At the center of Gov. Mark Dayton’s proposed expansion of the sales tax in Minnesota is a tax on business to business services, like legal and accounting services. Businesses are concerned that this tax will put them at a competitive disadvantage with businesses in other states. In a hearing Tuesday, Rep. Jennifer Loon, R-Eden Prairie, pointedly asked the commissioner, “What states put a tax on business to business services?” Frans’ answer is complicated — 47 states have such taxes, but the actual services taxed vary by state.
Revenue commissioner Myron Frans on business services tax
The commissioner provides some state by state context for the governor’s proposed sales tax expansion.