2022 Business Benchmarks Report: Taxes
Taxes in Minnesota
Jason Janisch, Vice President, Jasper Engineering and Equipment Co.
If you ask business leaders in Minnesota, high taxes are a perennial challenge to growth. In a recent statewide survey of leaders from throughout the state, most said that they will try to grow here, but the number of those who will look to grow elsewhere or move has gone up year-over-year and now stands at nearly 40%.
This makes it especially important to keep businesses like Jasper Engineering and Equipment Co. in Minnesota. Jasper has a strong employee presence and customers across 10 states, but strong roots in Minnesota. “I’m an iron range guy,” says Jason Janisch, Vice President at Jasper. Jasper has engineered instrumentation, process equipment and controls since 1958, to industries such as mining, oil and gas, grain and biofuels, pharmaceutical and medical technology, power and municipal water treatment, food and dairy, and chemical and oilseed processing.
Like many other businesses, their customers were hit differently throughout the COVID-19 pandemic, causing them to shift their operations to meet changing needs. When the taconite mines shut down in northern Minnesota, Jasper shifted to weather the storm. Among other things, they started selling inferred temperature displays and monitors that businesses could use to improve employee and customer safety and continue the fight against COVID-19.
And a federal Paycheck Protection Program (PPP) loan helped them keep staff employed as the company – and economy – began to recover. “PPP really allowed us to keep everybody working,” says Janisch. “We were able to reinvest their time into projects in our shop and warehouse and take advantage of that time to improve operations.”
The Minnesota Chamber led the statewide effort to offer tax relief on these forgivable loans in the 2021 Legislative Session, which resulted in $409 million in relief for nearly 190,000 Minnesota businesses that accepted these loans.
Despite the challenges of a pandemic economy over the last year and a half, Jasper has nearly completely recovered to pre-COVID levels of production. But other challenges remain. Taxes, high energy costs and inflation don’t just impact a business’s bottom line, but create a ripple effect of other challenges too. Finding workers in greater Minnesota and supply chain dynamics hinder growth.
But Jasper hopes to meet these challenges head-on. Janisch looks toward reshoring opportunities as well as the resurgence of manufacturing and upward momentum of the industrial sector in the upper Midwest as good signs for their future. “We are well positioned to help our customers reach their goals,” he says. “That’s pretty exciting for us.”
Taxes in Minnesota: Incremental progress, barriers remain
In 2021, the Legislature took meaningful steps toward tax relief for businesses by conforming to the federal tax treatment for Paycheck Protection Program (PPP) loans, as well as continuing progress on business property tax relief. But Minnesota remains a top-taxed state in many categories, and the Minnesota Chamber successfully defeated over $1 billion in new, permanent tax increases proposed last session. In a recent survey of business leaders, nearly half of respondents said that reducing taxes was the most important issue that lawmakers could tackle. In the same survey, high taxes were cited as the biggest barrier to business.