Is it time for Minnesota to charge a sales tax on clothing?

A proposal to impose a sales tax on clothes passed a committee test Thursday in the Legislature. The tax would generate more than $250 million in its first year. Today’s Question: Is it time for Minnesota to charge a sales tax on clothing?

  • Steven

    Yes. And services, too.

  • Clark

    Yes, why not give the creative class another reason to depart this state. I have lived and worked an 10 other states in my careeer and believe people and politicians in Minnesota are delusional regarding the quality of life in this place.

  • Peter Soli

    No! It will proportionally put a greater burden on Minnesota’s poor. If it is determined that we need additional sales tax revenue, I suggest a small increase across the board and the addition of a luxury tax on items the wealthiest among us purchase. We need to get more money into our system from those who have it.

  • Allan

    I think a sales tax on clothing would be a good way to raise revenue in Minnesota *if* certain stores are exempted. Donation stores, such as the Salvation Army and Goodwill, should be exempt from the sales tax so that the tax would not be a higher proportion of income from the poor, who are more likely to be shopping at such locations. For those with less income, shopping for clothing is a necessity and shouldn’t be taxed. For everyone else, it is a luxury, such that a small tax would easily be affordable.

  • Della

    Yes! Twelve years ago, when I bought a $900 wedding dress, I could not believe sales tax was not charged. A wedding dress is NOT a necessity.

    A sales tax on clothing should be set up so the poor are not greatly impacted. Maybe tax items over $75 or $100 only.

    I believe services should also be taxed – increase our tax base, spread the burden, and prevent recurring state budget crises.

  • Steve the Cynic

    Absolutely not! It is totally unfair to tax those poor fashionistas who need to have the newest, trendiest designer garments with every changing season. And consider those poor struggling CEOs who need their $2,000 suits to make them look important enough to justify their exorbitant salaries.

  • Cary

    My overall answer is yes, but what’s so special about clothing. ALL products and services need to be taxed at one rate. If you spread the sales tax to all the economic activity in the state, you could most likely lower the tax rate at the same time.

    I can imagine that we could still make an exception for some items deemed to be necessities – say clothing items under $50.

    It is also long past time that Internet products and services are taxed – both in Minnesota and at the national level. A fair, level tax is far better than higher rates on just some items.

  • Rob

    Yes, for clothing (shirts, jeans, underwear) over $100. Tax outerwear over $250. New sources of revenues are needed to solve our state’s budget problems. Just maybe, taxes on high end designer clothes will teach some people to try and live within their means. Those who truly don’t care how much they pay for clothing, won’t mind paying the tax. .

  • Matthew Reinhart

    Yes, absolutely; as long as the tax is a progressive one that does not have a disparate impact on the middle class and the working poor.

  • Barbara

    How about taxing clothing items with a price of over $100. Consider them luxury items. Then those who can barely afford the basics can at least purchase them without paying clothing tax.

  • GaryF

    More people will just buy there stuff on the internet through smaller retailers. The large retailers will be hounded for paying sales tax but the state can’t keep up with all the upstart internet companies.

    When the state instituted the tax on boxes of cigars at the wholesale level, the MN retailers of cigars lost almost all of their box sales because people went to the internet where those companies don’t charge the Minnesota tax.

    So, if we just tax expensive clothing, people will find internet sites that don’t charge the tax, thus hurting our retailers.

  • Neil

    No. And I challenge anyone to truly answer my response to any proposals to raise or create new taxes: where does it end?

  • Garyf

    When is it ever enough? Feeding the insatiable beast we call government?

    It’s never enough, people wanting to spend other people’s money. People wanting to give a little while taking alot from someone else.

    Will it ever be enough?

    When times are good and there is a “surplus” do you think you could ever just not spend and not start new programs?

    Is government the answer?

    How long will the golden goose keep laying golden eggs?

    Who is John Galt?

  • John O.

