1.1 	A bill for an act
1.2 	relating to taxation; repealing the sales tax exemption for clothing; adjusting 
1.3 	the sales tax rate; creating a clothing sales tax credit; appropriating money;
1.4 	amending Minnesota Statutes 2010, sections 116.92, subdivision 8; 297A.62, 
1.5 	subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 290; 
1.6 	repealing Minnesota Statutes 2010, sections 297A.61, subdivision 46; 297A.67, 
1.7 	subdivision 8.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2010, section 116.92, subdivision 8, is amended to read:
1.10 		Subd. 8.Ban; toys, games, and apparel. A person may not sell for resale or at 
1.11 	retail in this state a toy or game that contains mercury, or an item of clothing or wearing 
1.12 	apparel that is exempt from sales tax under section 297A.67, subdivision 8, that contains 
1.13 	an electric switch that contains mercury. 

1.14 	Sec. 2. [290.0683] CLOTHING SALES TAX CREDIT.
1.15 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms 
1.16 	have the meanings given.
1.17 	(b) "Income" has the meaning given in section 290.067, subdivision 2a.
1.18 	(c) "Dependent" has the meaning given in section 152 of the Internal Revenue Code.
1.19 		Subd. 2.Credit allowed. A taxpayer is allowed a refundable credit against the tax 
1.20 	imposed under this chapter. The credit is equal to $60 for a married couple filing a joint 
1.21 	return, and $30 for all filers, plus $30 for the first dependent claimed on the return, $15 
1.22 	for each of the second and third dependents claimed on the return, $10 for the fourth 
1.23 	dependent claimed on the return, and $5 for each subsequent dependent.
2.1 		Subd. 3.Limitations. The credit allowed in this section is reduced by $10 for every 
2.2 	$1,000 of income in excess of 200 percent of the federal poverty guidelines.
2.3 		Subd. 4.Appropriation. An amount sufficient to pay the refunds required by this 
2.4 	section is appropriated to the commissioner from the general fund.

2.5 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.6 	December 31, 2011.

2.7 	Sec. 3. Minnesota Statutes 2010, section 297A.62, subdivision 1, is amended to read:
2.8 		Subdivision 1.Generally. Except as otherwise provided in subdivision 3 or in this 
2.9 	chapter, a sales tax of 6.5 ... percent is imposed on the gross receipts from retail sales as 
2.10 	defined in section 297A.61, subdivision 4, made in this state or to a destination in this 
2.11 	state by a person who is required to have or voluntarily obtains a permit under section 
2.12 	297A.83, subdivision 1.

2.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.14 	December 31, 2011.

2.15 	Sec. 4.  REPEALER.
 2.16 	Minnesota Statutes 2010, sections 297A.61, subdivision 46; and 297A.67, 
2.17 	subdivision 8, are repealed.

2.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after 
2.19 	December 31, 2011.