Minnesota clothing tax: 3 different opinions - KMSP-TV

Minnesota clothing tax: 3 different opinions

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When it comes to raising taxes, even Gov. Mark Dayton and a DFL-controlled legislature have had trouble garnering support for a new tax bill. There seem to be three different opinions regarding what should be taxed, and who should start seeing increases.

With more than 500 stores, there are countless deals at Mall of America, but for shopper Suzanne Lee, the most elusive was a dollar bill she discovered dropped over the second floor railing.

"We couldn't leave here without getting the dollar," Lee said.

She's not the only one who will do just about anything to save a buck. Each year, about 16 million tourists visit Mall of America and spend $500 million in the process. It's Minnesota's number one tourist attraction, and part of the draw is no sales tax on clothing.

"It's nice, I mean I'd rather buy my clothes in Minnesota rather than Wisconsin because they have the tax," shopper Dana Ludwig said.

The Senate tax plan to balance the budget would eliminate the tax-free incentive to buy clothes in Minnesota. The idea is not included in the House tax plan and is not supported by Gov. Dayton.

"I don't believe we should be increasing taxes on middle income Minnesotans," Dayton said amid tax bill discussions last week.

A sales tax on clothing would raise $541 million in additional revenue, but some say it would do more harm than good.

"If our research is correct, most of those people will not come to Mall of America or Minnesota if we have a sales tax on clothing," vice president business development at Mall of America Maureen Bausch said.

Clothing only makes up about half of MOA's sales, and for every dollar spent inside the mall, tourists spend two to three dollars on other taxable goods and services, like hotels and restaurants.

The House tax plan has its own critics who say increasing the tax on beer, wine and alcohol could hit the middle class just as hard.

"Whatever you have to tax; I believe in taxes. I think we should all pay our fair share. Where it comes out, clothing could really hurt less fortunate people, so it might not be the best place," shopper Mike Vlaska said.

The Senate tax bill will be debated on the floor Monday, but while they propose expanding the sales tax to clothing, they would lower the overall sales tax rate from 6.875 percent to 6 percent.

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