Minnesota’s Economic News — W/E 1/28/22
State and local taxes and spending Minn Post: A new Minnesota law is saving certain kinds of businesses a boatload in federal income taxes Star Tribune: Minnesota lawmakers face $7.7B…
UPDATE (2/3/18): Minnesota companies big and small continue to pass along the financial benefits of the federal tax cuts. Best Buy just announced the biggest across the board federal tax cut bonus for employees by a Minnesota company yet, certainly one of the biggest in the country. More than 100,000 Best Buy employees will receive a boost, a $1,000 bonus check for full-time staff and $500 for part-timers.
The news made local headlines in the Star Tribune and other local media that’ have largely overlooked the growing list of Minnesota firms and employees that have already benefited from tax reform.
In addition, the Richfield-based retailer is making a one-time contribution of $20 million to the Best Buy Foundation to help further expand its teen tech centers and Geek Squad academies across the United States. A portion also will be used to create a nationwide employee volunteer program aimed at teenagers and technology.
“Our goal was simple: to say ‘thank you’ to more than 100,000 of our employees and help accelerate our work to bring much needed technology training to 1 million underserved teens a year,” said Jeff Shelman, a Best Buy spokesman.
The Albert Lea Tribune points out that smaller Minnesota companies have also jumped on the tax reform bandwagon.
Albert Lea Public Warehouse Owner Al Larson gave each of his 12 employees a $2,000 bonus, which he said would not have been possible without reduced rates. He said he decided to pay the bonuses in January to help the workers pay off costs incurred during the Christmas season.
“I just distributed it back to them,” he said.
In addition to bonuses, Larson is installing two roofs and investing in new dock levelers.
Larson said he prefers investing company revenue locally instead of contributing more of a percentage to the federal government.
UPDATE (1/25/18): The list of Minnesota companies sharing the financial benefits of the Tax Cuts and Jobs Act with their employees and communities just got longer with the addition of four more firms, big and small. St. Paul-based Ecolab will cut a $25 million check to its charitable foundation, while also predicting strong growth in 2018 and beyond.
In response to the passage of the new U.S. tax law, Ecolab announced its intent to make a $25 million contribution to the Ecolab Foundation. Since 1986, the Ecolab Foundation has contributed more than $100 million to communities in which we do business by providing basic needs, including hunger relief and affordable housing; supporting education, the arts and environmental conservation; as well as providing support to global relief organizations during times of natural disasters.
Bio-Tchne Corporation, a biotech and diagnostic firm headquartered in Minneapolis, distributed $500 bonuses for all 1,650 employees in January paychecks. CEO Chuck Kummeth also made it clear the lower rates will make it possible to expand the company and create more jobs.
How does this affect our company? A lot. Our current corporate income tax levels average between 29% and 31%. With this new tax law, over the next year our tax rates will drop to levels potentially as low as 21%. We don’t know the total answer yet because the law is complicated, and includes tax calculations from other countries where we do business as well. What I can tell you is that we are likely to pay substantially less taxes in the U.S. and overall.
Circuit Interruption Technology of Rogers tacked an extra week of pay onto employees year-end paychecks and plans to ramp up hiring this month, according to Rick Hampton, Vice President of Sales.
Due to the positive atmosphere created by the passage of the tax biercent:ll Company profit sharing combined with normal 401K contributions amounted to an additional 5% per employee for 2017. CIT has added 10% to our staff thus far in January 2018 and more additions are expected.
Meanwhile, high tech Data Sales Company announced this week that all 80 employees would receive a $1,000 bonus, thanks to tax reform.
“Our hard-working employees make this company succeed, and we wanted them to share in the savings the company will see and also help grow our economy. Today I’m announcing that every employee will receive a cash bonus of $1,000 each,” said Paul Breckner, President of Data Sales Co. “I also want to thank our local Congressman, Jason Lewis, for his consistent advocacy of tax reform and seeing it through to becoming law. With the majority of our 80+ strong workforce here in Burnsville, I’m pleased that the benefits of tax reform will be felt at home.”
So far, more than 250 companies have announced tax cut bonuses for more than three million employees, according to the Americans for Tax Reform website.
UPDATE (1/17/18): Two more Minnesota companies have made the Americans for Tax Reform list of companies handing out bonuses to their employees as a result of the federal tax cut. DTN, a Burnsville firm, and St. Paul-based Priority Courier Experts are among 164 companies with two million employees and counting that have already benefited from the tax relief measure, according to ATR.
DTN, an independent provider of information and actionable insights in the areas of agriculture, transportation and energy, and publisher of The Progressive Farmer, gave $1,000 bonuses to nearly 700 employees.
Priority Courier Experts paid a “TRUMP BUMP” [$500] to each of its 80 employees on their January 2nd, 2018 paycheck. We also expanded the “TRUMP BUMP” to pay each employee a $500 bonus on their hire anniversary date in 2018, and our hope for the future is to make the “TRUMP BUMP” Bonus permanent. – Steve Cossack, Founder/CEO, Priority Courier Experts
Big bonuses and pay hikes for hundreds of thousands of employees at dozens of companies as a result of the new tax cuts sparked considerable attention in the national media. At the same time there’s been almost no such coverage by the Twin Cities media, particularly in comparison to the press’ relentless PR for big labor’s $15 minimum wage campaign and the politicians behind it in recent months.
But there’s also immediate gratification for thousands of Minnesota employees flowing out of the biggest tax reform in a generation. Nearly 60,000 employees of Minneapolis-based US Bancorp get a $1,000 bonus. The bank’s minimum wage increases to $15 for all hourly employees. Health care benefits will also be improved. On top of that, the fifth-largest bank will infuse an additional $150 million into the U.S. Bank Foundation, which supports communities across 25 states, including Minnesota.
“We believe that tax reform is positive for the U.S. economy because it provides an immediate opportunity to benefit our employees, our communities and our customers,” said Andy Cecere, President and Chief Executive Officer, U.S. Bancorp. “We are proud of our people and their commitment to our customers and communities. We felt it was important to reward their hard work and dedication with this special bonus, the minimum wage increase and the health care enhancements.”
Employees and members of the communities served by Wayzata-based TCF banks will also see big-time benefits as a result of tax reform. Most employees will get a $1,000 bonus off the top, according to a press release.
As a result of the Tax Cuts and Jobs Act, TCF will provide approximately $5 million in one-time bonuses to eligible team members—$1,000 to full-time team members and $500 to part-time team members—who earned less than $100,000 in total compensation during 2017, totaling 80 percent of its workforce. Additionally, TCF will donate $5 million to TCF Foundation to increase grants to nonprofit organizations in the communities it serves, including increasing its match of team member contributions to nonprofit organizations from 100 percent to 200 percent in 2018.
Nationally at least one million Americans have received bonuses and pay raises due to the Tax Cuts and Jobs Act. You can see a complete list of companies at the Americans for Tax Reform website.