    No, for two reasons:

    1) Go visit a mall in the Twin Cities in late July and August. The lot is full of shoppers coming from South Dakota, Iowa and Wisconsin who are buying back-to-school clothing for their urchins. Many of them spend a weekend here, so they are staying in local hotels, eating out, going to a sporting event, etc. All of these generate tax revenues.

    You can probably do the same exercise in Duluth.

    2) Expanding the sales tax to clothing–even if someone proposed a drop in the rate–would mean that EVENTUALLY the rate would go back up. At some point, spending needs to get reined in.

  • Sara

    I have not yet heard any elected official or talking head suggest taxing clothing items over $100. (Though I see that solution here on this page). Then, luxury clothing is taxed but not clothing for necessity. It’s not actually a new idea, that’s how it is done in New York.

  • Amy

    Yes, because the state needs another form of revenue. I think that if low income/poor people were given an option, they would rather pay an extra .50 on their $10 t-shirt verses losing their health care. A clothing tax would not stop people from buying necessities. And for low income and middle income people like myself who only buy clothes a few times a year, we will hardly feel it. People in the upper income brackets who have the ability to go on monthly shopping sprees can carry that tax burden just fine.

  • david

    Yes, we have a sales tax on health care (MNCare provider tax), why not clothes. $200 shoes are not a neccesity. Have a reasonable tax write off allowance per person per year for untaxed clothing expense and don’t tax used clothes sales.

  • Kelly

    Yes. Very little of the money that is spent on clothing today is spent on nessesity. Not even underwear. Just go to the mall and look at what people are buying . Don’t forget to look at Victoria’s Secret. This tax will hit a lot of people who come here form other states where they are already accustomed to paying sales tax on clothing.

    Second had clothing should be exempt.

  • ELA

    The discussion on potentially taxing items in excess of (e.g., $100) is yet another example of class warfare. It would be prudent to perhaps suggest that those who call for inequality in this tax structure to be the same individuals who cry discrimination on other opportunities/issues of the day.

  • Carl Ireland

    Yes, by all means!

    With 46 states charging a sales tax for clothing now it should at

    least give Minnesota a “hint” that it makes sense. How can we

    believe 46 states are doing the “wrong” thing and the 4 remaining

    states “have it right”? Clothing is a necessity but people that have less money spend far less on clothes. Any hardship on them would be minimal. They also have access to other sources of clothing such as consignment, Salvation Army, etc. that could be exempt from the tax. The people that spend the most on clothing can well afford the tax.

    Resistance to the tax is a reminder of Winston Churchill’s statement that, “Americans can always be counted on to do the right thing, after they have exhausted all other possibilities”.

  • Paul from St. Paul

    Clothing would not be my first choice, no.

    However, we do need to get real about our need for more revenue. I’d suggest a dime a gallon on gas as a better place to start.

    Eight years of Pawlenty have proven that you can’t balance the budget with spending cuts only, unless you use one-time cheap accounting tricks and are also happy to make Minnesota a second tier state like, say, Texas or Louisiana.

    It’s time for a second Minnesota Miracle.

  • James

    NO. I feel the “middle class squeeze ” more and more every day. Everything expense wise imaginable is going up and my income is flat lined.

    We as a society need to let our politicians know that we need to live within our means and cut out unnecessary spending. If that can be accomplished our taxes would actual go down for a change.

    “I’m as mad as hell and I’m not going to take it anymore!”

    DTOM

  • JW

    No. I live in WI and work in MN. I shop for my family’s clothing in MN because it saves me money as opposed to buying in WI. But if MN adds sales tax to the clothing, it will become more expensive to shop here. I will no longer buy clothing in MN, but rather in WI where the sales tax is 2% less.

    So, is it worth it for the stores to take a hit on the sales that they will miss by people like me?

  • Steve

    Yes. A sales tax on clothing is actually progressive since lower income residents are not buying Armani suits. I moved to Minnesota 30 years ago, and have always been puzzled as to why we do not have sales tax on clothing. I would want to see a comensurate reduction in the overall sales tax rate, however.

