Minn. Senate passes tax increases after failure, reconsideration - New York News

Minn. Senate passes tax increases after failure, reconsideration

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  • TAX DEBATE: Extend sales tax to clothing?

    TAX DEBATE: Extend sales tax to clothing?

    Tuesday, April 30 2013 1:01 PM EDT2013-04-30 17:01:28 GMT
    One of the most controversial and highly-publicized components of the tax bill approved by the Minnesota Senate on Monday is the push to tax clothing -- but many are pushing back.
    One of the most controversial and highly-publicized components of the tax bill approved by the Minnesota Senate on Monday is the push to tax clothing -- but many are pushing back.
ST. PAUL, Minn. (KMSP) -

On Monday, the tax debate in the Minnesota Senate ran the full gamut -- from an initial rejection of the proposed tax increases including higher income taxes on the wealthy to a motion to consider and eventual passage.

The DFL-sponsored bill fell by a 34-32 vote on Monday afternoon, but after a private huddle with senior Democratic senators, one of the senators who voted against the bill made a motion to reconsider and vote again.

A handful of suburban Democrats joined minority Republicans in opposing the package the first time around. Senators spent a short time debating the bill a second time before a motion to adjourn failed 28-39 failed on the floor.

Shortly thereafter, a second vote was held and the measure passed 35-31. Already, both sides are accusing the other of gamesmanship.

"The first vote, they voted their conscience and got word from the party bosses and did what they had to do," said Senate Minority Leader David Hann.

Majority Leader Tom Bakk disagreed, pointing out at least three Republicans voted in favor of the bill.

"That kind of trickery isn't very honest," Bakk said.

For shoppers, the bill is a sort of mixed bag because it seeks to drop the state sales tax from 6.87 percent to 6 percent, saving taxpayers an estimated $1.2 billion during the next two years; however, it also aims to expand the number of taxable items to include:

- Over-the-counter drugs

- Sporting events

- Piano lessons

- Athletic instruction, like golf lessons

- Hair cuts

- Auto repair

Those taxes would impact businesses as well as customers. The American Trucking Association estimated the repair taxes alone could cost a trucking company with 25 rigs an extra $15,000 annually.

The tax package also would have bumped cigarette taxes up by 94 cents a pack and it would have done away with the clothing exemption.

The suggestion of taxing clothing valued at $100 or more is particularly contentious, and clothing tax is not included in the House's tax plan. The tax is expected to bring in $500 million in the next two years, but it faces opposition from retail giants like the Mall of America.

Added up, the Senate's tax package aims to raise more than $1.8 billion, leading to some heated exchanges between Republicans and Democrats.

"Why do we need to raise $1.84 billion when our deficit is $627 million?" asked Sen. Julianne Ortman (R-Chanhassen).

The bill still needs to be reconciled with the measure passed in the House, which includes more taxes but does not include a tax on clothing.

The Associated Press contributed to this report.

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