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Will MN Business Climate Deter Amazon?

Minnesota has its eye set on becoming home to Amazon’s second corporate headquarters and efforts to lure the online retail giant seem to be picking up steam, according to a recent Star Tribune article. But many cities across the country are competing to match Amazon’s wish list and can outshine the North Star State on certain criteria.

If Minnesota is serious about convincing Amazon to build here, the state needs to get serious about Amazon’s preference for a “stable and business-friendly environment and tax structure” because when it comes to taxes, Minnesota isn’t very nice.

The Center’s president John Hinderaker comments on that here:

No one has ever accused Minnesota or the cities of Minneapolis and St. Paul of being “business-friendly environments,” and certainly Minnesota does not have a “business-friendly tax structure.” And we have one of the higher costs of doing business in the U.S.

Minnesota ranks in the top five worst business tax climates in America, according to the Tax Foundation’s 2017 State Business Tax Climate Index. Its corporate tax rate is the third highest in the country. And taxes matter a great deal to businesses.

The evidence shows that states with the best tax systems will be the most competitive at attracting new businesses and most effective at generating economic and employment growth.

Lower taxes are more hospitable to businesses and generate more economic growth—something Minnesota’s mediocre economy needs. The state’s reluctance to create a better business climate with a friendlier tax system has caused it to lose its historic economic competitiveness.

Whether or not Amazon locates here, Minnesota needs to focus on reforming its business climate.

Amazon will announce its final site selection in 2018.

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