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Sales tax exemptions
The most significant change in the governor’s budget in terms of generating new revenue is in the area of sales taxes. The governor broadens the sales tax base by eliminating many current exemptions, including the following.

Selected consumer goods and services, including clothing items over $100, over-the-counter drugs, digital goods, repair services (including auto repair), personal care and instruction services, and legal and accounting services.

Selected business services, including legal, accounting, computer, advertising, architecture, employment, specialized design, management consulting, and business support services.

Goods sold over the Internet through Minnesota-based affiliates. (This change, referred to as “affiliate nexus,” eliminates a competitive disadvantage between main-street businesses — which must charge a tax on their sales — and on-line retailers with a Minnesota presence — which frequently do not collect taxes on similar sales.)

Certain types of digital video recorder and programming services sold by a direct satellite service provider and charges for the use of pre-written software if the customer does not have title to or control of the software.*

Selected other items, including telecommunications equipment, advertising materials and publications, and court reporter documents.

While taxpayers will start paying a tax on a variety of goods and services that were previously exempt, the sales tax rate itself will fall from 6.875 percent to 5.5 percent,† thereby reducing Minnesota’s sales tax rank from 7th highest in the nation to 27th. As a result of this rate reduction, the tax on goods that are already taxable under current law — items ranging from school supplies and shampoo to hockey sticks and hula hoops — will fall by 20 percent.

Gil Dobie wrote:Governor Dayton is proposing lowering the rate, but taxing everything that was previously exempt. I'm a little leary that this will be one more reason for people to not come to Minnesota. I am a little leary on the affect of the draw of people that come to Minnesota to shop for clothing, and specifically the Mall of America tourism. I know some Wisconsin, ND, SD and Iowa people will shop for clothing in Minnesota because it's tax-free. Will they continue to shop Minnesota to stay at home now. Maybe TTBF can sway my feelings on this.

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Sales tax exemptions
The most significant change in the governor’s budget in terms of generating new revenue is in the area of sales taxes. The governor broadens the sales tax base by eliminating many current exemptions, including the following.

Selected consumer goods and services, including clothing items over $100, over-the-counter drugs, digital goods, repair services (including auto repair), personal care and instruction services, and legal and accounting services.

Selected business services, including legal, accounting, computer, advertising, architecture, employment, specialized design, management consulting, and business support services.

Goods sold over the Internet through Minnesota-based affiliates. (This change, referred to as “affiliate nexus,” eliminates a competitive disadvantage between main-street businesses — which must charge a tax on their sales — and on-line retailers with a Minnesota presence — which frequently do not collect taxes on similar sales.)

Certain types of digital video recorder and programming services sold by a direct satellite service provider and charges for the use of pre-written software if the customer does not have title to or control of the software.*

Selected other items, including telecommunications equipment, advertising materials and publications, and court reporter documents.

While taxpayers will start paying a tax on a variety of goods and services that were previously exempt, the sales tax rate itself will fall from 6.875 percent to 5.5 percent,† thereby reducing Minnesota’s sales tax rank from 7th highest in the nation to 27th. As a result of this rate reduction, the tax on goods that are already taxable under current law — items ranging from school supplies and shampoo to hockey sticks and hula hoops — will fall by 20 percent.

Selected consumer goods and services, including clothing items over $100, over-the-counter drugs, digital goods, repair services (including auto repair), personal care and instruction services, and legal and accounting services.

TwinTownBisonFan wrote:In all, I like his overall proposal, I think it puts a serious fix to a decade long problem in MN... and if nothing else, it's a SOLUTION that is palatable.

AZGrizFan wrote:

TwinTownBisonFan wrote:In all, I like his overall proposal, I think it puts a serious fix to a decade long problem in MN... and if nothing else, it's a SOLUTION that is palatable.

Or, they could just stop spending so much money.

Baldy wrote:

Selected consumer goods and services, including clothing items over $100, over-the-counter drugs, digital goods, repair services (including auto repair), personal care and instruction services, and legal and accounting services.

Exemptions for clothing? Charging sales taxes on services? OTC drugs? Interesting...Minnesota's tax structure is very very strange.

TwinTownBisonFan wrote:

AZGrizFan wrote:
Or, they could just stop spending so much money.

That argument has been settled here.

Minnesota has one of the highest standards of living in America. The "starve the beast" GOPers have lost. Minnesotans have, in the past decade voted to raise their own taxes multiple times to maintain that standard of living. Gov. Pawlenty was the problem for nearly a decade. Now that he's gone, we're getting down to business.

