Tax legislation takes shape

March 20, 2012

MHTA – Minnesota tax legislation is beginning to take shape with roughly a month to go in the 2012 legislative session.

After a week of committee hearings, the House Taxes Committee passed its Omnibus Jobs Bill (HF2337-Davids) Friday. MHTA has been following it closely because a cornerstone of our legislative agenda is to support tax policies that encourage investment in new technology and innovation.

HF2337 includes several provisions that MHTA has been advocating this session:

  • $5 million in increased funding for the Angel Investment Tax Credit. The $16 million allocated for the program in 2011 was spent by November and the program is on track to spend its entire $12 million appropriation this year. The additional $5 million appropriation will result in at least $20 million more investment in Minnesota startup companies – a critical component to maintaining Minnesota’s funding ecosystem.
  • Increase in the Research and Development Tax Credit second tier from 2.5 percent to 4.5 percent. MHTA supports increasing the R&D tax credit to 10 percent for all research and development because R&D is the foundation for a vibrant economy.
  • Upfront sales tax exemption for small businesses. MHTA supports expanding the exemption to all businesses because it allows businesses to keep the dollars they would loan to the general fund and instead invest in their business or hire additional employees.
  • Establish the Technology Corporate Franchise Tax Certificate Transfer Program. The program allows qualifying emerging technology companies to transfer or sell Minnesota net operating loss carryovers to early-stage companies to finance their Minnesota operations. The profitable companies infuse cash into early-stage companies while reducing their state tax obligation.

Sen. Julianne Ortman is releasing the Senate Omnibus Tax Jobs Bill tomorrow. MHTA will be watching the bill closely to ensure these same provisions are included. In addition, MHTA continues to work to include a provision in the tax bills to improve incentives to build data centers in Minnesota. MHTA supports lowering the investment threshold to $20 million and lengthening the investment timeframe to 4 years for the sales tax exemption for data centers established in 2011.

You can review MHTA’s entire legislative agenda in our Advocacy section. To become involved in MHTA’s public policy efforts, please contact Joanna Dornfeld.


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