Businesses stung as Pawlenty delays refunds

By MARTIGA LOHN, Associated Press Writer

ST. PAUL, Minn. (AP) Just a few months ago, Gov. Tim Pawlenty argued that manufacturers should be exempt from paying sales tax on major equipment purchases.

Now, as part of his $2.7 billion budget fix, he's going to hang on to their cash longer.

Pawlenty's budget fix includes delaying $63 million worth of capital equipment sales tax refunds starting in January 2011. Businesses will wait up to three months for their money. A spokesman for the governor says the refunds will go out by July 2011.

The move disappoints some manufacturers who counted Pawlenty as an ally.

Mike Yeager of Yeager Machine Inc. in Norwood Young America says he wouldn't have expected Pawlenty to hold back refunds when he was pushing to turn them into a tax exemption.

(Copyright 2009 by The Associated Press.  All Rights Reserved.)