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Legislative News and Views - Rep. Dean Urdahl (R)

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Urdahl bill to protect shuttered venues from state tax on relief funding advances

Wednesday, February 23, 2022


ST. PAUL – Legislation Rep. Dean Urdahl, R-Acton Township, authored to protect venues shuttered during the COVID-19 pandemic from paying state taxes on federal relief has cleared its first House committee hurdle.

The Minnesota Legislature already has exempted businesses from state taxes on federal Paycheck Protection Program dollars. Urdahl said theaters and other venues ordered closed amid the pandemic remain exposed to state taxes on other federal relief, leaving Minnesota as the only state in the union that has failed to address this issue.

“A lot of businesses were helped during the pandemic, and we made adjustments to ensure their federal aid was not taxed by the state,” Urdahl said. “The Shuttered Venues Operators Grants somehow fell through the cracks when other corrections were made, such as with PPP funding. Once again, it makes no sense to provide crucial assistance to businesses the state shut down, and then turn around and tax that lifeline.”

Reports indicate 253 Minnesota small businesses and nonprofits received the SVOG funds. Urdahl’s bill (H.F. 2793) is retroactive to tax year 2020. It received a hearing in the House Taxes Committee on Tuesday and has been set aside for possible inclusion in an omnibus bill this session.

Urdahl said the governor proposes action similar to the bill he has authored.

“It would be a shame for Minnesota to tax struggling businesses at a time when the state has a historic surplus that could be in the $10 billion range,” Urdahl said. “We need to do what’s right for these businesses, and I am guardedly optimistic with this bill.”

In December 2020, the federal Consolidated Appropriations Act established the SVOG program to support theatrical venues closed due to COVID-19 restrictions. The American Rescue Plan Act also enacted grants in March 2021. The grants were available to live venue operators and promoters such as theatrical producers, live performing art operators, museum operators, zoo and aquarium operators, motion picture theater operators and talent representatives. Grant funds were limited to specific uses such as wages, rent, mortgage obligations, utilities and maintenance and administrative costs.