Will businesses wait until state acts?
One of the poorer pieces of legislation passed in the 2013 Legislative session is the new sales tax on warehousing and storage services. Since the bill was signed by Gov. Dayton, Minnesota-based businesses have complained about the tax, which is scheduled to take effect in April 2014.
Warehouse owners and businesses that use warehouses have warned of the economic disadvantage the tax would place upon them. Many are already exploring the option of moving their operations and jobs to other states.
Republicans and many DFL legislators agree that this was a bad decision, which should probably be repealed. Republicans are calling upon the governor to call a special session of the legislature to repeal it now. The governor and the DFL legislative leaders, however, are more inclined to wait until next year’s legislative session. After all, the tax doesn’t take effect until next April, and waiting for the session should give them plenty of time.
Republican legislative leaders delivered a letter to the governor this week calling for a special session. The letter points out that Red Wing Shoes, a major Minnesota manufacturer and employer, is delaying investment in a $20 million distribution center in Red Wing until it knows what the status of the tax will be.
Businesses don’t always have the luxury of time in making their decisions. They can’t afford to wait. Some have projects in the works now, some would rather act sooner than later, when construction costs will be higher. The people who are waiting for the jobs these projects will produce would rather the state acted now instead of in six months.
The state should act as soon as possible to repeal this job-killing tax.