Minnesota Sales Tax Reform: Not Dead Yet
- Apr 12, 2013 | Gail Cole
When Governor Mark Dayton (D) announced he was abandoning his proposal to expand the state sales tax to many services, many people thought Minnesota sales tax reform was dead. It isn’t. It’s more like the man being carted off for burial in the “Bring out your dead” scene of Monty Python’s The Holy Grail. “I’m not dead!” shouts the man. “A tax overhaul is not dead,” say Democratic-Farmer-Labor senators.
Senator Ann Rest (DFL-New Hope) is the force behind the new proposal, which she presented to the Senate Tax Reform Division yesterday. Her plan strives to “modernize the sales tax system” by expanding the state sales tax to many services, including, but not limited to:
- Personal services (haircuts, spa services, tattoos);
- Instruction (athletics, dance, fitness, sports);
- Elective cosmetic procedures (Botox);
- Repair labor for many items; and
- A variety of personal services such as event planning and moving services.
Not all services would be subject to sales tax. Exemptions would be provided the services that include but are not limited to:
- Agriculture and forestry support;
- Education services;
- Health care and medical services (except where specified);
- Public services;
- Veterinary services; and
- Business support services.
The general sales tax rate would also be reduced under the proposed plan, from 6.875% to 5.677%.
The tax plan treats tobacco products, digital goods, income tax and much more. If certain lawmakers have their way, the tax overhaul will take effect “for sales and purchases made after June 30, 2013.”
They’ll have to convince the governor, whose spokesman said yesterday, “The governor doesn’t have any interest in it.”
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