Love is in the air, but will consumers show it to retailers on Valentine's Day?

According to research by IBISWorld, traditional Valentine's Day gifts such as candy and flowers will lead a 3.2 percent increase in holiday-related sales this year. In addition, Valentine's traveling, jewelry, and dining out will also beat last year's numbers.

The report says average consumer spending for Valentine's gifts will be $134.08, up slightly from last year's $133.99.

Based on Valentine's Day falling on a Thursday, the forecast for flower sales are especially strong. However, citing flat consumer confidence and higher payroll taxes, spending on bigger ticket items may be flat or lower.

Greeting cards, clothing, and lingerie are anticipated to see the least amount of growth in sales this Valentine's Day holiday.

Click here to read the IBISWorld summary of 2013 Valentines forecast (pdf).

This past Tuesday, Minnesota Governor Mark Dayton released his comprehensive budget proposal. Changes to the sales tax system that would deeply impact Minnesota retailers are a cornerstone of the Governor's budget. 
 
MnRA's has been on record thanking the Governor for the inclusion of E-Fairness in his proposal, as well as endorsing the concept of lowering Minnesota's sales tax rate, but is concerned about several other sales tax provisions that would have a negative impact on retailers, including expanding the sales tax to clothing items selling for $100 or more and taxes on retail services.

Confused on what would be taxed, what would be exempt, and other sales tax reductions?

Click below to see explanations of each as released Thursday by Minnesota's Management and Budget Office.
 
EXPANDED: Click here to see sales taxes expanded under Dayton's plan.
 
EXEMPTED: Click here to see sales tax exemptions under Dayton's plan.
 
REDUCED: Click here to see sales tax reductions under Dayton's plan.
 
If you have any questions please contact MnRA's Government Relations Director, Rochelle Westlund, at This email address is being protected from spambots. You need JavaScript enabled to view it..

Minnesota Senator Ann Rest held hearings in her Tax Reform Subcommittee this week on a variety of tax-related bills she introduced, including a MnRA-supported measure to address E-Fairness, and a MnRA-opposed clothing sales tax exemption repeal. Sen. Rest also introduced a digital goods tax bill.

E-Fairness

MnRA's Rochelle Westlund lead the Mainstreet Fairness Coalition in testifying in support of Rest's E-Fairness bill, S.F. 8.  A special thank you to MnRA Board member Roberta Bonoff, owner of Creative Kidstuff, and Michael Weinhagen, owner of Weinhagen Tire Company, for sharing their stories with the Subcommittee to illustrate how this bill would help level the playing field for retailers.
 
Other organizations testifying in support of E-Fairness were the League of Minnesota Cities, the Association of Minnesota Counties, the Metro Independent Business Alliance, the Minnesota Business Partnership, and the Minnesota Chamber of Commerce.
 
With widespread bipartisan support, in addition to support from the Governor's office, we are hopeful that E-Fairness will have a path to passage.

Click here to see summary of E-Fairness testimony from KARE-11.
Click here to watch an archive of the full hearing. 

Clothing Sales Tax 

Relative to the measures to expand sales tax to clothing (S.F. 9/S.F. 11), MnRA along with the Mall of America testified in opposition to these bills due to the potential impact they could have on retailers.
 
In today's turbulent economy, extending Minnesota sales tax to clothing would take disposable income out of the hands of consumers. The resulting reduction in spending would impact businesses bottom line, and hinder retailers' ability to maintain and create jobs. With one in four Minnesota jobs depending on retail, it is important Minnesota makes public policy that encourages growth.
 
We look forward to leading these conversations as tax reform is further considered at the State Capitol  If you have any questions please contact MnRA's Government Relations Director, Rochelle Westlund, at This email address is being protected from spambots. You need JavaScript enabled to view it..