The Minnesota Retailers Association is making a last-ditch push to head off the proposed sports memorabilia tax, pitched in part to help pay for the Minnesota Vikings new stadium.
The tax was part of the original stadium financing plan, but fell out of the deal in the final days of last year's legislative session -- in part due to opposition by other teams (like the Wild, the Twins, the Timberwolves and the Lynx) that didn't want to help pay for a new NFL stadium.
Now the tax is back, as electronic gambling falters. Electronic pulltabs are falling far short of projections, and linked bingo has yet to get off the ground. As a backup, the House has a 10 percent wholesale version, on merchandise licensed by professional sports leagues, teams and other affiliates. The Senate has the wholesale tax at 13 percent, and includes NCAA Division I programs. The tax for now specifically includes clothing, as well as trading cards, photographs, sports equipment, and souvenirs.
Supporters say the tax is a way to financially link sports fans with the stadium they'll presumably enjoy -- even if they're only watching the Vikings play in it on TV. "It's asking the users and the sports enthusiasts to contribute, and I think the chance of that passing is very high," says House tax committee chair Ann Lenczewski (DFL-Bloomington).
The folks that make a living selling the stuff don't quite see it that way. Minnesota Retailers Association president Bruce Nustad said the tax could have all kinds of unintended consequences, like dinging youth sports teams that use pro-branded pucks, bats, hats and other equipment. They also say that the added cost will drive consumers to the Internet, and that it will hurt Minnesota's chances to compete financially for big events like Super Bowls and Final Fours.
Nustad also cautioned that the tax is a lot easier passed than collected. He said there are myriad things out there that are licensed, from baby bibs to software, that have licensing arrangements with sports teams or leagues. He argued it'll be difficult for Minnesota to apply the tax fairly.
"It's hard to verify what sports memorabilia really takes in, from, like I said, from a pacifier with a logo on it, to a video game holding the NFL logo," Nustad said.
Rep. Kurt Zellers (R- Maple Grove) says he's troubled by who the tax will hit. He says the licensed apparel is popular with kids, and some of the merchandise named in the bill would hit kids particularly hard.
"One of our staff guys did some research, and found out that of baseball cards that are sold, 40 percent are bought by kids ages 6 to 14. And they buy it with their own money. So, either lawn mowing money, their allowance, they've shoveled some snow, they've walked the dog. But kids who buy baseball cards are going to pay this new tax. I get charging an adult, someone who buys a $150 football jersey, at least its a little but more understandable. But taxing kids for baseball cards and that horrible gum that's in there? I don't think that's fair."
Here's the flyer that the Minnesota Retailers Association was passing at the Capitol yesterday.