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2 Bills Propose Sales Tax On Clothing In Minnesota

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(credit: CBS) Rachel Slavik
Rachel Slavik joined the WCCO team in October of 2010 and is thrill...
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MINNEAPOLIS (WCCO) — A proposal to reform taxes in Minnesota could have you paying more for clothing.

Two bills will go before lawmakers, this year, that would implement a sales tax on clothing. Right now, Minnesota is one of the few states in the country that doesn’t have a sales tax on clothing.

As the owner of Bumberschute, Kathryn Paulsrud has built a career on clothing.

Her Edina store sees a steady flow of customers searching for high-end items.

“I have a bit higher price point for my clothing,” Paulsrud said.

Because of the higher price point, much of her inventory would fall under a new clothing sales tax proposal.

“This effects me tremendously, so this is something I’ll keep my eye on, absolutely,” Paulsrud said.

Senate Bill 9 would impose a sales tax on any clothing item over $200.

For example, if a dress cost $500, customers would only pay sales tax on the remaining $300.

“Just not having a sales tax for clothing really encourages people to stay in Minnesota and spend their money here,” she said.

But another bill, also up for consideration, would extend the tax to all clothing, no matter the price.

“I think it would be a really big bummer to have that,” said Logan Osberg, a shopper.

Senate Bill 11 would offer tax credits for families of modest income, but would end a huge incentive for shopping in Minnesota.

“Going to school in Madison, I wait to come home to go shopping,” Osberg said.

The bills’ author Sen. Ann Rest, said the proposals are a step towards tax reform. It would allow broader tax base that could ultimately lower other taxes. It would also level the playing field for all retailers.

“Why is it we should pay sales tax on a book and not a sweater? How does that speak to tax fairness,” said Sen. Rest, D-New Hope.

A proposal to pay more, leaving some wondering, if it’s worth the cost.

“I think it’ll be a detriment to my shopping area and Minnesota shopping,” Paulsrud said.

This isn’t the first time a proposal to implement a sales tax has come up at the legislature. The last time was in 2010, but the measure was defeated.

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