In Minnesota, Tim Walz emerged victorious in tax battles.

• Some of Minnesota's business interests have a tense relationship with Gov. Tim Walz, who is Vice President Kamala Harris' running mate.
• Corporate leaders opposed higher taxes on the rich or businesses, which was a recurring theme in Walz's conflicts with business.
• Executives who met with Walz say they felt that Walz did not compromise.

Prior to being chosen as Vice President Kamala Harris' running mate, Tim Walz was focused on running for governor of Minnesota. In the weeks leading up to Election Day, Walz met with numerous business leaders at a lavish hotel situated near Gull Lake.

Eric Gibson, who was the president of Ultra Machining Company at the time, remembered querying Walz about whether he thought high corporate and state taxes negatively impacted workers.

"According to Gibson, Walz stated that they are not imposing taxes on individuals, but rather on businesses."

Geoff Baker, president of McFarland Truck Lines, confirmed Gibson's account, recalling it as a "bit of an 'oh s---' moment," he said to CNBC.

The Tax Foundation reports that Minnesota's current corporate income tax rate of 9.8% is the highest in the country.

Since the meeting on Gull Lake, Walz's approach to corporate and other business-related taxes has remained relatively unchanged. This is particularly true since Democrats gained a trifecta majority in 2022, with control of the state House, Senate, and governor's office.

Douglas Loon, president and CEO of the Minnesota Chamber of Commerce, stated that the trade association's relationship with Walz has been tense. The chamber, with over 6,000 members, includes Fortune 500 companies such as 3M and General Mills.

Nearly half a dozen individuals close to the disputes were interviewed by CNBC, and review of letters to the governor and state lobbying disclosure records was conducted.

Walz's policy battles frequently centered on increasing taxes for the wealthy or businesses, prompting corporate leaders to oppose him.

One of the disagreements was about the 1% surtax on passive investment income over $1 million, while Walz also signed legislation imposing a tax on GILTI.

The new tax law signed by Walz limits standard and itemized tax deductions for households with gross incomes over $220,000.

The governor and his fellow Democrats in power were rarely willing to compromise with business interests, despite Walz's willingness to meet with them.

The two-term governor gave the impression that he wasn't always interested in compromise during meetings with business groups and executives.

This week, investors and business owners will closely monitor Harris's first economic policy plans to determine if Walz's tax code approach is reflected in her potential administration's priorities.

Payroll tax tensions

The recent struggle between Walz and businesses in Minnesota centered on a proposed payroll tax to finance universal paid family and medical leave for residents.

The Tax Policy Center states that the bill signed into law by Walz in 2023, which takes effect in 2026, imposes a 0.7% payroll tax on employees' wages, with the employer and employee sharing the tax payment.

Supporters of the payroll tax believed it could bring in over $300 million to fund the paid family leave plan, while opponents cited a potential rise to 0.88% at the time, according to the Minnesota Reformer.

A fierce lobbying push against the bill featured meetings with the governor himself.

In 2020, eight representatives from the Minnesota Chamber of Commerce, including Loon, met with the governor at his capitol office in St. Paul, Minn. to oppose legislation that the governor was about to sign, according to Baker, who was present and whose company is a member of the pro-business lobbying group.

Baker expressed concern about the workplace benefit mandates and the potential payroll tax impact on businesses. He also urged Walz to consider implementing more tax reform laws to reduce the state's high corporate income tax rate.

Despite hearing them out, the governor still signed the bill and the state remains the highest taxed for corporate income.

The Uber compromise

The Harris campaign directed CNBC to Bill George, a Minnesota businessman and ex-CEO of Medtronic, for a different viewpoint on Walz and taxes.

George said Walz has been willing to compromise with business.

He remembered a recent bill in Minnesota that required a minimum wage, which passed the legislature but caused Uber and Lyft to threaten reducing their presence in the state.

In 2023, Walz vetoed the legislation but later signed a separate bill to raise rideshare drivers' pay.

George stated that Minnesota is an excellent location for conducting business, but he conceded that certain taxes are elevated.

He stated that although not everyone enjoys the tax system, he supports it as long as it benefits individuals.

In the 2022 elections, when Democrats gained control of the legislature, they accelerated their efforts to raise taxes on the wealthy, as admitted by George.

He stated that they aimed to acquire items for the benefit of others.

CNBC's study of the best places to conduct business ranked Minnesota sixth in the nation, according to the Harris team.

The Mayo Clinic in Rochester, Minn. is currently undergoing a $5 billion expansion, which was also emphasized by the private sector investments in Minnesota.

The Harris campaign stated that Walz has been a strong leader and implemented policies that have reduced taxes for working families.

Gov. Walz led Minnesota back with strong leadership, competent management, and smart policies – cutting taxes for working families and reaching the lowest state unemployment rate in recorded history, according to Harris campaign spokesman Charles Lutvak.

"Trump will face opposition from Team Harris-Walz's record and vision to promote business growth, job creation, and lower costs for the American people until November 5."