- Minnesota Governor Tim Walz proposed a budget that includes expanding the sales tax to more services and lowering the state sales tax rate.
- The sales tax changes would take effect on October 1, 2025.
- The state sales tax rate would drop to 6.8 percent.
- The sales tax base would be expanded to include accounting, legal services, brokerage, and some bank service charges.
- Business to business transactions would remain sales tax exempt.
- The proposed sales tax changes would raise an additional 185.2 million dollars in the 2026-2027 biennium and 235.8 million dollars in the 2028-2029 biennium.
- Broadening the sales tax would help modernize Minnesota’s sales tax system.
- Republicans are generally against expanding the sales tax.
- A similar plan introduced in 2013 by then Governor Mark Dayton was rejected by the Minnesota Legislature.
- Nebraska, Virginia, and several other states that have tried to tax more services faced pushback.
- Some states have succeeded in making a broader base, but usually not without some concessions.
Source: avalara.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
