ST. PAUL – The Tax Foundation recently confirmed what many business owners who have looked to expand or relocate their companies to our state have long known: Minnesota has an awful business climate.
Minnesota ranked 43rd nationally in terms of business climate according to the organization, due in large part to our state’s oppressive business tax rates and burdensome regulations.
State Representative Greg Davids (R-Preston), who chairs the powerful Minnesota House Taxes Committee, understands this is one of the main reasons southeastern Minnesota continues to lose jobs to Wisconsin and Iowa. This is why he’s proposing to phase out Minnesota’s corporate income tax in an effort to entice existing companies to expand and to lure out-of-state corporations to relocate here.
“If we don’t give businesses a reason to come to Minnesota, we will continue to lose jobs and revenues to other states,” Davids said. “Though revenue would be lost from the corporate income tax, I believe we would not only replace but substantially increase revenue to the treasury because more people would be working and paying income taxes.”
Under Davids’ bill, Minnesota’s 9.8 percent corporate franchise tax would decrease by 1 percent this year, and would be phased out entirely by the year 2020.
“Businesses in this state are tired of the tax uncertainty,” Davids said. “Many held off on hiring new employees over the past few years because they thought the Legislature was going to increase their taxes. Just imagine the possibilities of job creation and economic recovery in this state if job providers know they can invest in their company without fear of state government wanting more than its fair share.”