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Business North - The Daily Briefing - Business Newspaper Online
Repealing B2B taxes is Chamber's highest priority
PHOTO: Bill Blazar
Minnesota would retain a sizeable budget surplus even if legislators, during their upcoming session, eliminate the business-to-business (B2B) taxes they approved in 2013, a top Minnesota Chamber of Commerce executive said in Duluth Tuesday.
With a $1 billion projected surplus, the state would lose about $300 million in revenue by dropping the B2B tax, said Bill Blazar, Minnesota Chamber senior vice president for public affairs and business. Eliminating that tax, he said, is the group’s top priority during the upcoming legislative session.
The tax is applied in three ways. It’s charged on labor for repair and maintenance services, on equipment purchased by telecommunications providers and, beginning April 1, on leased warehousing space. That’s of particularly interest in port cities such as Duluth because it will affect bulk commodities such as iron ore.
The 7.5 percent warehouse tax creates “a huge change in the competitive situation, because the margins in that industry are razor thin,” particularly because similar space is available across the harbor in Superior. Wisconsin does not charge a similar tax.
The same is true, Blazar said, for repair services, which also can be obtained across the border.
Addressing a morning Duluth Area Chamber of Commerce gathering, he listed four other priorities:
• Further streamlining of the environmental permitting process.
“Our request is that we shorten the amount of time, we give applicants a specific budget and at the end of that period of time, we give them a decision. We need to add certainty to both the time and cost of getting a permit.”
• The state should make regular investments into the transportation infrastructure. Key to reaching that goal is to substantially increase the efficiency of delivering transportation projects in Minnesota, Blazar said.
“If the legislature doesn’t push the efficiencies and make it absolutely clear to MNDOT that we expect them to deliver 15 percent efficiencies, we will have lost an opportunity,” he said. “We’ve got to drive that point home.”
• K-12 education reforms approved in the 2010 and 2011 are being rolled back. That must stop, Blazar said. As an example, he pointed to a former requirement that high school graduates must pass a knowledge test before they receive a diploma. That rule was modified so that grads must take the test, but they don’t have to pass it.
“I don’t understand the logic of that,” he said. “Our fear is that our next step will be to roll back the requirement that our teachers must take the basic skills test to teach in Minnesota.”
• On healthcare, he suggested Minnesota go back to its 2008 reform agenda, and on energy, he said the legislature should reassess the way electric rates are set. The Chamber believes rates should reflect the actual cost of delivering electricity to customers.
Supporters of projects that were not included in Gov. Mark Dayton’s $1 billion proposed bonding budget face an uphill battle, Blazar predicted. At the least, they should ask their legislator to introduce the project in a separate bill, if only to attract some attention for future consideration, he suggested.
There likely will be a successful effort to raise the minimum wage, he said. The Minnesota Chamber views low-paying jobs as “an introduction to the world of work” and favors having a minimum that conforms to federal requirements.
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