  • MP

    Yes, many from NW Minnesota travel to Fargo or Grand Forks, ND, to shop for clothing, therefore pay a sales tax to ND. Why not then in Minnesota?

  • Lawrence

    Obviously, nobody wants to pay more taxes. More importantly, sales taxes tend to claim more money from the state’s poorest income earners and far less money from the state’s wealthiest earners. I do agree that it is time to collect more revenue whether we want to or not. Baby boomers still have not retired yet because many of them have large amounts of debt just like the rest of the country. We’re going to need a lot of the services for the elderly when these boomers retire. We’re also going to need some kind of health care plan too because many income earners are getting priced out of that market as well.

  • Jacob

    How often do we really shop for clothes? It’d be a painless tax; one we hardly think about each time we shop. A sales tax on clothes would help close the huge Minnesota deficit. Otherwise it means more pot holes, less education, fewer police, and more crime– I think that extra dollar on a $15 purchase is worth it all for our community.

  • Gabriele

    No. Clothes are a basic necessity, just like food. Bad enough that cotton fabric gets taxed because someone thinks its for quilting only.

    Of course, we could re-classify some clothing items rich people buy as luxury items and tax those.

  • Pamela

    No way!!!! I used to work in retail and I’m sure it will hurt business. I opened a store at the MOA back when it first opened and I remember chartered flights coming in from out of country with the enticement of no sales tax. When I’m traveling in CA or NYC and I go shopping and see something I like, I wait until I get home to buy it. It really will make a difference for me. I love living in MN and this is one thing that I have always thought was such a nice benefit for living here. The weather here will not draw people to our state, but no sales tax on clothing will!

  • Craig Westover

    This is a very simplistic way to put the question that does not further the debate.

    This larger issue at stake is reforming Minnesota’s tax system to be both more effective and efficient based on economic principle, not ideology.

    Economic principle says that broad-based, low-rate taxes create less excess burden on an economy than do taxes on productivity. that means that a dollar taken from the economy in sales tax is less-distorting and harmful to the economy than a dollar taken in corporate or individual income tax.

    The logic behind that statement is that at the margins, people do things to avoid paying higher taxes — they limit their productivity or use resources to limit their tax liability. These activities hurt the overall economy.

    Expanding the sales tax to clothing and consumer services is the right thing to do, BUT ONLY with a corresponding elimination of the corporate income tax (which is also a regressive tax) and a significant cut in individual income taxes.

    The Bakk proposal is the worst of both world because it takes additional money out of the economy to fund government and imposes a burden on the economy without corresponding relief. It hurts the business climate without offsetting the hurt with tax relief.

    Unfortunately, your question simply furthers the shallow view of the subject. A move from taxes on productivity to taxes on consumption is absolutely necessary to create a stable source of revenue for legitimate government functions and to make Minnesota more competitive for global capital and new business ventures. Your question doesn’t help get us there.

  • John S

    Clothing is a necessity and imposing the state sales tax on clothing will obviously be felt more by lower income people than those with higher incomes. The idea of only taxing items over a certain cost, I think, is a good one. Of course, this would diminish the tax income for the state. Why not make the tax on high priced clothing a “luxury tax’ with a higher rate, say 10%. (This might also help parents convince their kids that buying those expensive designer clothes isn’t really necessary!)

  • Margaret Wall-Romana

    Yes. I routinely buy nice, fashionable clothing in Minneapolis at various thrift stores. (Banana Republic and Ann Taylor for 99 cents, anyone? I kid you not.) Folks who feel they cannot afford to or don’t want to pay the sales tax don’t have to buy new clothing to properly and stylishly dress themselves and their kids. And folks who have the luxury of affording new clothing can afford to be taxed, as they are in most states. Thank goodness this issue is finally being given serious attention!

    Margaret in Minneapolis

  • Dean

    No, it would be yet another outrage. The sales tax is the most regressive of all forms of taxation. The less fortunate spend 100% of their income on living expenses. Any increase in the sales tax is a tax hike on the poor – what a bargain huh?

