Clothing in Minnesota could soon be taxed.
Under a new bill introduced in the legislature, certain clothes would be hit with a state sales tax this upcoming summer.
At Graif Clothing in Mankato, you can find many items priced in excess of $200. If a new bill is signed into law, those items would be hit with a state sales tax.
"It's going to affect any better suit that we sell that goes out the door--it's going to be taxed, so that will affect that business definitely," said Randy Appel, owner of Graif Clothing.
The chief author of the legislation is Senator Ann Rest of New Hope.
"We are one of only, I think it's 4 states that has a sales tax that does not impose the sales tax on clothing," said Rest, DFL-New Hope.
Rest says the move would add more revenue to state coffers.
But businesspeople say, record keeping would be made more difficult.
"It would be a lot more hours, and a lot more intense than what we currently have to do," said Karissa Baukol, Graif Clothing co-owner.
Appel says the legislature should be looking at other measures, rather than implementing a state sales tax.
"We really need to modernize our sales tax system," said Rest. "We need to broaden the base."
If the bill passes, here's how the clothing sales tax would work. Take for example a suit with a pricetag of $695. Under the legislation, the first $200 of the suit would be tax exempt, but the remaining amount, $495 would be hit with a state sales tax.
"It kind of takes away the advantage the State of Minnesota has had selling clothing to people from out of state," said Appel.
Senator Rest says she is aiming to have the state sales tax rate set at 6 percent. That amount would also apply to certain clothing.
If the measure is signed into law, the sales tax would apply to various clothing purchased after June 30th this year.
