1.1 	A bill for an act
1.2 	relating to taxation; repealing the sales tax exemption for clothing; adjusting the 
1.3 	sales tax rate; creating an income tax credit;amending Minnesota Statutes 2012, 
1.4 	section 297A.62, subdivision 1; proposing coding for new law in Minnesota 
1.5 	Statutes, chapter 290; repealing Minnesota Statutes 2012, section 297A.67, 
1.6 	subdivision 8.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. [290.0683] CLOTHING SALES TAX CREDIT.
1.9 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
1.10 	have the meanings given.
1.11 	(b) "Income" has the meaning given in section 290.067, subdivision 2a.
1.12 	(c) "Dependent" has the meaning given in section 152 of the Internal Revenue Code.
1.13 		Subd. 2.Credit allowed. A taxpayer is allowed a refundable credit against the tax 
1.14 	imposed under this chapter. The credit is equal to $....... for a married couple filing a joint 
1.15 	return, and $....... for all filers, plus $....... for the first dependent claimed on the return, 
1.16 	$....... for each of the second and third dependents claimed on the return, $....... for the 
1.17 	fourth dependent claimed on the return, and $....... for each subsequent dependent.
1.18 		Subd. 3.Limitations. The credit allowed in this section is reduced by $....... for 
1.19 	every $....... of income in excess of ....... percent of the federal poverty guidelines.
1.20 		Subd. 4.Appropriation. An amount sufficient to pay the refunds required by this 
1.21 	section is appropriated to the commissioner from the general fund.

1.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
1.23 	December 31, 2012.

1.24 	Sec. 2. Minnesota Statutes 2012, section 297A.62, subdivision 1, is amended to read:
2.1 		Subdivision 1.Generally. Except as otherwise provided in subdivision 3 or in this 
2.2 	chapter, a sales tax of ~~6.5~~ ....... percent is imposed on the gross receipts from retail sales as 
2.3 	defined in section 297A.61, subdivision 4, made in this state or to a destination in this 
2.4 	state by a person who is required to have or voluntarily obtains a permit under section 
2.5 	297A.83, subdivision 1.

2.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.7 	December 31, 2012.

2.8 	Sec. 3.  REPEALER.
 2.9 	Minnesota Statutes 2012, section 297A.67, subdivision 8, is repealed.

2.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.11 	December 31, 2012.