Massage therapists could trade sales tax for provider tax

Mary Jo Majerus spent the first decade of her career educating citizens on the benefits of massage therapy. Now she’s looking to simplify the industry’s taxes.

Majerus testified in support of HF884 Wednesday, a bill sponsored by Tina Liebling (DFL-Rochester) that would allow massage therapists to register for the 2 percent MinnesotaCare health provider tax and exempt them from the 6.875 percent sales tax.

The bill was held over by the House Taxes Committee for possible omnibus inclusion. A companion, SF1576, sponsored by Sen. Chris Eaton (DFL-Brooklyn Center), awaits action by the Senate Taxes Committee.

Massage therapists like Majerus have been subject to sales tax since 1987.

“That year there was a fairly large budget crisis and to help address it a number of services were added to the sales tax law,” Majerus said.

In addition to massage therapy, services such as laundry and dry cleaning, car washing and detailing, building cleaning and maintenance, pest control and pet grooming were added that year.

Under current law, massages performed or referred by a licensed health care provider to treat illness, injury or disease are exempt from sales tax but are subject to the provider tax. Any other massage therapy services are subject to the sales tax.

Liebling said massage therapists who provide both types of services, and are subject to both taxes, would benefit from the simplified bill.

“It simplifies accounting and compliance issues for the therapist,” said Pat Dalton, a researcher with the nonpartisan House Research Department. “If they choose to register to pay the provider tax, they will only be collecting 2 percent of everything and they don’t have to keep separate books. … If they choose not to register they can continue to charge the tax the way they do now.”

The MinnesotaCare health care provider tax is scheduled to sunset Dec. 31, 2019.