Minnesota House Bill HF2705

Minnesota 2025-2026 Regular Session

• Introduced: 3/24/25
• Refer: 3/24/25

Caption

Clothing exemption modified to include only clothing $150 or less per item.

Summary

HF2705 amends Minnesota’s sales and use tax clothing exemption by limiting the exemption to clothing items with a sales price of $150 or less per item. The bill keeps the general definition of “clothing” as human wearing apparel suitable for general use, and it retains the existing lists of items that are included in or excluded from that definition. In practical terms, the measure would make higher-priced clothing taxable while preserving the exemption for lower-priced apparel and most ordinary clothing items. The bill also specifies that the change applies prospectively to sales and purchases made after September 30, 2025. That means retailers would need to apply the sales tax to qualifying clothing purchases above the new threshold beginning on that date, and consumers buying higher-priced apparel would no longer receive the exemption. The statutory change is limited to Minnesota Statutes section 297A.67, subdivision 8, which governs the clothing exemption under the state sales tax code.

Impact

HF2705 would narrow Minnesota’s existing sales tax exemption for clothing by adding a per-item price cap of $150. This would increase taxable sales for apparel above that amount and could affect retailers, consumers, and state sales tax collections. The bill does not alter the broader structure of the sales and use tax law, but it changes the scope of a long-standing exemption in section 297A.67, subdivision 8, and preserves the detailed statutory definitions distinguishing clothing from accessories, equipment, protective gear, and other nonexempt items.

Sentiment

Based on the available context, the bill appears to be a straightforward tax policy change with no recorded committee debate or vote history in the provided materials. The caption and text suggest a technical but meaningful narrowing of an exemption rather than a broader policy overhaul. Because there are no transcripts or votes included, there is no documented evidence here of support or opposition, though the measure’s effect on consumer costs and tax revenue would likely be the main focus of any discussion.

Contention

The main point of contention is likely the new $150 per-item threshold itself: supporters may view it as a way to limit the exemption to more basic apparel and broaden the tax base, while opponents may argue it raises costs for consumers buying higher-priced clothing and creates a less uniform tax treatment for apparel. Another likely issue is administrative complexity for retailers, who would need to distinguish taxable and exempt clothing purchases based on item price. No specific disagreements are documented in the provided committee materials, so these are inferred policy tensions rather than recorded objections.