TwinTownBisonFan wrote:

Baldy wrote:

Exemptions for clothing? Charging sales taxes on services? OTC drugs? Interesting...Minnesota's tax structure is very very strange.

It's designed to be as progressive as a sales tax can be. Exempting the things that those lower on the income scale are disproportionately effected by. It's very effective - and WIDELY supported.

AZGrizFan wrote:

TwinTownBisonFan wrote:
That argument has been settled here.

Minnesota has one of the highest standards of living in America. The "starve the beast" GOPers have lost. Minnesotans have, in the past decade voted to raise their own taxes multiple times to maintain that standard of living. Gov. Pawlenty was the problem for nearly a decade. Now that he's gone, we're getting down to business.

Good for you. Glad I don't live in Minnesota---for a number of reasons.

TwinTownBisonFan wrote:

AZGrizFan wrote:
Or, they could just stop spending so much money.

That argument has been settled here.

Minnesota has one of the highest standards of living in America. The "starve the beast" GOPers have lost. Minnesotans have, in the past decade voted to raise their own taxes multiple times to maintain that standard of living. Gov. Pawlenty was the problem for nearly a decade. Now that he's gone, we're getting down to business.

clenz wrote:I grew up in NW Iowa, pretty much right on the MN boarder, and my family (and pretty much every family) went to Minnesota (be it Luverne, Worthington, Adrian) to buy clothes/school supplies every fall. The driving distance between Sioux Falls, SD and those cities was about the same so the savings were nice (although Sioux Falls is eleventy billion times better than those cities in every single way on their best day and Sioux Falls's worst). However, that has changed in the last decade or so. Sioux Falls is drawing almost everyone from NW Iowa (mostly because the previously mentioned cities are shitty and have only gotten shittier...especially Worthington). If the clothing tax is added most Minnesotans will start heading to SF as well.

Gil Dobie wrote:

clenz wrote:I grew up in NW Iowa, pretty much right on the MN boarder, and my family (and pretty much every family) went to Minnesota (be it Luverne, Worthington, Adrian) to buy clothes/school supplies every fall. The driving distance between Sioux Falls, SD and those cities was about the same so the savings were nice (although Sioux Falls is eleventy billion times better than those cities in every single way on their best day and Sioux Falls's worst). However, that has changed in the last decade or so. Sioux Falls is drawing almost everyone from NW Iowa (mostly because the previously mentioned cities are shitty and have only gotten shittier...especially Worthington). If the clothing tax is added most Minnesotans will start heading to SF as well.

Sioux Falls is booming and you hear adds in the Twin Cities recruiting companies to move to SD as they boast their tax relief. If this continue's, you will see movement west over the next 100 years and Sioux Falls continue to move up the list of US cities.

A Wisconsin legislator is trying to lure Minnesota businesses across the border as state legislators debate Gov. Mark Dayton’s budget proposal that would raise taxes for many companies.

“I believe it is important to outline the options for businesses in Minnesota by letting them know that here in Wisconsin we value job creators,” said Wisconsin Rep. Erik Severson, R-Osceola. “Governor Dayton’s budget proposal, especially his tax on business-to-business transactions, will put a stress on businesses and reveal that Wisconsin is a better place to do business.”

In the letter, Severson highlighted the different approaches taken by Minnesota and Wisconsin to close recent budget deficits as the national economy sank. Wisconsin beat back a $3.6 billion deficit without raising taxes. Dayton is looking at raising more than $2.1 billion through tax hikes, with the money going to pay down a projected deficit and increase money to early childhood education and higher education.

Despite Wisconsin Gov. Scott Walker's refusal to raise taxes, the state's economy has lagged. Wisconsin's unemployment rate is 6.6 percent, more than a full percentage point higher than Minnesota. Last year, Wisconsin ranked 42nd for job-creation, trailing Midwestern states, including Minnesota.

"Indicators show that there is not the direct correlation between tax levels and job growth; in fact, Minnesota’s economy has fared far better than Wisconsin’s over the last couple of years," said Dayton spokeswoman Katharine Tinucci. "We would suggest Rep. Severson focus on the problems facing Wisconsin, and we will continue to focus on the challenges facing Minnesota."

Dayton has argued that his tax overhaul and investments in education will stabilize the state budget and create lasting improvement to the state’s workforce, a crucial component for successful businesses.

TwinTownBisonFan wrote:Minnesota has one of the highest standards of living in America.

89Hen wrote:

TwinTownBisonFan wrote:Minnesota has one of the highest standards of living in America.

What does that mean?