Small business legislative wrap up

Small-business property tax relief passed

Property tax remains a top concern of many Small Business Minnesotamembers.Small Business Minnesota testified in favor of the new law that exempts the first $150,000 of small-business property value from the statewide general property tax. This law applies to commercial and industrial property valued at less than $1.1 million. The state chamber of commerce testified against this.  (Photo: SBM director, Audrey Britton, testifying before the MN House tax committee. Also pictured, Rep Diane Loeffler)

Other 2014 tax laws affecting small business owners

Small Business Minnesota has long argued that 99.7 percent of businesses in Minnesota are small businesses, yet 99 percent of business-related public policy favors big business. The legislature is beginning to understand. In addition to the property tax relief, other 2014 tax law changes affecting small business include:

• Small-business employers can offer tax-free tuition.
• Small-business employers can offer tax-free adoption assistance.
• Small business taxes have been simplified by eliminating requirements to maintain separate records for federal taxes.
• Sales tax relief to businesses.
• More middle class business owners and their employees now qualify for the Working Family Tax Credit and childcare tax credits.

Business-to-business services taxes repealed

Economically inadvisable business-to-business services taxes that passed in 2012-2013 session were repealed in the 2013-2014 session. Small Business Minnesota met with and wrote to key legislative leaders before the session began. We were assured that, in all likelihood, these taxes would be eliminated. Prior to session start, Governor Dayton also signaled that these taxes would be repealed.

Women's Economic Security Act becomes law

This fact sheet outlines key laws in the Women's Economic Security Act.  Some requirements affect all businesses. Other requirements only affect businesses with more than 21 employees, others with more than 41 employees.

Minimum wage increase adjusted for small businesses

Small Business Minnesota expressed general support for a reasonable minimum wage increase. Our members faced a competitive disadvantage when paying above minimum wage while other employers pay subpar wages to employees who have little or no bargaining power.

However, Small Business Minnesota favored biennial small increases rather than once-a-decade double-digit increases proposed in the past two sessions. We also requested consideration for training and youth wages, and wages from non-employer sources (tips).

The legislature agreed to:

• a lower minimum wage for small businesses
• a youth and training wage
• implement the new minimum wage increase over a 24 month timeframe
• review minimum wage for nominal increases each year rather than once every decade

Minnesota's minimum wage increases Aug. 1, 2014 through Aug. 1, 2016 as follows:

Small employer* (and youth) state minimum wage**

$5.25/hour currently
$6.50/hour on Aug. 1, 2014
$7.25/hour on Aug. 1, 2015
$7.75/hour on Aug. 1, 2016

*Defined as annual gross volume of sales made or business done less than $625,000
**See a list of employees exempt from minimum wage

90-day training wage

$4.90/hour  currently
$6.50/hour on Aug. 1, 2014
$7.25/hour on Aug. 1, 2015
$7.75/hour on Aug. 1, 2016

More details on state and federal minimum wage including exemptions, handouts and postings, Minnesota Department of Labor and Industry.

Transit and transportation

This session and previous sessions, the legislature failed to sufficiently fund transit and infrastructure needs, leaving about 40 percent of the state's critical projects unfunded. Small business owners need a strong transit/transportation system to bring goods to market, get employees to work and bring customers to our doors.

Small Business Minnesota spoke at Transit Day on the Hill, published a letter to the editor and became a member of MoveMN, an advocacy group focusing on statewide transit and infrastructure. Small Business Minnesota will continue to advocate for adequate funding. Governor Dayton has said he will make this a 2015 legislative priority.  (Photo: Audrey Britton, SBM, speaking at the Transportation Day on the Hill at the Capitol.)

MNsure and affordable healthcare

During the 2012-2013 legislative session Small Business Minnesota was instrumental in changing the state's health insurance exchange bill to better meet the needs of small business owners.

While no legislative action was taken on the health insurance exchange (MNsure) this session, Small Business Minnesota met with the MNsure chair, its new CEO and other MNsure staff to express our concerns over the rollout debacle, poor staffing decisions and weak, if not absent, representation of small business on the MNsure board and advisory committees.

The state's health insurance online and call in enrollment system has greatly improved and enrollment numbers have exceeded expectations. Today, 95 percent of all Minnesotan's have insurance, second only to Massachusetts. MNsure leaders also made significant staff changes.

A reminder to small business owners:

Health insurance through MNsure is available to small businesses anytime throughout the year. If your small business is eligible for insurance-related tax credits, you may now only obtain these credits through MNsure. Additionally, insurance-related tax credits began in 2010 and you may apply for them retroactively.

