You’ve heard it before, but there is no denying the past year was unprecedented.
Unpredictability plagued Minnesota businesses across industries and sectors as we navigated and adapted to overcome an international pandemic that impacted just about every aspect of daily life. Retailers, convenience stores and other essential businesses faced even more complicated challenges as many of us could not go remote, figuring out how to keep our frontline workers and customers safe.
We all know that story by now, and are seeing some good news that gives us real hope. First, there is the recent announcement by Governor Walz of a plan and a timeline to fully reopen Minnesota’s economy. The other is that lawmakers came to an agreement this week that full federal tax conformity for the Paycheck Protection Program (PPP) will be passed in a June special session.
This is positive news for more than 100,000 Minnesota small businesses who took out PPP loans, but uncertainty still looms. We must ensure this bipartisan agreement to provide PPP tax relief actually makes it into law and isn’t lost because of other political squabbles at the Capitol. With a significant budget surplus and more money coming in from the federal government, this should have been done well before the May 17 tax deadline, but as it stands, lawmakers can still make this right.
When Congress passed PPP last year, those dollars were never intended to be taxed. They were meant to help bolster our economy and keep people employed. Many of Minnesota’s Main Street businesses wouldn’t have been able to keep their doors open or employees paid without that critical relief.
The bipartisan agreement by our governor and legislative leaders to return the state tax on PPP loans is the right thing to do, and now we must make sure to hold our elected officials accountable to this announcement. Our businesses are counting on those dollars, and are not only facing some uncertainty on when this becomes law, but also if they will have to file amended returns or if the Department of Revenue can return those dollars directly.
The outlined bipartisan agreement on PPP loans at the Capitol is an important step toward a robust economic recovery. Our local retailers and convenience stores are a part of what makes Minnesota thrive, and we are proud to employ thousands of Minnesotans in every corner of our state. We are grateful for bipartisan support to not tax PPP loans, and ask that our legislators hold true to their promise and get this done for Minnesota small businesses. Let’s stand together for Minnesota’s entrepreneurs, employers and Main Street businesses.
Lance Klatt is executive director of the Minnesota Service Station and Convenience Store Association. Bruce Nustad is president of the Minnesota Retailers Association.
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