Saint Paul – (March 22, 2012) – The Minnesota House of Representatives today approved the Tax Relief and Job Creation Act by a vote of 72-62. The act is focused on three areas that will encourage long-term economic growth including statewide business property tax relief, investment in innovation and emerging industries, and job training and placement programs targeted toward Greater Minnesota and veterans.
“We need to do everything we can to make Minnesota a more attractive place to do business, encourage entrepreneurship and foster job creation,” said Speaker of the House Kurt Zellers (R-Maple Grove). “This will not happen with one-time spending focused on short term gain. Our Tax Relief and Job Creation Act is focused on business and employment growth, which will encourage long-term economic activity. It encourages businesses to stay here, expand here and create jobs here.”
The Tax Relief and Job Creation Act freezes the statewide tax on business property for one year and phases out the statewide tax on business property over 12 years beginning in 2014. It also excludes 70 percent of the first $150,000 of value for all business property in 2013, benefitting small businesses throughout the state especially those in Greater Minnesota.
“Minnesota’s business property tax rate ranks among the highest in the United States. Our property tax relief package helps create a stronger, competitive business climate by freezing the statewide business property tax rate for one year and phasing out this burdensome regressive tax to allow for more investment in products, services and employees,” said Rep. Greg Davids (R-Preston), chief author of the bill.
The Tax Relief and Job Creation Act also supports investment in technology and innovation, which will help make Minnesota a magnet for emerging and high growth industries. The Act
- Provides $5 million in increased funding for the Angel Investment Tax Credit. In 2011, the $16 million allocated to the program ran out in November resulting in numerous applications being rejected and Minnesota lost out on new jobs. The additional $5 million will result in more investment in Minnesota start-up companies.
- Increases the Research and Development credit by $25 million, which will encourage entrepreneurship and make Minnesota a more attractive place to do business.
- Provides an upfront sales tax exemption for small businesses. This will allow small business, less than $1 million and less than 20 employees, to invest in their business or hire additional employees rather than loaning that money to the state’s general fund.
- Establishes the Technology Corporate Franchise Tax Certificate Transfer Program, which allows small, start-up biotech companies in Minnesota to transfer or sell their net operating loss carryovers to larger, more profitable companies. This helps small businesses to gain access to an immediate infusion of cash so they can invest in their operations and hire more employees.
“Our investment in innovation is a long-term investment strategy in entrepreneurship, business development and job creation to help Minnesota become a magnet for the high growth businesses such as medical devices, bio technology and the life science industry,” Zellers said.
The Tax Relief and Job Creation Act also creates a internship grant program that is aimed at attracting and keeping talent in Greater Minnesota. The program, which is administrated through the Office of Higher Education, provides a grant of up to $1250 per intern to employers. The Act also creates a permanent tax credit of up to $14,400 for employers who hire veterans who are disabled, unemployed or receive food stamps.
The bill will now be referred to the Minnesota Senate for consideration.