MHTA – MHTA, in partnership with LifeScience Alley, heard from the four Minnesota legislative leaders at the Science Museum of Minnesota. It was opportunity for members to listen to and share feedback on the budget proposal currently before lawmakers.
A key piece of the proposal from Governor Mark Dayton would drop Minnesota’s sales tax from 6.875 percent to 5.5 percent, but the lower rate would also apply to a host of new services and some products. Taxes on computer and technical services would generate the most revenue according to estimates by the Minnesota Department of Revenue. A categorical breakdown shows those transactions could yield $472 million in revenue over the 2014-15 budget cycle, according to various media reports. Collections from legal services, businesses, advertising and architectual firms could account for roughly another $300 million each.
The administration’s list services impacted includes computer services such as programming and design, facilities management, data processing, hosting and related services. Management consulting services are also included, such as science and technical consulting. Employment and business support services would also be taxed along with advertising and related services.
The Dayton Budget: What would be taxed?
MHTA and LifeScience Alley testified in opposition to another budget proposal that would repeal Foreign Royalty Deductions (SF 10). MHTA President and CEO Margaret Anderson Kelliher told lawmakers the change would penalize companies large and small that host research and development work in Minnesota.
The Minnesota Senate Tax Reform committee amended the bill to increase the R&D tax credit to 4.5% from its current 2.5% level. You can read more about the impact of the Foreign Royalty Deductions on Minnesota technology and innovation businesses here.
MHTA’s Government Affairs committee meets biweekly throughout the legislative session. You can find out more information about meetings and MHTA’s legislative agenda at MHTA.org.