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Opinion: These new taxes should go

The DFL majority erred in passing several new taxes during the last session, and should take the opportunity provided by a special session to fix its mistakes.

We agree with the more than 350 businesses and associations from across the state that have asked Gov. Mark Dayton and legislative leaders to repeal all three new business-to-business sales taxes.

A special session has been tentatively scheduled for Sept. 9, but Dayton has not agreed to include anything other than disaster aid and the repeal of a farm equipment repair sales tax.

The United for Jobs Coalition, spearheaded by the Minnesota Chamber of Commerce and representing thousands of Minnesota employers, recently delivered the petition with the signatures to the Capitol.

The governor and legislative leaders will meet soon to finalize the special session agenda.

“DFL leaders already have acknowledged these B2B (business to business) taxes are a bad idea and have stated their willingness to include the repeal of the B2B sales tax on farm repairs in the special session,” Minnesota Chamber President David Olson said.

“That’s a good start, but it does not go far enough. The repeal should also occur for the thousands of other businesses negatively impacted by these new fixed costs. Companies are making next year’s business plans right now. They cannot make decisions based on a promise that some of the leaders will push for a repeal of these taxes in the 2014 Legislature.”

In May, the Legislature extended the sales tax to three B2B services: repairs of business equipment and machines; purchases of telecommunications equipment by telecommunications providers; warehouse and storage services.

The first two taxes went into effect July 1; the warehouse tax is scheduled to take effect April 1.

“We have already heard from many businesses that are contemplating whether it’s in their best interests to stay or expand in Minnesota,” Olson said. “We should repeal these taxes before they do more damage to the development and growth of our economy.”

Only the governor can call a special session, but once it begins he has no control over what is brought up.

That’s why Dayton is insisting that legislative leaders from both parties agree in writing to the special session agenda.

The special session originally was just to approve spending less than $5 million to help repay local governments for work they did dealing with June 20-26 storms and flooding.

Dayton favors eliminating the sales tax on farm equipment repair that costs farmers $2 million a month. He said the state has enough money to absorb that revenue loss.

But we believe the Legislature should also kill the $95 million-a-year tax on goods stored in warehouses. And repeal the telecommunications sales tax. These taxes hurt Minnesota’s business climate and may cause businesses to delay expansion plans or to consider moving to other states.