ST. PAUL – State Rep. Matt Bliss, R-Pennington, is co-authoring a bill (H.F. 2728) to spare local businesses from suffering a tax increase he deems unnecessary, especially with a $7.7 billion state surplus.
On March 15, business owners face a 15% or more payroll tax hike. Bliss said this is due to record-setting unemployment claims that depleted Minnesota’s Unemployment Insurance Trust Fund amid the COVID-19 pandemic. The federal government provided more than $1 billion to make up for the shortfall. Now, to account for that deficit, Minnesota payroll tax rates are set to increase unless the Legislature acts.
“The fact more people were out of work during a pandemic is not the fault of our businesses and they should not be expected to pick up the tab,” Bliss said. “The state is bursting at the seams with revenue, so let’s fix this now and give our businesses certainty. They’ve had a hard enough time the last couple of year and the last thing they need is for the state to add to their burden.”
The Minnesota Senate Finance Committee has unanimously approved a bipartisan unemployment insurance repayment bill. House Democrats then advanced a proposal on a party-line vote to repay the unemployment insurance trust fund only partially.
Under the House Democrat proposal, the UI fund would only be repaid to $0, rather than the full repayment proposed by House and Senate Republicans, as well as Gov. Tim Walz. The Department of Employment and Economic Development has confirmed that failure to fully repay the trust fund would still trigger six years of increased tax rates for businesses.
Bliss also said Minnesota House Democratic leadership has indicated it wants the UI tax relief to be packaged with other DFL priorities, which he said would at the very least delay progress.
“Let’s not play games with this issue and spare businesses from this unnecessary tax as soon as possible,” Bliss said. “The funding is available and tax relief is a top priority this session, but the clock is ticking. There is no reason to make this issue more complicated than it is, so let’s just pass a clean bill.”
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