The Governor’s 21st Century Tax Reform Commission released its recommendations for tax reform Friday. The Commission, a 15-member panel appointed by Gov. Tim Pawlenty, recommended an overhaul of Minnesota’s tax system starting with repealing the corporate income tax and expanding the sales tax to include clothing and services.

“Minnesota’s Millennium: Launching a New Generation of Competitive Leadership and Economic Growth” focuses on reducing the volatility in the system, decreases business tax burdens to increase the state’s competitiveness, improves transparency of taxation, and encourages investments in small and emerging businesses. To help offset the costs of some of these proposals, the Commission suggests increasing the cigarette tax by $1, which would also benefit the public health by reducing the number of smokers. Gov. Pawlenty has stated his disapproval of raising sales taxes but did express his support for reducing taxes on business. It remains to be seen which recommendations he will adopt and which ones the legislature will pursue.

If you would like to read more about the commission’s recommendation, go to

You can read the report in its entirety on the Tax Reform Commission Web site at