Earlier this month, the Minnesota legislature passed two competing budget bills, of which the House version included a tax on digital goods similar to a bill introduced earlier this year.

However, Democrats in the House and Senate have reached a $1 billion alternative budget agreement today, which rightfully excludes a digital tax.  The reason is likely due to a strong veto threat of all tax increases from Gov. Tim Pawlenty (R) and a letter from the Governor thatspecifically denounces taxing digital goods.

The Governor's intent on vetoing any tax increase, coupled with an exclusion of the digital goods provision in the latest tax hikepackage, is a good sign that the digital goods tax is dead in the North Star State.

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