St. Paul, Minn. – Senator Ann Rest (DFL-New Hope) said Governor Walz’s proposed plan to lower the state sales tax for the first time in state history would make the system fairer, less volatile, and make Minnesota more competitive with neighboring states.
Senator Rest, who is currently Co-Chair of the Senate Taxes Committee, said the plan modernizes the state sales tax system by recognizing the state has moved toward a service-oriented economy. It lowers the current 6.875 percent sales tax rate to 6.8 percent and expands the tax to “wealth services” provided to individuals by banks, lawyers, accountants, and investment services.
“Lowering the sales tax rate for everyone and expanding the base of services covered by that lower rate is good tax policy and represents long-overdue modernization and improvements to our system,” said Senator Rest. “This proposal recognizes that we’re now a service economy and protects lower-income Minnesotans. The lower rate will make our state more competitive with neighboring states. The proposal will be part of the budget discussion as we move through the legislative session.”
Senator Rest said the plan includes no business-to-business taxes, uses some of the revenue to improve the Research and Development tax credit by making it 25% refundable and funds the Sustainable Aviation Fuel tax credit.
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