Senate Plan Would Expand Minn. Sales Tax, Cut Rate

Posted at: 04/11/2013 10:56 AM

ST. PAUL, Minn. (AP) - The debate over the size and reach of Minnesota's sales tax is back on at the state Capitol.

A wide-ranging tax proposal that Senate Democrats released Thursday would make certain consumer services subject to the state sales tax while lowering the rate that gets charged on all purchases. Unlike a controversial plan from Gov. Mark Dayton that he later gave up on, the Senate plan steers clear of taxing business-to-business services.
Among the consumer services that would be taxed are: haircuts, spa treatments, tattoos, sports lessons, elective cosmetic surgery and wedding planning.
Minnesota's clothing tax exemption also would go away, but a new credit could be claimed on income taxes.
In exchange for the broader base, the state tax rate would fall from 6.875 percent to 6 percent starting this summer.
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(Image from MGN Online)