Minnesota Repeals The Warehouse Tax

Minnesota Governor Mark Dayton signed a $616 million tax relief bill into law late in March that repeals the controversial business tax that many called the "warehouse tax," a tax that would have charged a 6.5-percent services tax on warehouses. The warehousing services tax, originally slated to take effect April 1, 2014, would have assessed a sales tax on all aspects of public warehousing.

When the tax was proposed last year the International Warehouse Logistics Association (IWLA) commissioned KPMG to examine U.S. warehouse taxes at the state level. The study revealed only five states with a service/sales tax on the warehouse-based distribution industry, four of which taxed all business-to-business services and one only targeted warehousing services, but excluded goods in interstate commerce.

The study concluded that the service tax on Minnesota warehouses was unique and detrimental to the state's business climate and thus harmful to the state's overall tax revenue.

"It was determined that ," said IWLA President & CEO Steve DeHaan. "It was the right decision to support businesses that bring jobs and pump revenue back into the economy. We will not be a target for legislatures who attempt to burden our industry with unjust taxes."

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