​This session legislators focused on building the FY24/25 budget and historic policy changes, including creating a $72B budget and the legalization of cannabis. 
 
Hospitality Minnesota had some great wins, including securing a $250,000 grant for ProStart/HTMP to Hospitality Minnesota Education Foundation and $350,000 + 25,000 in yearly maintenance for an online hospitality training program through the University of Minnesota Extension Tourism Center. 
 
Here are some other wins on our agenda: 

• Exempted food from the new delivery fee.  
• Federal tax conformity on pandemic relief. 
• Protection of the use of lodging tax for its intended purpose. 
• Increased funding for Explore Minnesota tourism (nearly doubled). 
• Driver's Licenses for All – regardless of immigration status.  
• No changes to post-Labor Day school starts.  

 
The session was not without its challenges to businesses, here are some policies and provisions that will impact business operations in Minnesota: 

• Paid Family Medical Leave (20 weeks of leave, 0.7% payroll tax, effective Jan 1, 2026). 
• Earned Sick and Safe Time (1 hour for every 30 hours worked, effective Jan 1, 2024). 
• Non-competes and no-poach/restrictive franchise agreements rendered unenforceable.  
• Captive audience ban.  
• Metro sales tax increase of 1% effective October (to fund housing and transportation). 
• Global intangible low-taxes income (GILTI) effective tax years 2023 and beyond. 
• Changes to game interactions for electronic pull tabs.  
• Increased costs to rideshare through minimum driver compensation to Uber/Lyft drivers. 
• Retail delivery fee of $0.50 on orders $100 effective July 1, 2024 (food exempt).  
• Carbon monoxide alarms are required in all sleeping units of hotels and lodging houses by August 1, 2024. 
• Municipal hotel licensing is now allowed after August 1, 2023.  

 
We’ll cover more as we continue to review the legislation from the end of the session, but these highlights paint a picture of what is most likely to impact our industry. 

​Hospitality Minnesota, the leading trade association representing the restaurants, hotels, resorts, and campgrounds in our state would like to express gratitude to the elected officials who modified the initial $0.75 delivery tax proposed during this session. We appreciate them listening to the members of the No Delivery Fee Coalition and our engaged Hospitality Minnesota membership to arrive at the final delivery tax proposal of $0.50 and for the exemption of food and third-party food deliveries.

Although we are grateful for the modification to the delivery fee language, Hospitality Minnesota stands united with our business partners and expresses our disappointment with the passage of this regressive delivery tax.

Despite a record surplus, repeated appeals, and raised concerns, lawmakers have chosen to impose a burdensome tax on the business community of Minnesota, which already faces complications with workforce shortages, supply chain issues, and rising costs. The business community of Minnesota, including the valued allies of restaurants, food service establishments, lodging, resorts, and campgrounds, requires sound solutions and good representation, not harmful and unnecessary taxation.

This tax places an unnecessary burden on both the businesses that rely on delivery and the Minnesotans who depend on these services for access to essential goods. This tax will disproportionately affect not only vulnerable seniors, those living with disabilities, and Minnesotans who live in areas of resource insecurity but also the businesses that regularly and proudly service them. This regressive tax will be challenging to implement, wildly unpopular, and harmful to businesses and consumers that have come to depend on delivery services.

Hospitality Minnesota remains committed to the interests of our industry and its allies. We will continue to advocate for the growth and prosperity of the hospitality industry. Our association will continue to inform our elected officials about the issues that matter most to our industry.

​The bill requiring carbon monoxide alarms in every sleeping unit of a hotel room or lodging house as of August 1, 2024 is included in this session’s Omnibus Judiciary and Public Safety bill. Yesterday evening, the Omnibus Judiciary and Public Safety passed the House, after passing the Senate on Friday evening. Next the bill will go on to be signed into law by the Governor.  
 
Hospitality Minnesota worked with legislators to ensure the implementation timeline was pushed from this upcoming August to next August, giving members ample time to plan, purchase and install carbon monoxide alarms by the August 1, 2024 deadline.  

