Minn. businesses deserve tax relief

Published 9:27 am Friday, April 7, 2017

We hear businesses in our area and around the state who struggle competing with companies outside of Minnesota. Businesses in Austin and near the state border have it particularly difficult because a business could pick up and move less than 30 minutes away to a community across state lines with lower business property taxes.

Like homeowners, businesses in Minnesota pay property taxes to the school district, city and county, but they also pay a statewide business property tax that equates to about 30 percent of their total property tax bill. All businesses pay this cost — whether large or small and no matter where they are based. They pay it whether they own or lease property and regardless of whether they had a profit or a loss.

We believe it is time to reduce this tax.

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Minnesota’s commercial property taxes are among the highest in the country — No. 2 for commercial property taxes in rural areas and No. 7 for metropolitan properties. The tax increases based on an automatic inflator, going up by about $40 million per year. In 2016, the tax collected $863 million, which goes in the general fund.

A reduction in the state tax would not affect what is paid in local property taxes and would not shift any of the burden to homeowners. In talking with some local business officials, the saved money could be used for employee wages and development, insurance costs and to invest back into the business. Particularly in the midst of a workforce shortage, businesses are already strapped, looking at every option they can to reach out to potential and current employees. After too much more, companies may begin to ask if it makes sense to start a business in the state.

We encourage the Legislature and Gov. Mark Dayton to remember the role businesses play. Strong businesses are vital for strong communities — and ultimately a strong state.

Though we know the tax cannot be completely removed, we wish it could be reduced over a span of a few years and, if nothing else, placed off autopilot.