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Marco receives awards, expands, hires
It’s Bad for Business .
Pflepsen
McCann
McCann
Dan Pflepsen has been promoted to IT sales manager for the northwest region and Ann McCann was promoted to IT sales manager for the central Minnesota region. Greg Rolling received his certification as a Cisco Certified Network Associate (CCNA).
We need to repeal the new B2B sales taxes
T
he 2013 omnibus tax bill included three new business-to-business (B2B) sales taxes that are bad for business in Minnesota. They need to be repealed as soon as the 2014 legislative session opens. The new sales taxes are: Labor charges for repair and maintenance of business equipment. Effective July 1, 2013, this tax raises $152 million over the next two years. Telecommunications equipment purchases by telecommunications providers. Effective July 1, 2013, this tax raises $66 million over the next two years. Storage and warehousing services of business related goods. Effective April 1, 2014, this tax raises $95 million over the next two years. The new B2B taxes do not apply if the service is done by an employee or affiliated company. The taxes are
IN THE NEWS Fujan
Janssen
Executive Express hires Executive Express hired the following employees: Lisa Fujan, office administrator/ human relations coordinator and Carla Janssen, Minnesota assistant branch manager
By Teresa Bohnen
charged at the state rate of 6.875 percent plus any local sales tax. They will increase total taxes by $314 million during the next 2 years (biennium 2014-2015) and $449 million for biennium 2016-2017. These taxes undermine future economic growth and investment opportunities in Minnesota. Economists and tax policy experts generally oppose taxing retail sales on business inputs. The new taxes create economic distortions, make Minnesota less competitive with other states, and result in tax pyramiding (taxes on top of taxes). They also discourage investment in broadband and technology infrastructure, and may ultimately increase costs to consumers in a hidden manner.1 Additionally, small and midsized businesses are most likely to be harmed as they have less in-house capacity to perform these newly taxed services. These taxes increase costs and erode competitiveness for
many industries, adding costs that are not imposed in other states. These new fixed costs are in addition to higher federal and state income taxes, new health care taxes, energy costs, and additional regulations. The storage and warehousing industry employs an estimated 72,600 Minnesotans2 and is competitive and mobile, with typical cost margins of 3 to 5 percent. Minnesota businesses of this type will not be able to pass along or absorb increased fixed costs averaging 7.17 percent (6.875 percent plus local tax). These new B2B taxes will be passed along to consumers and employees in the form of higher prices and lower wages. The Minnesota Department of Revenue estimates the new tax ultimately will fall 64 percent on Minnesota consumers and 26 percent on Minnesota workers.3 They are ultimately bad for business. BC Teresa Bohnen is the president of the St. Cloud Area Chamber of Commerce.
GNP Company sells to Maschhoffs, LLC GNP Company, formerly known as Gold’n Plump Poultry, has signed a definitive agreement whereby The Maschhoffs will acquire GNP Company and its subsidiaries. GNP Company and The Maschhoffs’ pork production business will operate as separate business units following the closing of the transaction. The transaction will have no immediate impact on GNP Company’s chicken business or The Maschhoffs’ pork production business. GNP Company’s headquarters will remain in St. Cloud, and its nearly 1,700 team members and 350 family farm partners will be retained. GNP Company was featured on the cover of Business Central in September 2002.
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Business Central Magazine •• JANUARY/FEBRUARY 2014
Sources: 1What’s Wrong with Taxing Business Services? Council of State Taxation prepared by Ernst & Young, April 2013; 2US Dept of Transportation, 2010 data; 3Telecommunications 2004 Study by Council of State Taxation
Marco, Inc. received the 2013 LEAF Charitable Giving Award from the Local Education & Activities Foundation for St. Cloud School District 742. The company was also selected as a 2013 Elite Dealer by The Week in Imaging, an online information and news publication for resellers of office technology, supplies and services. Marco purchased InCompass IT, a hosted/cloud services business based in the Twin Cities. Marco hired the following employees: Jason Brown; Tyler Decker; Anya Dorn; Lee Erickson; Paula Evenson; Julie Ferche; Bryan Freed; Darcy Freihammer; Tara Gesy; Rory Hollander; Trent Isaacson; Wayne Lustoff II; Adam Muller; Shane Poe; Debra Reiter; Mary Schramel; Christopher Schuh; Mark Schuh; Nick Skajewski; Carl Sorenson; and Britt Vander Eyk.