MBP Letter: Repeal B2B taxes in special session

August 14, 2013

Dear:
Governor Mark Dayton
Speaker of the House Paul Thissen
Senate Majority Leader Tom Bakk
House Minority Leader Kurt Daudt
Senate Minority Leader David Hann

As you prepare for the special session tentatively scheduled for September 9th, we urge you to include the repeal of recently enacted business to business (B2B) taxes on the agenda. These new taxes place Minnesota businesses at a competitive disadvantage and undermine job growth. The B2B taxes that should be repealed are:

• Labor service charges for repair and maintenance of business equipment
• Purchases of telecommunications equipment by telecommunications providers
• Storage and warehousing services of business related goods

These new taxes make Minnesota an outlier, imposing substantial new costs on Minnesota companies that their competitors typically don’t pay. Further, these hidden taxes are regressive and negatively impact consumers and employees through higher costs for goods and services and lower wages.

While we appreciate the support expressed for exempting farm equipment from the sales tax on business equipment repairs, carving out an exemption only for farm equipment is inadequate and unfair to the thousands of other Minnesota businesses who are also burdened by this tax. The new B2B taxes will increase costs for virtually all businesses in Minnesota. These taxes will negatively impact many industries in Minnesota, including manufacturing, printing, petroleum, telecommunications, retailers and mining.

We appreciate your concern for Minnesota’s jobs climate. Eliminating all three B2B taxes would improve our ability to grow and create jobs in our hyper-competitive global economy. We request your support in eliminating all 3 of the B2B taxes. Thank you for your consideration.

Sincerely,

Charlie Weaver
Executive Director