Government tax exemption a good change [UPDATED]Published 10:43am Thursday, December 19, 2013 Updated 12:43pm Thursday, December 19, 2013
It seems odd that local government purchases, funded by taxpayer dollars, are still subject to the state’s 6.875 percent sales tax. That’s coming to an end with the arrival of 2014, and it’s a change that seems to just make sense.
The local government sales tax keeps state and local governments too financially intertwined.
The state shouldn’t collect on major city purchases or suffer unexpectedly if local governments have low-budget years. State dollars should come directly and predictably through state taxpayers.
Not all purchases will be tax-free, but it is estimated that Fergus Falls will save about $173,500 in 2014 because of the change. While the city is “saving,” it’s important to keep in mind that Minnesota residents will still have to pay the bills in one way or another.
The state’s need for funding isn’t going to go away, and the slack will need to be picked up somewhere.
It’s still unclear what this will mean for Fergus Falls, Otter Tail County or Minnesota in the long run, but it seems like a pretty logical change for now.