Clothing sales tax bill proposed at capitol - KTTC Rochester, Austin, Mason City News, Weather and Sports

Clothing sales tax bill proposed at capitol

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ST. PAUL, Minn. (KTTC) -- It's a bill proposal that has never been accepted in Minnesota, but the state is only one of four who don't do it... a sales tax on clothing.

Many Minnesotans enjoy that apparel hasn't seen the extra fees, but it likely means a different category is picking up the slack.

That was the center of discussions Wednesday at the capitol.

"Taxing clothing is long overdue," said Sen. Ann Rest (DFL - New Hope).

A state Senate subcommittee reviewed a series of sales tax bills, including the one to make clothing sales above a $200 taxable.  Rest, co-author of the bill, said the tax base needs to be broader.  "We rely way too much on the property tax to fund those things that Minnesotans want and that they need," Rest said.

Weighing in on the meeting was an official for Minnesota's largest tourist attraction: The Mall of America.  "I'm hoping we were able to communicate how important not having an apparel tax is on attracting tourism to the state," said Maureen Bausch, Executive Vice President of Business Development at The Mall of America.

Bausch says anything to de-rail the tourism flow would not be a good idea because the current no-tax pitch is powerful.  "This one tax would decrease our tourism, at least our tourism, by 40-percent," Bausch said.

However, Rest disagrees. "It's just a little bit far-fetched to make the claim that people will not come to the Mall of America which is the number one attraction in Minnesota," Rest said.

Sen. Julianne Ortman (R-Chanhassen) is also on the committee and raises  question.  "Are we really talking about revenue increases? Or are we talking about good tax policy changes that won't impact the bottom line?" she said.

Rest chooses the first option.

"Broaden the base and lower the rate," she said.  "We're going to be looking at other areas of the sales tax that do the same thing."

"And every time Minnesota raises taxes, there's less opportunity for hiring, buying, investing, and educating," Ortman said.

Rest says it's always an uphill discussion because people seem to have emotional reaction to taxing something they think is a necessity.

The number one tourist attraction in Minnesota is the Mall of America.  Number two is another retailer... Cabela's in Medford.

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