Minnesota Small Businesses Need Real Relief, Not Short-Term Gimmicks

Date: March 15, 2022

The National Federation of Independent Business (NFIB) is calling on the governor and Minnesota lawmakers to provide relief for small businesses. NFIB appreciates the governor’s consideration of a gas tax holiday at the state and federal levels, but small employers in Minnesota are also wondering when the state will prevent the Unemployment Insurance “shutdown tax” from hitting Main Street.

Combined, the federal and state gas taxes add over 46 cents to the cost of a gallon of gas for Minnesotans. In recent years, the governor and progressive lawmakers in the Minnesota House of Representatives supported a 20 cent per gallon increase in the state’s gas tax. This year, they support a new fuel regulations that could add another 20 cents per gallon to the cost of gas.

“With more than $9 billion in state surplus and another $1 billion in unspent federal pandemic relief funds, temporary relief from gas taxes is nice but long-term relief from costly regulation and chronically high taxes is necessary,” said John Reynolds, NFIB State Director in Minnesota.

“Small businesses across the state are not only worried about the rising costs of fuel prices, but about how they’re going to afford their UI tax bills if the Minnesota House of Representatives fails to act by next Tuesday,” added Reynolds. “The only thing stopping real relief right now is leaders in the Minnesota House who are playing politics with the lives and livelihoods of small business owners.”

Minnesota’s Unemployment Insurance system is nearly $1.3 billion in debt to the federal government thanks to a surge in pandemic-related unemployment claims. UI payroll taxes will go up significantly unless legislation is passed by March 15. The current UI debt was caused by the pandemic and not the fault of small business owners, most of whom had no over pandemic restrictions that closed or significantly curtailed their businesses. The debt is unprecedented – far worse than even the 2008-09 recession. It means higher UI taxes for small businesses the rest of this decade or longer.

Here’s the deal: Many small businesses are in still in pandemic recovery mode – in January, a third of NFIB’s members reported sales were still down 25% or more from pre-pandemic levels. According to NFIB’s latest member survey, 26 percent of business owners are listing inflation as their top concern.

 

Related Content: Small Business News | Minnesota

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