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Minn. Gov. To Float COVID-19 Tax Relief In Special Session

By Asha Glover · November 24, 2020, 7:30 PM EST

Minnesota's governor on Tuesday proposed tax credits for food donations as part of a package of novel coronavirus relief options, but said a proposal to forgive sales tax for businesses could present challenges.

Democratic Gov. Tim Walz told reporters that lawmakers were considering a number of provisions, including a tax credit for businesses that donate food that would otherwise spoil or be discarded. Walz said he planned to call the state's seventh special session of the year once lawmakers had put together a final package.

Sessions have been called throughout the pandemic as a result of Walz's extended peacetime emergency order amid the virus. While an emergency is in place, a special session must be called by the governor every month.

Walz said some provisions might face bigger hurdles than others, using as an example a temporary sales tax exemption for restaurants and bars that he floated at a news conference Monday.

"We were talking [about] the sales tax proposal, and the problem with that is that thing probably gets into court because it's not the business that pays the sales tax, it's the individuals, and then you have the issue of who's paying and how's it passing through," Walz said.

Ultimately, Walz said, lawmakers will likely narrow down a larger pool of proposals to a final package.

"Put out all the proposals and let's vet them down to find out what are the ones that are most effective to these folks [and] to these families and have the quickest impact," he said.

The governor said he didn't know how much the package might cost and how it might be paid for. Walz said that the state Legislature could convene its next special session as early as next week if lawmakers can strike a deal on the package.

"If we can get a deal here, then we're probably talking next week," he said.

Minnesota House Republicans offered their own set of proposals Tuesday, including a three-month sales tax holiday that would begin immediately for businesses that are open but curtailed. The sales tax holiday would also be available for businesses that are closed due to the pandemic once they have reopened, Rep. Kristin Robbins, R-Maple Grove, said during a livestreamed meeting before the governor's announcement.

"This will allow bars, restaurants and other businesses to keep the sales tax they've been collecting, which will be a huge help to their cash flow and it will help the ones that are closed once they reopen," Robbins said. "Most of the businesses I've talked to say this is the most efficient and effective way to help with cash flow and help immediately."

Republicans also proposed providing grant assistance to businesses that have seen revenue decrease by 35% or more, in part due to the state's recent executive orders that limit social gatherings.

Rep. Barb Haley, R-Red Wing, said that Republicans would take $400 million from the state's reserve funds to pay for the proposal and that money would be backfilled by any federal funding package passed in the future.

"If there ever was a rainy day, this is it," she said.

Walz told reporters that he believed the relief package would be supported by both sides of the aisle. He said that while he had not yet looked at their proposals, he wants to work with Republicans on a final proposal.

"They're putting out their ideas — good ideas will come from both sides of the aisle," Walz said.

--Editing by Neil Cohen.

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