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<br /> Will higher Minnesota MINNESOTA 'WISCONSIN Lang LaSalle (JLL) in lion of income would pay $347,876 in an-
<br /> Minneapolis. nual taxes.That's an increase of$107,490, or
<br /> taxes drive business Wisconsin. "If you're an S-corp., about 45 percent,from the current liability of
<br /> Gov. Dayton your whole business $240,386,according to JLL research.
<br /> to Wisconsin? says he's not • is kind of flowing into Sandy Barin, a senior associate at CBRE
<br /> fazed by the your personal income." Group Inc. in Bloomington who specializes
<br /> Relatively few critics and If the tax in the rural Upper Midwest industrial market,
<br /> that he's heard hike on high said he's often courted by government officials
<br /> companies have similar warnings earners and in Wisconsin, Iowa, North Dakota and South
<br /> of Minnesota losing its com- the pro- Dakota,and he sees it as healthy competition.
<br /> made the trip. petitive business edge for 30 ,, posed sur- "Hudson was built with companies that
<br /> years. He doesn't support the N charge pass, hopped across the border," he said. General
<br /> DFL-proposed surcharge, a state taxpayer Motors Co., for example, moved a 150-em-
<br /> BY SAM BLACK but hasn't said wheth- (individual or ployee distribution center in 2003 from Edina
<br /> STAFF WRITER er he'd veto it if the to Hudson, instead of a site it considered in
<br /> Joe Pertz lives in Stillwater, but moved his Legislature passes it. Shakopee. It received incentives of
<br /> company,Empire Bucket Inc.,across the river Bill Blazar, the more than$2 million to help with the
<br /> to Hudson,Wis.,to escape what he saw as too- chamber's senior move.Ford Motor Co.picked Hudson over
<br /> high taxes in Minnesota. vice president of Minnesota for its regional parts warehouse
<br /> That was in 1986,and Minnesota taxes havei the same year.
<br /> gone up since.With business groups anticipat- But Bann,who works with small and large
<br /> ing another jump under a proposed budget by companies,hasrit received a flood of calls
<br /> Gov.Mark Dayton,critics say that more small- from owners trying to get out of Minnesota.
<br /> business owners are poised to follow Pertz's public affairs and business develop- It's expensive to relocate, especially in
<br /> lead. ment,worries the tax increase would western Wisconsin,where there arerit many
<br /> But they've said that before.And so far,the make it harder to do his job of retain-
<br /> large empty buildings,Barin said. If a firm
<br /> anecdotes of companies leaving for Minnesota ing companies in the state and land- is looking for a 100,000-square-foot industrial
<br /> haven't turned into an exodus. ing expansions in Minnesota. t, S corp) who earned $5 mil building,it will probably have to spend money
<br /> Dayton's plan calls for a tax increase on own- Blazar said local chamber officials COVER STORY PAGE a
<br /> ers of S-corps who pay individual taxes on in- have contacted him about membersWY40
<br /> TAX EFFECT
<br /> from their businesses.The idea has been who indicate they may move if the tax
<br /> greeted with only slightly less scorn than his increases areassed.
<br /> px A breakdown of how Gov.Mark Dayton's tax hike,and a separate DFL surcharge proposal,could
<br /> scuttled business-services sales tax, at least `I think there are a lot of S-corp , :�w affect taxes for a sample S Corp company earning$5 million per year pre-tax.
<br /> among groups like the Minnesota Chamber of owners out there who are re-thinking
<br /> I MINNESOTA WISCONSIN
<br /> Commerce. their options,"Blazar said. Federal taxable income $5,000,000
<br /> .. c} $5,000,000
<br /> Democrats in the Minnesota House are also For some small-business own Federal tax liability $1,937,764 $1,937,764
<br /> considering a two-year surcharge on income ers, Minnesota's income tax fState tax liability $240,386 $237,323
<br /> taxes for those making more than$500,000,in- proposals are "very scary,"
<br /> cluding S-corps.That's on top of Dayton's plan, said Ann Marie Woessner = sa Taz due to proposed MN rate increase
<br /> and that could further enhance Minnesota's Collins, a national site se-
<br /> surcharge on income $107,490
<br /> ax disparities with its border rivals,especially lection expert with Jones Total state and federal tax imposed $2,285,639 $2,175,087
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