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The Minnesota Department of Revenue has extended a grace period for businesses that were ordered to scale back or close entirely to combat the spread of COVID-19. Bars, restaurants and other entertainment venues face restrictions into early May.

Sales tax payments originally due in March and April won’t have to be made until May 20. That extra time is granted without penalties or interest.

“We want to continue to find ways to help Minnesota taxpayers as much as possible during these uncertain times,” Revenue Commissioner Cynthia Bauerly said in a written statement.

The state tax agency is encouraging businesses to also explore other tax abatement programs if they are running short of money.

Still unchanged is the May 15 deadline for homeowners and commercial property owners to pay their first half of real estate taxes.

Senate Majority Leader Paul Gazelka told MPR News on Thursday that he’s asked agency officials and Gov. Tim Walz to consider waiving or delaying the state’s portion of commercial property taxes. One-third of property taxes paid by businesses go to the state.

“That would be an immediate benefit to struggling businesses that don’t have money right now but still have bills to pay,” Gazelka said.

Gazelka, R-East Gull Lake, said a waiver plan he favors would forgive up to $1 million of the first-half commercial tax owed to the state, which he said would deliver a lifeline to small businesses.

“At a very minimum, I hope they delay it,” he said.

Asked about it Thursday, Gov. Tim Walz said he’s open to the discussion.

“I hear businesses loud and clear on this and we need to make sure we’re helping them,” he said. But he said it would have to be weighed against the state’s ability to generate enough revenue to keep operating at a time it’s fighting the coronavirus pandemic.

House Speaker Melissa Hortman, DFL-Brooklyn Park, said several tax matters are under consideration and will be debated when the Legislature returns next week. She was noncommital.

“It’s a really complicated topic because the state of Minnesota cannot operate at a deficit and so we have to look at a number of issues that interrelate to each other as we make that decision,” Hortman said. “We have to make sure the state of Minnesota has the money to pay the bills.”

Business and Economic News

Brian Bakst

Author

Minnesota businesses affected by coronavirus restrictions will have more time to pay sales taxes. Further relief is under discussion.

Chairs are stacked on top of each other in an empty restaurant. 

Businesses shuttered by COVID-19 get sales tax extension

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