Governor’s Tax Broadening Plan: Which Services Are Included?

If it becomes reality, cities would likely be required to pay the sales tax on services.
(Published Feb 4, 2013)

Although we have not yet seen a bill on Gov. Dayton’s sales tax proposal, more details on the intent of the plan have begun to emerge. The Minnesota Department of Revenue has posted information on some of the types of services that would be subject to the 5.5 percent sales tax under the governor’s base broadening plan.

Cities would likely be required to pay the sales tax on these services. Please keep in mind that the governor’s plan would also extend the sales tax to other goods and personal services. Those are not covered in this list.

The League is collecting information from cities to find out if the governor's sales tax plan will overall help or hurt cities. Keep in mind that the governor’s sales tax plan includes a decrease in the general sales tax rate from 6.875 percent to 5.5 percent, but it also applies the sales tax to these services. Please send information about the net impact of the governor’s sales tax plan on your city to Gary Carlson or Rachel Walker (see right).

Examples of services covered by sales tax under the governor’s proposal include:

  • Admissions/memberships (possibly including membership in the League of Minnesota Cities and other associations)
  • Travel agent services
  • Legal services
  • Accounting and bookkeeping services
  • Architectural and engineering services
  • Specialized design services
    • Interior decorating
    • Industrial design services
    • Graphic design services
  • Computer services
    • Custom computer programming
    • Computer systems design services
    • Computer facilities management services
    • Data processing
    • Hosting and related services
  • Management consulting services
    • Administrative management consulting services
    • Human resource consulting services
    • Marketing consulting services
    • Environmental consulting services
    • Scientific and technical consulting services
    • Scientific research and development services
  • Other consulting services
    • Environmental
    • Sanitation
    • Site remediation
    • Safety
    • Economic
    • Security
    • Other consulting services
  • Advertising and related services
    • Advertising agencies
    • Public relations agencies
    • Media buying agencies
    • Media representatives
    • Display advertising
    • Advertising material distribution services
  • Office administrative services
  • Facility support services
    • Snow plowing
    • Cleaning
  • Employment services
    • Temporary help agencies
    • Employment placement agencies
    • Executive search agencies
    • Professional employer organizations
  • Business support services
    • Telephone answering services
    • Collection agencies
    • Telemarketing services on contract
    • Secretarial and court reporting services
    • Document preparation services
    • Private mail centers
    • Credit bureaus
    • Repossession services
  • Other support services
    • Packaging and labeling services
    • Convention and trade show organization
  • Other miscellaneous professional and technical services
    • Marketing research
    • Public opinion polling
    • Photographic services
    • Commercial photography
    • Translation and interpretation services

    Read the current issue of the Cities Bulletin

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