Today, the Minnesota House of Representatives approved a bipartisan compromise with the Minnesota Senate that will provide targeted tax cuts to workers and small businesses harmed by the pandemic, expand the Working Family Tax Credit, and provide new aid for counties to fund services and programs that prevent family homelessness.
“This is a tax bill that helps both workers who lost their jobs and the small businesses that fell on hard times during the pandemic,” said Rep. Paul Marquart (DFL-Dilworth), chair of the House Taxes Committee. “As Minnesota rebounds from a global pandemic, there is more work to do to level the playing field, bring about more fairness in our tax system, and fund important investments in people.”
The Legislature’s bipartisan tax bill uses federal aid from the American Rescue Plan to provide targeted tax cuts for workers who received unemployment insurance benefits and small businesses that received federal Paycheck Protection Program loans. Democrats say a deal without benefits for both workers and small businesses would have been unacceptable.
“Our bipartisan tax bill will help workers, families, and businesses most impacted by the COVID-19 pandemic,” said House Speaker Melissa Hortman. “It’s time to look forward to a robust recovery from a challenging year, and this tax bill sets Minnesotans up for economic success as we leave COVID-19 behind.”
County governments will receive $20 million annually over six years to fund projects and programs that prevent family homelessness. The bipartisan agreement also expands the Working Family Tax Credit to Minnesotans without children down to age 19 from age 21.
“Minnesotans' needs are not being met by current levels of investment,” said Majority Leader Ryan Winkler. “We can fully fund public schools, expand access to affordable health care, and help all Minnesotans get ahead if we tax the rich. People and corporations that have done extremely well in recent years can afford to contribute more to a state that helped them become so successful.”
“After months of committee hearings and public discussion, our divided Legislature agreed to pass a tax bill that focuses on making sure folks can build back after COVID-19 and recover,” said Rep. Cheryl Youakim (DFL-Hopkins), chair of the House Property Tax Division. “This is a fair and balanced bill. It will provide flexibility on Tax Increment Financing for cities to aid in the development of affordable housing and economic development projects, allow for energy improvement projects as well as enable local communities to better serve their citizens.”