By Rep. Paul Anderson
With one week of activity remaining before the Easter/Passover break, the current legislative session is well past the halfway mark. And, although major funding bills don't usually come up until the final weeks of session, we haven't passed many policy bills to this point, either. The calendar for House floor action is heating up, but the pace of bills passed so far ranks among the slowest in recent memory.
We have spent many hours debating the merits of the governor's continuance of his emergency powers, which went into effect one full year ago. However, each time the resolution to end those powers is brought up, the DFL House majority blocks it. The Senate has passed that same resolution on several occasions with bi-partisan support, but since it must pass both chambers, it never gets any further.
With this being tax season, how the state deals with the money businesses received from the federal government in the form of forgivable PPP loans is generating a great deal of interest. We have already gone past the March 15 deadline for business tax filing, and it was hoped we could have completed action on this conformity issue by the April 15 individual filing date.
However, the IRS announced last week they were extending the April date to May 17 for individuals filing their federal returns. And over the weekend the Minnesota Dept. of Revenue announced that they, too, would be extending the deadline for those filing their state returns. While that is good news, my concern is that the extension will also allow the Legislature to take more time before coming up with a tax bill.
There is a great deal of public pressure for our state to allow conformity on the PPP issue, along with a similar situation relating to the tax treatment of federal benefits to those who collected unemployment last year. Like the federal government, none of our neighboring states is taxing the PPP revenue. In addition, the IRS is allowing approximately $10,000 in unemployment benefits to be tax-free.
Minnesota doesn't automatically conform to federal tax law, an example being the struggle we had last year with conforming to the IRS in relation to Section 179. We need to pass legislation to do that, and the sooner the better. Already, businesses who have filed under current law will need to file amended returns if and when we finally pass this latest conformity issue. It was looking like a similar situation for individual filers on April 15 until the May extension was granted.
That same date, May 17, is the day the Legislature is scheduled to adjourn. There is a concern that the tax plan the House majority finally puts together will contain the aforementioned tax breaks, but will also contain other tax increases. Despite the state having over a $1 billion surplus, the governor is still calling for tax increases, although they have been scaled back from his earlier proposal. And in debate on the House floor last week, DFL leaders wouldn't agree to bring up the PPP and unemployment tax breaks in a clean bill, one with no additional tax increases included.
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