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Good news on state tax cuts

Minnesota legislators have been in special session for a week to pass state budget bills. They are still working on those, but they did get a significant piece of legislation finished last week.

Legislators agreed on a nearly $1 billion tax cut bill that focuses most of its benefits to businesses and workers impacted by COVID-19. Businesses that received federal Paycheck Protection Program loans won’t have to pay taxes on the loans, putting the state in compliance with federal PPP loan policy. Workers laid off because of COVID-19 who received federal unemployment benefits won’t have to pay taxes on that income.

That’s good news for businesses and workers who are struggling to recover from the impact of the pandemic.

The bill also includes provisions for $20 million to local governments to pay for youth homelessness prevention, an extension of the working family tax credit to include 19- and 20-year-olds, and an affordable housing tax credit for workforce housing, single-family homes and communities under 5,000 residents.

Considering that Gov. Tim Walz and the DFLers in the House were thinking of a billion dollar tax increase to fund spending programs not too long ago, this is a great development. The state’s economy is rolling, and the state’s revenue is rising.

The Legislature is still working on the budget bills. We hope they can wrap that up quicklyand keep the state’s economy moving in the right direction.

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