Minnesota has the third highest corporate income tax and fifth highest personal income tax rate in the country. In addition, we are one of the few states that charge a business property tax, which is normally reserved for funding cities, counties and school districts. We support continually reducing these tax rates, especially since many small business owners report income through their personal tax returns.

 

When businesses were shut down early in the pandemic, hundreds of thousands of workers accessed unemployment insurance for an extended time. This emptied the Unemployment Insurance (UI) Trust Fund, which now has a deficit of over $1 billion. If policymakers don’t act, employers will be hit with double-digit payroll tax increases this spring.

 

Faced with a historic workforce shortage, Minnesota businesses have dramatically increased wages and benefits to attract and retain talent. We oppose state interference in the form of new mandates, including proposals that would force employers to pay additional taxes (similar to unemployment insurance) that enable employees to take up to 24 weeks of paid sick and family leave time each year.

 

Minnesota businesses are subject to a special payroll tax that generates over $150 million for workforce development programs that many employers do not use. We envision a more collaborative approach in the development of these programs, further alignment between business and education, and a tax credit to support those who train and develop their own employees.