    In contrast, the rich spend only a tiny bit of their income on necessities. Thus the sales tax isn’t a big factor for them. The income is their concern.

    It’s obvious why the sales tax hike is being pushed on us – the rich donate significantly to our campaigns.

  • Rich N

    No, please! Other states (like FL where I hail from) charge a sales tax on clothes – but then again we don’t pay state income tax in FL.

    Let’s get more efficient on the spend side and not just trigger a tax to pay for stuff.

    Thanks

  • Joey

    I’d rather see an increased tax on sodas and other sugary beverages. The funds could be dedicated to health and wellness programs–like the ones Pawlenty keeps cutting.

  • Steven

    All sales taxes are regressive. That doesn’t necessarily mean they’re bad, since the state services they pay for generally benefit the poor more than the rich. It’s not clear to me that a tax on clothing is any more regressive than other sales taxes.

    If we want to make the sales tax less regressive, we should lower the rate and include not only clothing, but services as well. The poor are more likely to have home haircuts, do their own taxes, fix their own cars, etc. It’s only the rich who can afford to hire everything done. Why should services be exempt, but the tools and hardware that do-it-yourselfers need be subject to tax?

    And btw, sales taxes are not the most regressive tax. That would be the business tax, because businesses don’t really pay it; they either pass it on to their customers or pay lower wages to compensate.

  • tom

    If this looks like it’s going to pass, I WILL be marching naked on the capital. ENOUGH!

  • James

    I agree that sales tax on clothing is regressive to a point. Obviously luxury clothing items are totally discretionary and therefore taxing those purchases would not be regressive.

    The other part of sales tax that many do not consider is the impact on local businesses. It is quite easy to purchase items on the internet these days and avoid paying sales tax as long as the business is not in your home state. This defeats the purpose of raising new revenue and hurts small businesses by sending money out-of-state instead of supporting the local economy.

  • RichG

    No.

    I am not against increased taxes. In fact, we’ll have to increase some taxes to take care of our deficit. Those who keep saying that state and local government need to get more efficient should remember that they have been saying this for 10+ years, and every one of those years state and local governments have cut back in order to meet budgets with ever fewer funds available. How much “fat” can there really be after all this “fat-trimming?”

    Nevertheless, taxing the sales of clothing is not the way to go. Lack of a sales tax on clothing is one of the things that attracts non-Minnesotans to visit our border cities and, especially, the Mall of America. These visitors from out of state pay us other taxes in the form of lodging taxes, restaurant taxes, service taxes, sales taxes on non-clothing items, etc., not to mention the money they spend and leave in our localities. If we eliminate the clothing exemption from the sales tax, Minnesota will no longer be anywhere near as attractive to these potential visitors. They will just wait for their own state to have “tax free” days, as many do, or pay the lesser sales tax in their home state, and buy in their own neighborhoods. We will come out the loser, both in terms of lost tax revenue and in terms of diminished attractiveness as a tourist destination.

    A very bad idea.

  • Tony

    No.

    But cell-phone plans should be taxed more. Boat registrations should be taxed more. Snowmobile registrations should be taxed more. High incomes should be taxed more.

    Tickets to sporting events should be taxed more. Retail sports equipment should be taxed more.

    People need clothes; they don’t need any of these other luxury items.

  • Christy

    No!

    Clothing is a necessity – next they will want to tax groceries! Let’s not kid ourselves, do you really think that the State of Minnesota would use the funds wisely and pay down our deficient? NO! They would think that they have free reign on additional revenue. They need to cut the fat and learn to leave within their means.

  • Steve

    Yes, but as you broaden the taxable base lower the tax rate. I would rather we increased the base by taxing services, again this will broaden the base but lower the rate. Lower the rate so it is not revenue neutral, we need to increase our revenues to support our basic services, schools, roads, and safety. We seem to be coming out of this Great Recession with a reset in the rate of our consuming things. This leads me to say we now need to tax service labor on the repairs and services we consume. We could increase our base income in the income tax area that does not pay to help the poor. We need to raise the Income tax on the upper 3 or 4 brackets to make that tax more progressive again, like it use to be. In case people wonder I am in the top 4 brackets and it is a shame how my income taxes have gone down the last 7 years.

