Some business, already taxed, praise 'fairness' of Dayton plan


Some business owners have heaped criticism on Gov. Mark Dayton's proposal that more business services be taxed in an effort to raise more money for the state and eliminate a $1.1 billion budget deficit. Under the plan, services provided by the likes of lawyers, accountants and consultants would be subject to a new tax, and Dayton is weathering a hail of protest from them.

But other business owners say the plan brings some fairness to the randomness of state tax rules, the Star Tribune reports. The newspaper notes that under the current system, dog groomers are taxed but not barbers, dry cleaners are taxed but not coin-operated laundromats, and calls to 1-900 numbers but not dating services.

"The lines have been drawn over the years, and they've been relatively arbitrary," Commissioner of the Minnesota Department of Revenue Myron Frans told the newspaper.

Dayton last month outlined a budget proposal that included sweeping tax reform plans. Among them: a lower sales tax rate but broader sales tax on businesses and services, and a slightly lower corporate tax rate.

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Many of Minnesota's business leaders are frustrated with Gov. Mark Dayton for scuttling some of their biggest goals in the legislative session. Dayton closed the book on the session by vetoing a largely Republican-written bill that would have provided property tax relief for small businesses, as well as increasing tax credits for research and development and to those who invest in start-up stage companies.