NoDak House Republicans Reject Small Business Sales Tax Relief

Small main street businesses have felt the most adverse economic effects of the pandemic. Some state programs have been designed to help weather the storm, but there is no denying more can be done at a state level. Even with certain state relief, the Fargo metro area alone lost twenty businesses. We should want to give these “mom and pop shops” every tool possible to fight for their dream’s survival. Unfortunately, this week without much debate, NoDak House Republicans rejected proposed relief.

North Dakota has 24,649 businesses. Approximately 73% of our businesses have fewer than 16 employees. House Bill 1414 introduced by Rep. Pam Anderson (D – Fargo) would have allowed our smallest businesses with fifteen or fewer employees with cash flow this year by collecting the 5% sales tax on the first $100,000 of sales, but not remitting it to the state.

The new idea for relief was rejected in the House without much debate. So much for all that “pro-business” and “looking out for the little guy” talk. But the little reasoning provided for rejecting this bill seems rather weak. First, was the passing comment from the bill carrier Rep. Ben Koppelman (R – West Fargo) about the price tag. Koppelman said the proposal would impact sales tax revenues between $15 and $20 million. It is important to note, the $15 to $20 million would be kept by those businesses in need of relief. Additionally, that amount is half of what Ben Koppelman wants from taxpayers to expand the Legislative wing at the Capitol with new offices and committee rooms.

The other argument used to reject state-provided small business relief was a “gifting clause.” Providing this targeted tax relief would be a “gift” to small businesses Koppelman stated. It turns out, like many things, there is a way to get it done without violating any such clause. It would have taken just a little bit of work from lawmakers.

Let’s take the “gifting” argument for a walk. Was it “gifting” when the state gave tens of millions of dollars from the CARES Act to the oil industry? These legislators didn’t raise a concern then. Hell, they didn’t even show up to do their job and provide this money themselves. Or, is this just an excuse to defeat the bill aimed at small businesses?

Here are the lawmakers who rejected the small business relief in HB 1414:

NAYS: Anderson, B.; Anderson, D.; Becker; Bellew; Beltz; Bosch; Brandenburg; Christensen; Damschen; Delzer; Devlin; Dockter; Ertelt; Fegley; Fisher; Hagert; Hatlestad; Headland; Heinert; Howe; Johnson, D.; Jones; Karls; Kasper; Keiser; Kempenich; Kiefert; Klemin; Koppelman, B.; Kreidt; Lefor; Longmuir; Louser; Magrum; Marschall; Martinson; Meier; Monson; Nathe; Nehring; Nelson, J.; Ostlie; Owens; Paulson; Paur; Pollert; Porter; Pyle; Richter; Roers Jones; Rohr; Ruby, D.; Ruby, M.; Sanford; Schatz; Schmidt; Schobinger; Schreiber-Beck; Simons; Skroch; Steiner; Stemen; Thomas; Toman; Trottier; Tveit; Vetter; Vigesaa; Weisz; Westlind; Zubke; Speaker Koppelman, K.

It wasn’t just lawmakers. Lobbyists tasked with advocating for businesses in North Dakota were missing. If I’m a dues-paying member of one of these associations and fit the category of a micro-business, I’m calling their office to ask what the hell they’re doing in Bismarck. Perhaps they shouldn’t be solely focused on the big box stores or big-monied interests. Small business owners who make up 76% of business in ND deserve at least the same attention.

So what was it because I don’t buy the “gifting” clause excuse. Was it because the bill was sponsored by a Democratic lawmaker? The partisan rejection of ideas in Bismarck isn’t new and happens all too often. Was the relief a “drop in the bucket” as one business individual suggested? Simple fix there. Increase the allowance for these micro-businesses. But that would have been work. Or was it that certain lawmakers want to clear the calendar of proposals that would impact the budget to spend more money on their self-interests like a new office space?