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Column: House advances warehousing tax repeal, Senate does not

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The Minnesota Legislature is back in action, and on the first day of session lawmakers hit the ground running.

Our first order of business in the Minnesota House was to approve a bill that helps our poorest residents who are struggling to heat their homes this winter. The legislation appropriated $20 million to the Low Income Home Energy Assistance Program and it was passed unanimously.

Minnesota’s bitter winter conditions, combined with a propane gas supply shortage across the state, have caused tens of thousands of Minnesotan’s to seek energy assistance from LIHEAP. Without additional funds the program would have been out of money by March 1.

As “Opening Day” continued, my bill that focuses on repealing last year’s warehousing and storage sales tax law was heard in the House Taxes Committee. This is the same bill I proposed for debate during our special session in September that our legislative leadership chose not to hear.

Beginning April 1, the new law will impose a 6.875 percent tax on general product warehousing and storage at bulk shipping terminals, such as railroads and commercial docks. It impacts border communities as businesses can alter their behavior by utilizing storage and repair services in neighboring states.

My legislation authorizes a full repeal of this unneeded tax increase.

An interesting political side note to this discussion because some constituents have asked: although I’ve been working on this plan for months, I was not allowed to be the official chief author because I’m a member of the minority party. Certainly, the most important issue is that we achieve the goal of eliminating the tax altogether. However, it gives you an idea of the games that are often played in majority/minority party relations. This is exactly why the general public gets so frustrated. If we all thought it was a good idea to repeal this tax, we should have done it back in the special session when we initially proposed it.

A repeal of the warehousing and storage tax would be the best thing for our district and Minnesota. Though it has not yet taken effect, the threat of implementation on April 1 has put business, jobs and potential revenue to the state on hold. The Minnesota House took the first step toward its elimination by approving tax repeal legislation on March 6, and I am very thankful that we took quick action.

The problem is the Minnesota Senate appears to be in no hurry to follow suit. The Senate majority leader has already stated that he doesn’t see the need to rush things, so who knows how long it could take to reach our desired resolution on this issue – if at all.

If you agree that the warehousing and storage sales tax law needs to disappear, I strongly encourage you to contact members of the Minnesota Senate and share your concerns. It’s time for the Legislature to correct this mistake and show Minnesota’s business owners we value their contributions as job creators.

Tim Kelly, R-Red Wing, can be reached at 651-380-4345 or rep.tim.kelly@house.mn.

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