House approves tax relief, job creationPublished 10:08am Tuesday, April 3, 2012
Column: Capitol Conversationsairport
Not long ago, business leaders testified before a House committee that reducing Minnesota’s business property tax is a good way to retain jobs in Minnesota, and if the tax is eliminated altogether, Minnesota will inevitably see increased job creation because it would show that lawmakers are serious about making this state a favorable place to operate a business.
On March 21, the Minnesota House approved the Tax Relief and Job Creation Act, and business property tax relief is one of the highlights of the bill.
When it comes to our economic condition, Minnesota is clearly back on track. With our unemployment rate dropping rapidly over the past year, and having turned a $5.1 billion budget deficit into a $1.2 billion surplus, we are making great progress. But the key will be to put even more Minnesotans to work in permanent jobs, and I believe this legislation will make that happen.
The legislation seeks to reward those entrepreneurs who are taking the risks toward starting a business and putting more Minnesotans to work, particularly in rural Minnesota. Two of these initiatives that I’ve been working on, which are also supported by the Coalition of Greater Minnesota Cities, are included in the proposal.
When it comes to the angel investment credit, which provides incentives to investors that put money into startup and emerging companies focused on high or new proprietary technology, only 6 percent of this investment makes its way into rural Minnesota. My proposal looks to change that, stating that if 30 percent of future investment is not in Greater Minnesota by the end of 2013, then angel investors will receive a 40 percent credit — instead of 25 percent — for investing in our rural areas.
The bill also creates an Internship Grant Program aimed at attracting and keeping talent in Greater Minnesota. The program would be administered through the Office of Higher Education and provides a 40 percent grant, or up to $1,250 per intern, to employers. A maximum of five interns per employer would also be required.
Provisions championed by the bipartisan House Small Business Caucus were also implemented in the proposal. They include the upfront capital equipment exemption. Under this initiative, if the business is valued at less than $1 million and has fewer than 20 employees, it would be allowed to take an upfront capital equipment exemption rather than get it through a refund. In other words, rather than waiting several months for your refund, we want you to receive the benefit immediately.
Increasing the investment in the angel investor credit was also a Small Business Caucus priority, as is the 18-month extension of the special TIF authority granted in the 2010 jobs bill for the expanded used of economic development districts and surplus increments.
But the key to this comprehensive proposal will be providing business tax relief, which is the No. 1 complaint among small business owners across this state.
Under this legislation, we would phase out the statewide tax on business property over 12 years beginning in 2014. The bill also exempts 70 percent on the first $150,000 of value for all business property in tax year 2013, which should be especially welcome by small business owners in rural Minnesota.
According to statistics provided by our research department, businesses in Freeborn County alone will see up to a 16.6 percent reduction in their property taxes if this plan becomes law.
This Legislature believes the key to job growth in this state is to allow businesses in the private sector to thrive, not to force them to send more money to government. The Tax Relief and Job Creation Act seeks to make our business owners more successful, more productive and more competitive — not only so they can maintain their businesses but to expand and add more jobs.
Have a question or concern? Constituents in District 27A including communities in Freeborn and Mower counties can write to me at 439 State Office Building, 100 Rev Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155. Or call me at 651-296-8216 or e-mail me at email@example.com.
Rich Murray, R-Albert Lea, is the state representative for House District 27A.