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Published April 11, 2013, 10:36 AM

Senate plan would expand Minnesota sales tax, cut rate

The debate over the size and reach of Minnesota's sales tax is back on at the state Capitol.

ST. PAUL, Minn. (AP) — The debate over the size and reach of Minnesota's sales tax is back on at the state Capitol.

A wide-ranging tax proposal that Senate Democrats released Thursday would make certain consumer services subject to the state sales tax while lowering the rate that gets charged on all purchases. Unlike a controversial plan from Gov. Mark Dayton that he later gave up on, the Senate plan steers clear of taxing business-to-business services.

Among the consumer services that would be taxed are: haircuts, spa treatments, tattoos, sports lessons, elective cosmetic surgery and wedding planning.

Minnesota's clothing tax exemption also would go away, but a new credit could be claimed on income taxes.

In exchange for the broader base, the state tax rate would fall from 6.875 percent to 6 percent starting this summer.

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