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Crazy Sales Taxes In Minnesota

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Even if i liked Justin Bieber, why would I want his new ringtone?  No, I’m just saying that IF I liked him!

Now, there’s a tax on that.  The ringtone.  Only if you live in Minnesota.

According to the Star Tribune, ringtones, repair labor and watching a pay-per-movie will now come with a tax.

The Minnesota Department of Revenue published guidance Thursday on an array of sales tax changes the Legislature adopted last month. Most take effect on July 1.

The expansion of the sales tax is a small piece of a $2.1 billion plan to raise more state revenue to plug a budget hole while ramping up spending on education and other priority programs. The new sales tax money will help cover the cost of making purchases by local governments tax-free, a savings to them exceeding $100 million per year.

The new taxes are narrower than those proposed earlier by Gov. Mark Dayton, who abandoned a major sales tax overhaul amid stiff resistance.

Ringtones, digital books, business repairs will soon be taxed in Minn. _ with a few catches

  • Article by: BRIAN BAKST , Associated Press
  • Updated: June 13, 2013 – 1:50 PM

ST. PAUL, Minn. — Need that new Justin Bieber ringtone? Come July 1, buying it will carry a Minnesota sales tax. Hiring a repairman for the office photocopier? That labor will be taxed. Catching a pay-per-view movie on satellite television? There’s a tax on that, too.

The Minnesota Department of Revenue published guidance Thursday on an array of sales tax changes the Legislature adopted last month. Most take effect on July 1.

The expansion of the sales tax is a small piece of a $2.1 billion plan to raise more state revenue to plug a budget hole while ramping up spending on education and other priority programs. The new sales tax money will help cover the cost of making purchases by local governments tax-free, a savings to them exceeding $100 million per year.

The new taxes are narrower than those proposed earlier by Gov. Mark Dayton, who abandoned a major sales tax overhaul amid stiff resistance.

Many of the new sales taxes fall on business-to-business transactions. That includes equipment repair for computers and industrial machinery, with some exceptions.

The labor costs for fixing computer terminals, video records and microscopes will be taxed, for instance. But labor fees tied to such things as fixing aircraft, company vehicles and office furniture will remain exempt, according to the tax collection agency. Prewritten computer software will be considered taxable, but custom programs will not.

Some consumers will pay more. Digital downloads — from books to e-greeting cards to movies and songs — will be subject to the 6.875 percent sales tax.

But there are caveats there as well. Digital literary works are about to be taxed. But online newspapers, magazines and other news products that require purchase will not be. School textbooks of any form remain free of sales taxes.

Myron Frans, the state’s tax commissioner, said the changes update Minnesota’s tax code for the Internet shopping age.

“If you go to a bookstore and buy a book right now it’s subject to sales tax in Minnesota, but if you download that same book electronically from wherever it is not taxable,” Frans said. “This will change those so the same item whether it’s a tangible item in the store or in electronic form, it is all taxable.”

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