Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Legislative News and Views - Rep. Nathan Nelson (R)

Back to profile

Rep. Nelson Legislative Update

Friday, February 11, 2022

Hello from the State Capitol,


Every business owner with at least one employee will soon see significant tax increases unless legislative action is taken within the next few weeks.


It seems almost unbelievable that any tax increase would be moving forward when the State of Minnesota is sitting on a nearly $8 billion budget surplus, yet here we are.


On March 15, business owners will face a 15% or more payroll tax hike. This is due to record-setting unemployment claims that depleted Minnesota's Unemployment Insurance (UI) Trust Fund at the start of the pandemic. The federal government provided more than $1 billion to make up for the shortfall. Now, to make up for that loss, payroll tax rates are set to increase.


This week, a bill was heard in the Minnesota House Workforce and Business Development Policy and Finance Committee that would allocate more than $1 billion in American Rescue Plan Act of 2021 funding to replenish the Unemployment Insurance Trust Fund. It’s true: in addition to our $7.7 billion surplus, we also have more than $1 billion from the federal government that must be allocated for some COVID-related purpose.


Having your state’s unemployment insurance trust fund account depleted during the pandemic is a COVID-related purpose.


Not only does this tax increase need to be stopped, but it also needs to be stopped quickly. Minnesotans will be paying for this tax hike in some fashion, whether its with higher prices for the products or services we purchase from the impacted businesses, or whether we use surplus dollars. As every one of us is dealing with cost-of-living increases on food, gasoline, energy and almost every other product, to me it makes much more sense to utilize the federal COVID relief revenue to pay back what we owe.


Hopefully a stand-alone bill that eliminates this local business owner tax increase will be passed quickly, and not used as a bargaining chip later on. This is one proposal that cannot wait until the end of session for passage, as Minnesotans will be directly paying for any delay.


Have a good weekend,