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Sales tax reform resurrected in Minn. Senate

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In the wake of some brighter state revenue forecasts, Gov. Mark Dayton earlier this year scrapped his proposal that Minnesota broaden its sales tax structure to tax more goods and services.

But Senate Democrats are breathing new life into the controversial proposal. A plan unveiled Thursday would include sales taxes on clothing, tattoos, haircuts, spa services, piercings, sports and dance instruction, cosmetic surgery, and personal shopping services, MPR reported.

According to the plan, corporate income taxes would be scaled back, and a yearly rebate would be available to lower-income Minnesotans hit hardest by a clothing tax, the Star Tribune reports. Senate DFLers also back a plan floated in the House that would create a sports memorabilia tax to help pay the state’s $348 million share of the new Minnesota Vikings stadium, the newspaper reports.

As Dayton had earlier proposed, the tax rate would be lowered as the list of taxed goods and services was expanded. The Senate proposes lowering the rate to 6 percent from 6.875 percent, the Pioneer Press reported.

Sen. Ann Rest, DFL-New Hope, the chief author of the newest proposal, said the tax change would not translate to a tax increase for consumers, the Pioneer Press reported. "We're striving for reform, not to raise revenue," she said.

GOP lawmakers say the tax expansion would kill jobs, and a Dayton spokesman said he also wouldn't go back to supporting new sales taxes, the Star Tribune reports.

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