New Taxes May Squeeze Shoppers, Business Owners
EDINA, Minn. (WCCO) — Store owners and shoppers say they understand the state needs money, but they fear a tax on clothing would not only change the way Minnesotans shop, but the way people outside the state spend their money here.
At Brides of France in Edina, women come seeking perfection for one of the most important days of their lives.
“It doesn’t do it justice looking on the rack, and then once you put it on, it’s like ‘Ahhh,’” Jodi Stanton explained. “It just feels right.”
Ranging in price from $1,200 to more than $3,500, the wedding dress is expensive. Add sales tax on top of that, and it might change the way some women shop.
“It is something that’s a little extravagant, but it also is something that you don’t need an extra fee added onto,” said Jill Shadler of Brides of France.
Under Gov. Dayton’s budget proposal, every individual item of clothing that’s more than $100 would be taxed at the reduced 5.5 percent.
But some retailers say that no matter how low it is, the tax would jeopardize out-of-town sales — about half the business at the Mall of America.
“It’s one of my favorite sales pitches to give to people,” Shadler said. “It’s like ‘Hey you are from out of town, I’d just like to let you know, welcome to Minnesota, you do not have sales tax.”
Mall of America pulls in about 17 million tourists annually, and 40 percent of those people come because there’s no sales tax on clothing.
MOA executives say if the governor gets his way, it will only be the beginning.
“We might be naive in thinking that, while it might be lowered for some time, it won’t eventually creep up into the neighborhood of other states, 10 percent and beyond,” said Mall of America’s Maureen Bausch.