Net neutrality and Internet access 

Small Business Minnesota has been in contact with state and federal elected officials expressing support for Internet neutrality to ensure all businesses have equal access to the Internet. We also support Internet access for the 500,000 Greater Minnesota businesses, customers, employees and students who do not have adequate access.

This session, the state issued $20 million to help provide Internet access in Greater Minnesota. This is a start.

New LLC laws

B-corps come to Minnesota.  
Small Business Minnesota supported a bill that became law allowing LLCs to form as "corporations for public benefit." These LLCs fit between a nonprofit and a for-profit. Read more here.

Minnesota passes Uniform Limited Liability Company Act
200,000 LLCs are affected by this law. Small Business Minnesota member Thompson Hall Santy Cerny Dooley played a role in creating the bill. See their summary for more information.

Education for our future workforce 

Small Business Minnesota expressed support for investments in education for a ready workforce tomorrow, especially following 10 years of education cuts.

Small Business Minnesota supported:

• More closely matching education to careers
• Increased efforts to involve small businesses with internships and educational partnerships
• Broadening science, technology, engineering and math (STEM) education
• Relevant and up-to-date training in our technical schools
• Addressing skyrocketing college costs and restoring funding so all people who have the ability and the interest can attend post-secondary schools
• Early childhood/family education
• Supportive school initiatives that create a safe learning environment

Dozens of education-related bills passed this session. All money taken from our schools was paid back in full. For our future workforce, tuition was frozen at state colleges and universities. All-day kindergarten gained funding. The state made its first real investments in early childhood and family education. Laws passed to help ensure children feel safe while at school and to make sure students do not go hungry, both barriers to learning. Some funding for internship partnerships and STEM education was increased.

Minnesota continues to have one of the nation’s worst achievement gaps in education and employment. These gaps have been compounded by an increase in poverty, lack of affordable healthcare, a shortage in permanent housing and unsafe learning environments. The legislature must continue to take a comprehensive, long-term, career-focused approach to addressing the needs of tomorrow's workforce.

Predatory lenders targeting small business owners

Predatory lenders are targeting small business owners. A bill to cap interest rates below 400 percent and limit the number of loans a predatory lender can make to an individual was making its way through the committee process. Late in the session, the Minnesota Citizens Concerned for Life made this a scorecard issue, meaning legislators who voted in favor of the bill would receive a lower rating from this organization. Progress halted.

Background: The session before last, a bill was brought to the House floor without making it through the committee process to loosen regulations on predatory lenders. Minnesota is known for having among the weakest predatory lender regulations in the state. The state's largest predatory lender is also one of the state's largest campaign donors.

The typical market for a predatory lender is shrinking. The marketing is "tapped," meaning they have reached as many people in this market as possible, and the economy is improving which means their markets are shrinking.  Small business owners who often times have difficulty securing capital have become a new target.

Minnesota's $25 billion in tax expenditures

Tax expenditures are expenses above and beyond the state's $37 billion biennial budget.

No action was taken to put Minnesota's tax expenditures on the docket for regular review and sunset. State economists and auditors have drawn attention to this concern calling our state's tax expenditures "out of control" and on "automatic pilot." When it comes to business-related, tax expenditures go almost exclusively to big businesses even though Minnesota's small businesses employ over half the state's workforce.

Sustainable business practices

Small Business Minnesota expressed support of sustainable business practices so businesses can thrive into the future, and employees, customers and their families remain healthy.

This session, lead and mercury prohibitions were increased. Some toxins are no longer allowed in the production of children's products. Triclosan can no longer be included in cleaning products. The Toxic-Free Kids Act did not pass.

Misrepresentation on business filing with the SOS

Under current law, when filing or renewing a business filing with the Secretary of State, in most states; the "president" does not have to be the person who owns or gains financially from the business. An "anonymous" business can avoid paying taxes and/or more easily engage in illegal activity. When some businesses don't pay taxes, small businesses pick up the slack. 

Small Business Minnesota has begun to pursue this legislation at the federal level. Efforts have stalled, more than likely, due to filings being tied to state budgets.

Impartial justice affects small businesses

Small Business Minnesota supports impartiality in the justice system so that judges cannot preside over cases of their big-business campaign contributors or former business partners. Doing so gives big business an unfair advantage over small businesses. No related laws passed this session.

Citizens United

Small Business Minnesota supports overturning Citizens United which allows corporations to pour unlimited amounts of money into campaigns. This gives big business another unfair advantage over small businesses in the public policy arena. No related laws passed this session.

About Small Business Minnesota

Small Business Minnesota is a nonprofit, nonpartisan membership organization of business owners in Minnesota who have less than 100 employees. We offer public advocacy, educational forums, networking opportunities and the latest small business news and resources. www.smallbusinesmn.org