Dayton Makes Concessions on Taxes

Posted at: 03/14/2013 7:04 PM
By: Jenna Lohse

(ABC 6 NEWS) -- Thursday Minnesota Governor Mark Dayton updated his budget proposal. He hopes to increase spending on education by hundreds of millions of dollars. And to pay for it, he's proposing a tax increase on the wealthiest Minnesotans.

But it may be what's missing from that proposal, that's getting the most buzz.

What's missing, is a handful of new taxes, that would impact businesses and consumers. Things like haircuts and clothes.

Jessica Amos is the owner of Hair Studio 52 and Day Spa.

"We try to stay affordable in the community to help our community out," said Amos.

Which is why the thought of taxing haircuts didn't go over so well.

"Tax on our prices and our services takes away at least our next turn of price increases," said Amos.

But Thursdays news of a new budget proposal that would keep the salon tax free is welcomed to customers.

"It makes me feel very happy. I probably wouldn't come in as frequently if that were the case," said Jodi Burns, customer of Hair Studio 52 and Day Spa.

A revised budget proposal was also good news for Svarr Vinje, who owns Knights Chamber Clothiers in Rochester.

"I was extremely excited, I just couldn't believe it," said Vinje.

Most of Svarr's customers come from outside of Minnesota and shop here to take advantage of no sales tax on clothing.

"In my experience, costumers that are not from Minnesota purchase about 10 to 15 percent extra because there is no sales tax," said Vinje.

So the idea of adding tax to items over $100 was a problem.

"We would have to look at either lowering our items to be excluded from the sales tax or ship products to customers," said Vinje.

Some business owners can now rest easy knowing sales tax increases will no longer effect their services.

"It's very nice that the government is not going to take our next step in our price increases and our raises," said Amos.