  • Phil R

    Yes. Another small step to help the state budget problems.

  • Janet

    I live in a border city. Most of our clothes shopping is done in Wisconsin where we do pay sales tax on clothing. The sales tax in WI does not deter us from traveling there to shop. The trip to WI is based on convenience and availabilty. I would support a change in MN laws to include sales tax on clothing. The additional cost of sales tax on clothing would not deter shoppers. Legislatures may want to consider not including the clothing sales tax on clothes purchased at the second hand shops such as Good Will or Salvation Army. These shops are primarily used by those least able to afford an increase in taxes.

  • Roland

    No sales tax increases until we restore the progressive income tax system in this State.

  • Susan

    We should not tax clothing. People come from Wisconsin to buy untaxed clothing, that’s a boon right there. I do have a suggestion though, every once in a while, while driving on 35E South, on the “practice freeway” the area near downtown St. Paul, where the speed limit is supposed be 45, there should be more highway patrols and troopers, they could give tickets to all the speeders, and there are many, they drive by me at a very high rate of speed. We could probably settle our deficit pretty quickly! When there is a presence of law, the brake lights light up like magic!

    Maybe cameras, I know I don’t like that idea very much, but the speeding around town is getting pretty out of control, and it really would bring in a lot of money.

  • Alisa Thompson

    Yes, exempting clothes for children, 2 pair of footwear per person per year, and all second-hand clothing. I almost never buy new clothes, I almost always buy at thrift or consignment stores. If you can afford to but clothes new, you have to be able to afford the few extra cents in taxes.

  • Noelle

    Why not just tax clothing and shoes over $50? No one NEEDS clothes over $50 at that point they aren’t a necessity. If they are a uniform for work and you save the receipts you’d get the money back on taxes anyway…..

  • mm

    Yes. I am from another state where clothing was taxed and often forget that it isn’t taxed here, even after 10 years. This is an excellent source of revenue for the state that doesn’t single out one sector in the community–everyone buys clothes and the tax is proportionate to how much one chooses to spend.

  • JoAnna

    As a single parent of 2 boys I believe we should not tax clothing sales. Proportionately the amount of my discretionary income that is spent on clothing and shoes for two growing boys is disproportionately higher than someone whose income is in the higher tax brackets. I already struggle with our family finances and should not pay tax to provide my children the BASIC necessities like food and clothing!

  • Cindy

    Yes.

    I grew up in a family of six in poverty in a state with tax on clothing and I always had clothes – and we didn’t have Walmart or Target.

    If we do add the clothing tax it should be paired with a Luxury tax.

  • Carol Orban

    Yes. Tom Bakk’s plan is workable, and most people have more clothes than they need. I think a luxury tax would be a good idea as well.

  • Tim

    Absolutely not. We should cut spending first.

  • Steven

    Of course, “we should cut spending first.” But that’s already been done, in spades. It’s time to raise more revenue.

  • Ross

    Yes. Its one of the only sure ways of collecting from everybody.

  • Brandyn

    MN has plenty of revenue as it is. More tax will only encourage more wasteful spending. No new taxes or revenue streams. Let’s work with what we have.

  • Hanna C.

    No. clothing is a necessity. I consider myself pretty liberal. I’m all for universal healthcare and expanding the welfare state. But clothes? heck no! It makes it harder for people who can barely afford to buy new clothes as it is. What SHOULD be taxed is fast food and junk food in grocery stores. Raise property taxes or income tax, just don’t touch my clothes.

  • Elliott Olson

    is this proposal only for new clothes or used as well?

  • Cate

    No more tax. Minnesota is already one of the most highly taxed states in the country. Cut the entitlement programs instead.