Walz’s PPP loan proposal would make about 93.5% of the 102,352 loans received by Minnesota businesses tax-exempt. The GOP-controlled Senate passed a law removing tax liability on all PPP loans, regardless of size. Companies have obtained forgiveness loans to pay wages during the pandemic. They are exempt from federal taxes, but forgivable loans are subject to Minnesota taxes. Walz’s proposed tax break on 2020 jobless benefits would comply with federal law as part of the new COVID relief plan signed by President Joe Biden this month, a change that Walz says will help 553,000 households . Minnesota Senate legislation would make only the first 18 percent of 2020 benefits tax-exempt.
Walz’s revised budget proposal removes his earlier plan to raise taxes on cigarettes. It reduces – but does not eliminate – the increase in corporate income tax. It would now rise to 10.8%, down from an earlier proposal of 11.25%, down from 9.8% currently. Walz’s revised proposal maintains his other tax hikes, including a new fifth level of income tax for top Minnesota earners and an increase in capital gains tax. Senate Republicans have said they will not support any tax hikes. “We don’t care about the tax increase. We don’t want it. We don’t need it,” Senate Majority Leader Paul Gazelka of R-East Gull Lake said in a statement. video.
Minnesota has a projected surplus of $ 1.6 billion, which has grown from a deficit in the period since Walz released its initial budget proposal in January. The projection does not take into account the $ 2.5 billion the state will receive from federal COVID relief legislation. On the downside, it also ignores inflation, which will make public services more expensive.