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Published January 28, 2013, 06:20 PM

Minnesota Residents Concerned About Outcome of Sales Tax Proposals

Governor Mark Dayton's proposed sales tax expansion could help solve Minnesota's budget woes, but Republicans are wondering how sales tax changes might affect the state's business climate. Locally, people are keeping their eye on what is happening in St. Paul.

By: David Schwab, WDAZ

Governor Mark Dayton's proposed sales tax expansion could help solve Minnesota's budget woes, but Republicans are wondering how sales tax changes might affect the state's business climate. Locally, people are keeping their eye on what is happening in St. Paul.

The changes Governor Dayton wants to make to the state's sales tax are catching the attention of many people. Some East Grand Forks residents are concerned about how it might affect the playing field with places across the river in North Dakota.

Dayton proposes dropping the state sales tax by nearly 1.5 percent but there is a catch -- many new things will be taxed. That includes services like haircuts, auto repairs and accounting services. Reaction to the governor's plans are mixed. Wendy Nyland, Minnesota resident, "I don't want them to raise the taxes on service. Because it is too random and don't know what to expect. " Wayne Bergeron, Minnesota Resident, "Probably overall that might be the best way to go. It will cover more people." Gary Emerson, Minnesota resident, "Maybe they should be looking at their own budgets first to see where they can save there before they start asking for more tax dollars in Minnesota."

The owner of an East Grand Forks hair salon says that adding sales tax to her services could drive customers to Grand Forks. A proposed sales tax on clothing over $100 had some of the same reactions. Republicans say the tax increase will mostly affect the middle class and it will drive jobs from Minnesota.

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