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Proposed memorabilia tax's impact on Target Corp. may doom the tax

Posted by: Jim Ragsdale under Gov. Mark Dayton, Minnesota legislature, Democrats, Republicans Updated: May 14, 2013 - 12:47 PM

A proposed wholesale tax on sports memorabilia, proposed to help the state pay its share of a new Vikings stadium, may have an unintended effect on the state's largest retailer.

The Target Corp. warehouses sports memorabilia in the state of Minnesota before sending the products out to stores, and thus the provision could end up taxing products sold in other states, said Senate DFL leaders. That was not the intention of the tax, they said.

"Evidently, Target brings all the memorabilia they sell in the country into the Minnesota warehouse, and then redistributes it," said Sen. Rod Skoe, DFL-Clearbrook, chairman of the Senate Taxes Committee.

"If as has been proposed, we use that tax instituted at the wholesale level on memorabilia, to help cover some of the costs of some of the stadium, it would really be a negative to one of our largest retailers."

He said the impact on Target may cause legislators to reject the memorabilia tax. "It would appear that would be a reason to perhaps not consider that as a stadium issue," he said.

As to other possible sources, he mentioned the possibility of using sales tax revenue, either existing or new taxes.

"We really don't want to be a negative impact to Target's ability to market memorabilia, so we're going to figure out what the impacts are," Skoe said.

The state's $348 million share of the new Vikings stadium was originally to be funded by revenue from new electronic gaming in bars, known as e-pulltabs. The rollout of those games has been slow, and revenue far under estimates, and Gov. Mark Dayton and legislative leaders say they want another source identified in the current budget to cover the state's contribution.

"All of this money, whether it's e-pulltabs, bingo-linked, or the memorabilia tax, all are potentially going into the general fund," Skoe said. He said whether legislators designate those funds as set aside for the stadium or not "really doesn't matter much to me."

Officials of Target Corp. could not be immediately reached for comment.

 

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