Minnesota business owners fear passage of new tax

5/18/2011

Minnesota Governor Mark Dayton has proposed a new tax law that would affect business owners who pay their company taxes through individual income tax. With access to commercial loans still tight, this has caused many local politicians to question whether the legislation would cause many small businesses to close shop and leave the state.

According to speaker of the house Kurt Zeller, nearly 92 percent of Minnesota small business owners pay through individual income taxes. Zeller fears that passing the legislation would cause startups, which are the primary job creators of the state, to pursue ventures elsewhere.

"Minnesota already has one of the most progressive tax systems in the country, and certainly one of the top marginal rates in the country," Tom Hesse, vice president of government affairs for the chamber, told the Twin Cities Daily Planet. "If you do increase that [tax] burden, you make the state less competitive compared to other states around the country."

Paying taxes is already a top burden among many small businesses, with many investing countless time organizing their financial information and spending thousands on accounting services.