State Launches Initiatives to Encourage Small Business Growth

Press Release

The Minnesota Department of Employment and Economic Development (DEED) has launched three new initiatives that offer assistance to help small businesses in Minnesota expand or improve their operations.

Officials said the Greater Minnesota Job Expansion Program, Innovation Voucher Pilot Program and Job Training Incentive Pilot Program will encourage job growth, increase private investments and expand the tax base.

"We need to commit every effort to building on the momentum of Minnesota's strong and growing economy," said Governor Mark Dayton. "These new pilot programs will give small businesses the support they need to grow and continue creating new jobs in communities across Minnesota."

"Minnesota's economy is growing thanks to the many contributions of the state's small businesses," said DEED Commissioner Katie Clark Sieben. "These programs will help companies throughout Minnesota continue doing what they do best: creating jobs and driving innovation."

Following is a description of each program:

Greater Minnesota Job Expansion Program

Under this program, businesses in Greater Minnesota (outside the seven-county Twin Cities area) will receive sales tax refunds on all purchases made during a seven-year period.

To qualify for the refund, a participating business must have operated in Greater Minnesota for at least one year and must commit to expanding its workforce at a single facility. The business must increase full-time employment at the facility by two employees or 10 percent of current employment, whichever is greater, within three years.

DEED will determine the size of the sales tax refund that each business will receive (up to $2 million annually and $10 million over seven years), based in part on employment and capital investments. DEED will certify businesses to participate in the program and monitor them to ensure that they achieve hiring and wage commitments. The sales taxes will be refunded once DEED determines performance goals have been met.

Public utilities or businesses engaged in retail sales, lobbying, gambling, entertainment, professional sports, political consulting, leisure, hospitality or professional services are not eligible to participate.

Innovation Voucher Pilot Program

This pilot program provides up to $25,000 to help small businesses pay for technical assistance and services from public higher education institutions and nonprofit entities.

Qualifying companies will receive vouchers, which can be redeemed for technical assistance and services that include research, technical development, product development, commercialization, market development, technology exploration and improved business practices.

Companies with 40 or fewer employees, with at least half of the employees based in Minnesota, may apply. Recipients must provide a cash match equal to 50 percent of the voucher award.

DEED will provide funding for the face value of each voucher once a business receives technical assistance and services and documents a deliverable outcome.

Job Training Incentive Pilot Program

The program, an outgrowth of DEED's Minnesota Job Skills Partnership, provides grants of up to $50,000 to new or expanding Minnesota businesses that need to train new workers as quickly and efficiently as possible. The program is available to businesses that have fewer than 150 full-time employees and are increasing their Minnesota workforce by at least 10 percent, with a minimum of five new jobs.

Priority will be given to businesses in the manufacturing, skilled production and information technology industries and firms located in Greater Minnesota. Businesses may use a variety of training providers or use in-house trainers.

Workers can be trained in basic skills, advanced technical skills, specific industry equipment, processes, safety, worker-related language, soft skills and other areas identified by the employer.

Recipients must provide a cash match equal to 50 percent, 75 percent or 100 percent of the amount awarded by DEED, depending on the size of the business.

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