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Sales Tax Proposal Not Sitting Well with Some Retailers

Posted at: 01/23/2013 6:36 PM
Updated at: 01/23/2013 6:51 PM
By: Jenna Lohse

(ABC 6 NEWS) -- While Governor Dayton's plan to balance the budget includes lowering taxes in some areas, it means new taxes in others. This includes adding a tax to high end clothing.

The idea of adding a tax to purchases of over a hundred dollars isn't easy to swallow for some.

Retail stores like Knight's Chamber in Rochester, where most items are priced at over a hundred dollars, are concerned about what a new sales tax would do to business.

"Many of our Mayo transient customers purchase clothing here specifically because there's no tax. I think there would be a direct reflection in our sales if there was an additional tax on the clothing on how much people would spend or would consider spending," said Svaar Vinje, Owner of Knights Chamber.

The owner of Knight's Chamber says about 70 percent of his customers come from outside of Minnesota. No sales tax on clothing is a big reason why out-of-staters spend their money here in Minnesota.

“I definitely think business would be affected. Many of our customers spend additional amounts because we let them know there’s no tax on clothing,” said Vinje.