With Democrats leading the Legislature this session, there's bound to be a lot of tax talk this session -- and lawmakers spent Wednesday debating adding a new statewide sales tax to online purchases and some clothes.
Sales taxes tend to be topics businesses typically oppose, but the bill currently on the table is one small businesses -- like Weinhagen Tire, in St. Paul -- support.
"This business is 90 years old," Mike Weinhagen told FOX 9 News. "We survived the Depression and a world war."
Even so, Weinhagen says everyday battles still exist. The latest is a sales war waged by online retailers like TireRack.com, which do not apply Minnesota sales tax to their sales.
"Right out the gate, it puts us at a 7.652 percent disadvantage because the online retailer has the opportunity to sell that product without charging that," Weinhagen explained.
Sen. Ann Rest, a Democrat from New Hope, believes her bill -- which would impose an Internet sales tax -- will level the playing field, and many businesses agree.
"This non-collection is a competitive disadvantage, and another attempt to undermine Main Street, Minnesota," said Nancy Breymeirer, of the Metro Independent Business Alliance.
It's also a money-maker for a state facing a $1 billion deficit. If passed, the move could generate an estimated $4.3 million in 2014, and $5.4 million in 2015; however, it's not an easy sell to at least one Republican who has expressed concern about raising the overall state tax burden.
"Technically, it is a tax compliance issue -- but as a practical matter, people don't do that," said Sen. Dave Thompson, R-Lakeville. "From the perspective of the consumer, who orders a lot of his or her things online, it's a tax increase, unless we reduce taxes elsewhere to compensate for it."
Raising the sales tax on clothing is a suggestion Republicans -- and even some Democrats -- may take issue with. On Wednesday, FOX 9 News got a peek at the list of some items that could be taxed in sales over $200.
Some of those items include:
The following items would be exempt from the proposed tax:
At this point, however, there is no estimate of what that tax could raise. Senators plan to look into that in the weeks to come as discussions continue.