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Business leaders, retailers digest Gov. Dayton’s tax initiatives

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Some business leaders are applauding the smaller sales tax rate that's among Gov. Mark Dayton’s proposed tax changes, but many retailers balking the idea to tax clothing above $100 and a range of services that have long been exempt. Dayton also proposes the same strategy with corporate taxes -- lowering the rate, but eliminating many exemptions.

Bruce Nustad, president of the Minnesota Retailers Association, told the Pioneer Press, "We don't like the clothing tax, but we're trying to be judicious and look at the entirety of the proposal." He's also concerned some retailers would find loopholes to avoid the new tax, like selling a right and left shoe separately.

The owner of Heimie's Haberdashery, a high-end clothing store for men in downtown St. Paul, told the newspaper he thinks the proposed tax on clothing is "bogus."

Minnesota Chamber of Commerce Vice President Laura Bordelon told the Star Tribune, "[This] could have a serious impact on job providers as a whole." She applauded the proposed tax on online purchases and the business property tax freeze.

Officials at the Mall of America have also spoken out against adding taxes to clothing and insist it would deter tourists from visiting Minnesota, including international travelers.

Meanwhile, the president of the Duluth Area Chamber of Commerce says he's open to Gov. Dayton’s plan to cut the Minnesota sales tax rate and apply it to more sales items, the News Tribune reports. “It was anticipated, and we see the logic in it,” said David Ross. “The test will be how fairly and equitably it is implemented and applied.”

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