Minnesota Opinion: Legislature can agree on tax repair, if nothing else

Recall back in 2018 when state lawmakers failed to bring Minnesota’s tax code in line with federal tax rules that had been overhauled. Their failure turned Tax Day 2019 into a nightmare for many Minnesotans. And pricier, as many preparers charged more because of the unnecessary complexity left behind by St. Paul’s inaction and because of the extra time needed to essentially complete two different returns. Exacerbating all of that was the new federal tax law’s elimination of a deduction for tax-preparation fees.

A year later, the Legislature passed a tax-conformity bill and then finally brought the state’s tax code more fully in line with the federal overhaul via a measure in the bonding bill in 2020.

The tax-conformity problem now? The federal Paycheck Protection Program for small businesses, meant to help them survive the economic hardships of the COVID-19 pandemic, features loans that are forgivable as long as they’re used to cover qualifying costs and 60% to cover payroll. Minnesota, however, still does not automatically conform to federal tax law changes, so state legislation is needed so that forgivable PPP loans aren’t taxed here and the federal deduction is allowed here.

“More than 100,000 Minnesota businesses participated in the PPP loan program. Without (legislation from St. Paul now), many small and mid-sized businesses — already struggling due to revenue losses — will face further tax burdens,” the Minnesota Chamber of Commerce said in a statement this week. “It is critical to conform to federal tax law as soon as possible in the 2021 session as the final tax payment is due April 15.”

The chamber urged business leaders and others statewide to contact Gov. Tim Walz and legislators to urge immediate action. The 2021 session is already underway. “Urge them to conform to federal PPP tax loan forgiveness and allow deductibility of expenses on Minnesota income tax returns,” the chamber instructed.

It seems a no-brainer, ensuring Minnesota businesses that already are struggling are able to receive, without a tax penalty, the assistance allocated for them to get them through a period of unprecedented challenge.

It also seems an easy early-session bipartisan win, perhaps leading to more cooperation and compromise, better lawmaking, and a focus appropriately on the needs of Minnesotans ahead of the priorities of the DFL and Minnesota Republican parties.

Of course, nothing seems politically easy right now — not even at the state level or in the land of Minnesota Nice.

A town hall-like legislative discussion this week reminded online viewers of that. The event “quickly devolved into a yelling match about (last week’s) deadly U.S. Capitol riot,” reported Forum News Service, which hosted the discussion and is owned by Forum Communications.

The public roundtable with legislative leaders is held annually by the news service and typically is a low-key but informative opportunity for nonmetro Minnesotans to learn about session priorities and what to expect.

This time, though, “Gloves came off as the lawmakers shouted over one another while also calling on their opponents to tone down the rhetoric — raising questions over the tone of political negotiations that affect Minnesotans’ lives most during this year’s legislative session,” Forum News Service’s Sarah Mearhoff reported. “The arguing continued for the better part of the hour-long event, punctuated by a shouting match between (state House Speaker Melissa) Hortman (DFL-Brooklyn Park) and (House Minority Leader Kurt) Daudt (R-Crown).”

While both parties can accept responsibility for the partisan thuggery that increasingly is failing Minnesotans and all Americans, it’s the unwillingness of Republicans right now to acknowledge and accept the results of an election declared fair and without widespread fraud by governors and secretaries of state in all 50 states, by election officials from coast to coast, and even by Republican Attorney General William Barr that is pushing our nation to the brink. Violent language used by Trump and his supporters directly led to the deadly riot at the U.S. Capitol last week.

As they should have done weeks ago, Republicans need to forcefully indicate there was no mass fraud in the election. They need to denounce and put to rest these false claims so our nation can heal, move on, and get back to working together, without fear of uprising, in our streets and in our capital cities.

Minnesota Republicans also need to work with DFLers — soon, this week even, with the need perhaps never greater for a bipartisan victory — to pass legislation so small businesses buoyed by the Paycheck Protection Program aren’t made to endure a tax penalty because of it. Like the rest of us, they’ve suffered enough.

This editorial is the opinion of the Duluth News Tribune Editorial Board.