Legislators met in St. Paul yesterday for a "special session" called by Governor Mark Dayton to address storm relief for parts of Minnesota.  After a few hours of procedural work, Legislators passed a $4.5 million storm relief package designed to facilitate Minnesota's acceptance of federal disaster funds.

Although prior to the special session there were discussions indicating a possible repeal of several business to business taxes enacted in the final hours of the 2013 legislative session, legislative leaders stayed focused on appropriating funds to leverage federal disaster dollars. Several business groups, including the Minnesota Retailers Association, had hoped for a repeal of a controversial business storage and warehouse tax that kicks in April, 2014.
 
Senate Majority Leader Tom Bakk ended the possibility of expanding the special session to issues beyond storm relief by calling such a move irresponsible, stating it would lead to an unbalanced state budget in the short term. Bakk added that until the State's November budget forecast is out there is no guarantee repealed taxes could be replaced with surplus revenues.
 
Also not addressed in special session was a left over issue from the 2013 session--a proposed increase of Minnesota's minimum wage to $9.50 by 2015. Efforts to "Raise the Wage" were prominent at the Minnesota State Fair, with a survey of 7,000 fair-goers conducted by the Minnesota House of Representatives showing 61 percent in favor of a $9.50 minimum wage.
 
DFL leadership in the Senate indicated during the special session that at the top of the priorities list for the 2014 Legislative session are passing a minimum wage increase and a bonding bill. The next regular session of the Minnesota Legislature kicks off February 25.
 
If you would like more information about special session results, please contact Rochelle Westlund at (651) 227-6631 or This email address is being protected from spambots. You need JavaScript enabled to view it..

Governor Mark Dayton Minnesota Governor Mark Dayton is openly discussing bringing legislators back to the Capitol in September for special session to deal with storm relief. Business groups are pushing to add a repeal of recently enacted business to business services to that special session agenda.

Eighteen Minnesota counties have been approved for $17.8 million in federal aid for damage caused by June storms. Governor Dayton originally intended to call a special session to address only this issue, however the Governor has now indicated he is open to expanding the scope of the special session to include the repeal of the sales tax on farm equipment repair.

Business groups would like to see that list of possible appeals expanded to other business to business services including:
- Labor service charges for repair and maintenance of business equipment;
- Purchases of telecommunication equipment by telecom providers; and
- Storage and warehousing services of business-related goods.

Others would like to see the scope of a special session further expanded. Minnesota Representative Ryan Winkler, author of the minimum wage increase bill in the House, would like to use the special session to pass a minimum wage increase bill.  Rep. Winkler has commented that he doesn't feel workers should not have to wait until 2014 for that increase.

Although the Governor has not indicated that the special session would include debate on minimum wage, conversations about the issue continue.  The Select Committee on Living Wages, chaired by Rep. Winkler, is meeting in Brainerd on August 19 to discuss Minnesota's economy.

For more information on a potential special session, contact MnRA's director of government relations, Rochelle Westlund, at This email address is being protected from spambots. You need JavaScript enabled to view it., or call (651) 227-6631.

The following commentary by MnRA's Bruce Nustad was published in the Star Tribune August 5, 2013.

Minnesota’s retail economy is important — 788,000 jobs depend on it. But many of those jobs are at risk because of a decades-old loophole that gives out-of-state, online-only retailers an artificial advantage over retailers in our communities. This is a problem that has plagued Minnesota retailers of all sizes, costing us local jobs and economic growth.

In May, following years of bipartisan Internet sales tax collection work by the Minnesota Retailers Association, the Legislature passed and Gov. Mark Dayton signed a new law designed to compel online-only retailers doing business in Minnesota to play by the same rules as local retailers.

But to truly close this loophole and restore basic free-market competition, we need Congress to act.

Some online retailers have made the business decision to sever relationships with Minnesota business partners in order to avoid collecting sales tax on transactions here. Many Minnesota Retailers Association members offer options for businesses dropped from affiliate programs. However, the long-term solution to this problem was endorsed by Amazon in its notice to affiliates ending their relationships — enactment of the federal Marketplace Fairness Act.

The Marketplace Fairness Act, already passed by the U.S. Senate but awaiting action in the U.S. House, represents tax reform that will be good for Minnesota’s retail diversity and our economy. It will end special treatment in the tax code for online retailers and give all businesses a chance to compete on price in a free market.

In a recently unveiled study, former Reagan administration economist Arthur Laffer emphasizes this important step in tax reform as “giving states the power to require online-only retailers to collect sales taxes as part of a transition to a more progrowth tax structure.”

Laffer — famously no fan of taxes — makes the conservative case for closing loopholes and lowering tax rates to spur economic activity and job growth.

Laffer’s study examines potential economic growth resulting from passing the Marketplace Fairness Act, concluding that Minnesota alone could see 24,760 new jobs by 2022 after closing the online sales tax loophole and allowing the state to lower tax rates.

And the Marketplace Fairness Act isn’t just good for Minnesota. Laffer projects an increase in the nation’s prosperity — 1.5 million new jobs in the next 10 years. That adds up to more than $563 billion in added gross domestic product.

Minnesota has done what it can at the state level to help our Main Street retailers. To finish the job, we need the U.S. House of Representatives to act. Laffer has provided a road map to prosperity for our lawmakers: close loopholes, lower tax rates and restore the free market.