​Meeting only twice, the Paid Family Medical Leave conference committee met quickly last Friday and Saturday to iron out the differences between the House and Senate bills. On Saturday afternoon, the committee adopted the conference report with the following key provisions: 

• 20 weeks of paid family or medical leave total. 
• 0.7% premium of employee wages will fund the program; half paid by the employee and half paid by the employer.  
• Seasonal employee exemption for hospitality employees under 150 days, with new formula constraints. Read amendment here. 
• Small business assistance grants for employer with 30 or fewer employees and less than $3M in annual revenue of up to $3,000 to hire temporary worker or increase wages when an employee is on leave for the program. 
• Program benefits and premium payments will begin January 1, 2026. 

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The Senate is expected to vote on the bill later, with it moving to the House and Governor’s desk later this week. 
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​Last Friday evening, the conference committee on Jobs, Economic Development and Labor reached an agreement on their omnibus bill, which includes $1.4 billion in spending. Most importantly, the bill includes two priority bills for Hospitality Minnesota, which are: 
 
·     $250,000 appropriation grant for ProStart and Hospitality Tourism Management program.
·     $350,000 to establish an online hospitality training program and $25,000 each year after for program maintenance.  
 
The bill includes many other provisions, most notably the Earned Sick and Safe Time provision. Employees will earn 1 hour of earned sick and safe time for every 30 hours worked, with a cap of 80 hours at any given time. This will go into effect January 1, 2024. 
 
Additionally, the bill includes various labor provisions that will impact some business operations such as no poach agreements, elimination of non-compete clauses, a captive audience ban and more. The bill is up in the Senate today for passage and will then move to the House and Governor’s desk.  

​To kick off National Travel and Tourism Week, Hospitality Minnesota and Minnesota Association of Convention and Visitors Bureaus partnered to host a legislative luncheon at the Capitol yesterday. Nearly 50 legislators and many of their staff attended, enjoying a picnic-style lunch while learning about the importance of the hospitality and tourism industry to Minnesota’s economy and quality of life.  
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The $0.75 retail delivery fee, which would impact all deliveries, is still on the table during the transportation conference committee negotiations. Last Friday, the No Delivery Tax coalition held a press conference at the Capitol. Hospitality Minnesota President & CEO, Angie Whitcomb led off the press conference with remarks and was joined by members Mari Harries (River City Eatery) and David Benowitz (Craft & Crew Hospitality). Others at the press conference included elected officials, faith leaders and business association leaders. 
 
The press conference resulted in coverage across all major news networks on Friday evening, including WCCO-TV, WCCO Online Extra, FOX9, KARE11, KSTP-TV, KWLM Radio-Willmar, and the Minnesota News Network. 
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​Yesterday the Senate took up their tax package – as a reminder, the House passed their version last week – which passed on partisan vote of 34-33. The Senate package includes provisions to give Minnesotan’s rebate checks, child tax credits, and social security tax cuts. Unlike the House, the Senate did not include a new fifth-tier tax bracket for top earners.
 
One thing to watch included in both tax packages is the worldwide combined reporting provisions. This would require multinational companies to report all income from subsidiaries located anywhere in the world into one combined tax report in Minnesota. Currently, no other state or nation has this reporting requirement, making Minnesota an outlier.
 
The Senate tax package also includes a 1% food and beverage tax in for the City of Wayzata.
 
Hospitality Minnesota will be monitoring both provisions and weigh in once the bill gets to conference committee – likely later this week.
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Paid Family Medical Leave (HF2) passed the House by a vote of 68-64 last night. Two Democrats – Representative Lislegard and Representative Pelowski -- voted against it. A long debate included introduction of numerous amendments. Few were accepted.
 
Progress from the initial bill came in the form of two eligibility amendments:

• the program will be capped at 18 week, rather than the 24 initially proposed
• the definition of family will mimic federal PFML program  

 
Hospitality Minnesota member Representative Dave Baker (R-Willmar) offered an amendment establishing a substitute plan that would not mandate employers to offer leave but allow for voluntary participation in a plan offering the same benefits that state employees currently have. That amendment was rejected.  
 
The bill now goes to the Senate, where it is eligible for a vote on the floor. It is anticipated the Senate will take up the bill soon, so they can go to conference committee to iron out their differences.  
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