the Taxes Committee and co-author of Senate File 263 (Bakk, I, Cook), successfully added a proposal to the bill in the Senate Tax Committee hearing that offers workers receiving unemployment compensation, tax relief at a total one time cost of $30-50 million for 2020. SF 263 conforms to the federal treatment of 2020 COVID-19-related loans to businesses that will not be taxable income to recipients and allows for deductions for various expenses with the nontaxable loans – just like the federal treatment.
The overall bill won unanimous support in the Senate Tax Committee including several of Sen. Rest’s proposals, such as allowing businesses to elect a different filing status for state taxes than they used at the federal level. The overall package is estimated to be $441 million in tax relief for the business provisions.
“Minnesota businesses that received PPP loans last year and used the revenue to keep their workers employed did a great service for our state’s economy,” said Senator Rest (DFL-New Hope). “Congress made special exceptions to allow these forgiven loans, which typically would be taxable, to be tax-exempt for 2020. An improved economic forecast allows bipartisan enthusiastic support for similar forgiveness from Minnesota income taxes. Also, the Senate Tax Committee, under the leadership of Senator Carla Nelson, supported my proposal to extend tax relief to unemployed workers who received jobless benefits last year under the federal CARES Act.”
Continue reading “Kids, workers, businesses — bipartisan tax relief heads to the Senate floor”