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Special Session Should Focus on Storm Relief and Tax Relief
Over the past few weeks, Governor Dayton has discussed holding a special session to address the storm damage that occurred across the state in June. Given the tremendous destruction and record rainfall and floods that led to the largest power outage in Minnesota history, I think it’s entirely appropriate for the legislature to come together in a bipartisan way and offer relief and support to our fellow Minnesotans who were devastated by the storm. That should be priority number one of the special session.
Once we’ve taken care of storm relief, we should immediately address the disastrous tax increases passed by Democrats during this past legislative session. Specifically, we should repeal the warehousing tax and the tax on farm equipment repair. We’re already seeing the fallout of how this historic and irresponsible tax increase is affecting our small businesses and hardworking farmers in Minnesota.
In June, Minneapolis-St. Paul Business Journal reported that Red Wing Shoes is delaying construction of a $20 million distribution center in Red Wing because of this new tax.
The CEO of Murphy Warehouse, a warehousing company located in Minneapolis that stores anything from ATVs to wine to parts for nuclear power plants, was quoted in the Star Tribune saying “Why wouldn’t I go to Hudson, and just ship across the border?”
“Why would a customer want to do business with us in Minnesota when they can go somewhere else and not have that 6.8% sales tax?” said the chief of business development at King Logistics, a warehousing and freight transportation provider located next door to us in Dayton, to KARE 11 in June.
While the warehousing tax does not go into effect until April of 2014, Minnesota businesses are making long-term strategic decisions now. They simply cannot wait until the legislature convenes again for the regular legislative session in late February of 2014 – mere days before the tax kicks in – to address the catastrophic affect of this tax.
In addition to the warehousing tax, the tax on farm equipment repairs must be repealed as well. Acting on their infinite wisdom during the final hours of the legislative session, Democrats decided it would be a good idea to impose a 6.875% sales tax on repairs on farm equipment. This tax would apply to repairs of farm machinery, construction machinery, mining machinery, industrial equipment used in restaurants, and capital equipment used for manufacturing, mining, and fabricating. One dairy farmer told me this new tax would cost him up to $70,000 alone next year. Who can afford that?!
Repealing these two tax increases has now become a bipartisan issue. Governor Dayton recently stated that he favors repealing both the warehousing tax and the tax on farm equipment repairs. While I’m happy he and Democrat legislators now have seen the error of their ways and support making the repeal of the farm equipment tax a part of the special session, repealing the warehousing tax must be on the agenda as well.
Minnesota farmers and Minnesota small business owners simply cannot afford to wait until late February to hope the legislature will do the right thing to get rid of these onerous burdens on their livelihood. After first providing relief for the victims of the June storm, we must immediately act to provide relief for the disaster Governor Dayton and the Democrats imposed on Minnesota during the 2013 legislative session.
Tomorrow morning I’ll be on Twin Cities News Talk (AM 1130) with Jack Tomczak and Ben Kruse starting at 7:00 and going until 9:00. Be sure to tune in!
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