New Taxes Begin on Cigarettes, Online Purchases

Updated: 07/01/2013 5:53 PM By: Jennie Olson

Monday is tax hike day in Minnesota.

July 1 is when new taxes on things like online purchases and cigarettes begin.

The owner of a smoke shop in Oakdale tells KSTP this was the best Sunday business ever and Saturday was the best day of business in the store's history as people stocked up.

At midnight the owner had to take inventory of everything in the store and pay a tax on cigarettes already in the store. He says that's about $16 for each carton.

A neighborhood gas station in St. Paul told KSTP a pack of Marlboros will cost $7.83 Monday.

Also under the new law, online purchases will now be more expensive. You’ll now be paying a state sales tax of 6.875 percent for online purchases.

Retailers from Target to Creative Kidstuff pushed for the tax; those companies have complained for years about unfair competition.

The tax will show up when you pay at the online checkout.

As part of the $2.1 billion revenue bill, Minnesota’s wealthiest residents will also now be taxed at a higher rate of 9.85 percent. That includes singles making more than $150,00 and couples making more than $250,000.

On the reverse side of the revenue bill, $400 million will be given in middle-class property tax relief.

The revenue bill will fund all-day kindergarten and freeze college tuition for two years.