Senate plan would expand Minn. sales tax, cut rate

8:38 AM, Apr 11, 2013   |    comments
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ST. PAUL, Minn. - 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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