Taxing Services: Which Ones?

Although the League has not yet seen a bill on the governor’s sales tax proposal, more details on the intent of the plan have begun to emerge.
(Published Feb 1, 2013)

Late this week, the Minnesota Department of Revenue 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. Due to the fact that cities are subject to the sales tax, 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 in the state. Keep in mind that the governor's sales tax plan includes a decrease in the general sales tax rate from 6.875% to 5.5% 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 at gcarlson@lmc.org or Rachel Walker at rwalker@lmc.org

Examples of Services covered by sales tax under 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

Questions? Contact Gary Carlson at (651) 2981-1255 or gcarlson@lmc.org

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