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PoliGraph: MN more like other states under Horner's sales tax plan

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By Catharine Richert

To help reduce the deficit, Independence Party gubernatorial candidate Tom Horner has proposed revamping the state's sales taxes.

Doing so will "make Minnesota's sales tax consistent with most other states," a press release on his website states.

So, how does Horner's sales tax plan stack up? It's true that his proposal would make Minnesota more like the rest of the nation.

The Evidence

Horner's tax plan has several components, but in this instance he's specifically talking about his plan to lower the general sales tax and expand sales taxes to previously exempt products and services.

Currently, Minnesota has the seventh highest sales tax in the country at 6.875 percent. But Horner wants to lower that to 5.875 percent, giving Minnesota the 25th highest sales tax in the country. Doing so would put Minnesota right in the middle of the pack, with a sales tax just above the national average of about 5 percent.

It's important to note that Horner would also allow counties to increase sales taxes by half a percent to offset his proposed reductions in state aid. So, in counties that take this option, the net impact on the consumer would be a half percent reduction in the sales tax.

Unlike most states, Minnesota exempts clothing from sales tax. Horner's plan would change that. (He's also talked about expanding sales tax to other services, but hasn't detailed his ideas.)

The Verdict

Horner's claim is accurate: The sales tax reduction and the expansion of sales tax to clothing would make Minnesota more like other states.

Sources

Tom Horner for Governor, Horner-Mulder Release Budget Outline, accessed Aug. 24, 2010

Tom Horner for Governor, Minnesota Works: Horner-Mulder Budget, accessed Aug. 24, 2010

Minnesota Public Radio News, Horner outlines budget plan: Taxes, cuts, delays, by Mark Zdechlik, Aug. 23, 2010

The Federation of Tax Administrators, State Sales Tax Rates and Food & Drug Exemptions, January, 2010

Minnesota Department of Revenue, Minnesota Sales and Use Tax, accessed Aug. 24, 2010

The Minneapolis Star Tribune, Is it time to tax clothing sales?, by Baird Helgeson, March 4, 2010

Interview, Mark Haveman, executive director, Minnesota Taxpayers Association, Aug. 24, 2010

PoliGraph is a regular series of reports that checks the veracity of politicians' claims. It is a collaboration between Minnesota Public Radio News and the Humphrey Institute at the University of Minnesota.

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