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Legislature > House of Representatives > House Research > Sales Taxes

Local General Sales Taxes Authorized by Special Legislation

Taxes Currently Imposed

Albert Lea

Initially authorized Laws 2005, 1st spec. sess., ch. 3, art. 5, sec. 38
Date imposed April 1, 2006
Amount collected in CY 2014 $1,435,808
Additional legislative action Laws 2006, ch. 259, art. 3, sec. 6; Laws 2014, ch. 308, art. 3, sec. 23
Tax authorized A sales and use tax of one-half of 1 percent
Required city action to impose the taxThe tax had to be approved by the majority of the city voters at the 2005 general election
Allowed use of the tax proceedsLake improvement projects included in the Shell Rock River Watershed plan. The 2006 law clarified that the city was to transfer the funds to the watershed board and did not have approval over the expenditures.
Tax administrationThe tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expirationThe tax expires at the earlier of (1) ten years, or (2) when $15 million has been raised for the authorized project. The 2014 law extended the ten years to 15 years.

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Austin

Initially authorized Laws 2006, ch. 259, art. 3, sec. 9
Date imposed April 1, 2007
Amount collected in CY 2014 $1,870,654
Tax authorized A sales and use tax of one-half of 1 percent
Required city action to impose the tax The tax had to be approved by the majority of the city voters at a general or special election held by January 1, 2007.
Allowed use of the tax proceeds Flood mitigation projects
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires at the earlier of (1) 20 years, or (2) when the amount raised is sufficient to fund the $14 million in bonds authorized to fund the indicated projects.

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Baxter

Initially authorized Laws 2006, ch. 259, art. 3, sec. 10
Date imposed October 1, 2006
Amount collected in CY 2014 $2,148,376
Additional legislative action Laws 2014, ch. 308, art. 3, sec. 25-27
Tax authorized A sales and use tax of one-half of 1 percent; also a $20 per vehicle excise tax on motor vehicles sold by licensed dealers in the city.
Required city action to impose the tax The tax was approved by the majority of the city voters at the November 2, 2004, general election, prior to the authorizing legislation. The extension authorized in the 2014 law was approved by the voters at the November 4, 2014, general election.
Allowed use of the tax proceeds Joint water and wastewater treatment facilities with the city of Brainerd. Also construction and equipping of a fire substation. Under the 2014 law, the city may fund an additional $32 million in sewer, water, and transportation improvements and an additional $8 million in improvements to the Brainerd Lakes area airport.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration Originally the tax was to expire at the earlier of (1) 12 years, or (2) when the amount raised was sufficient to fund the $15 million in bonds authorized to fund the indicated projects. Now it will expire at the earlier of (1) when the amount raised is sufficient to fund the additional $40 million in authorized bonds, or (2) December 31, 2037.

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Bemidji

Initially authorized Laws 2005, 1st spec. sess., ch. 3, art. 5, sec. 39
Date imposed January 1, 2006
Amount collected in CY 2014 $2,076,148
Tax authorized A sales and use tax of one-half of 1 percent
Required city action to impose the tax The majority of city voters approved the tax at the November 5, 2002, general election, before the tax was authorized.
Allowed use of the tax proceeds Park and trail improvements as outlined in the city's parks, open space, and trail system plan, as adopted by the city council November 21, 2001.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires when the amount raised is sufficient to fund the $9.826 million in bonds authorized to fund the indicated projects.

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Brainerd

Initially authorized Laws 2006, ch. 259, art. 3, sec. 11
Date imposed April 1, 2007
Amount collected in CY 2014 $819,782
Additional legislative action Laws 2014, ch. 308, art. 3, sec. 28-30
Tax authorized A sales and use tax of one-half of 1 percent; also a $20 per vehicle excise tax on motor vehicles sold by licensed dealers in the city.
Required city action to impose the tax The tax was approved by the majority of the city voters at the 2006 general election. The extension authorized in the 2014 law was approved by the voters at the November 4, 2014, general election.
Allowed use of the tax proceeds Joint water and wastewater treatment facilities with the city of Baxter. Also water infrastructure improvements and trail projects approved as part of the authorizing referendum. The 2014 law allows the city to raise and spend an additional $15 million above the $22.03 million in bonds for these purposes.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration Originally the tax was to expire at the earlier of (1) 12 years, or (2) when the amount raised was sufficient to fund the $22.03 million in bonds authorized to fund the indicated projects. Now it will expire at the earlier of (1) when an additional $15 million over the amount needed to fund the existing bonds is raised, or (2) December 31, 2037.

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Central Minnesota cities (St. Cloud, St. Augusta, Sartell, Sauk Rapids, St. Joseph, and Waite Park)

Initially authorized Laws 2002, ch. 377, art. 11, sec. 2; Laws 2005, 1st spec. sess., ch. 3, art. 5, sec.sec. 35, 36, and 37
Cities granted the authority to impose tax St. Cloud, St. Augusta, St. Joseph, Sartell, Sauk Rapids, and Waite Park. The cities of St. Joseph and Waite Park voted not to impose the 2002 tax. The 2005 law allowed Waite Park and St. Joseph to impose the tax based on a successful 2004 referendum.
Date imposed January 1, 2003
Amount collected in CY 2014 $9,686,975
Additional legislative action Laws 2013, ch. 143, art. 8, secs. 47 and 48
Tax authorized A sales tax of one-half of 1 percent. A complementary use tax was also authorized.
Required city action to impose the tax Sartell and St. Cloud imposed it with city council approval because of passage of an earlier referenda. St. Augusta and Sauk Rapids received voter approval at the November 2002 general election. St. Joseph and Waite Park received voter approval at the November 2004 general election.
Allowed use of the tax proceeds The revenues first went to pay for airport improvements. Any revenue above the amount needed for the airport was to be distributed to the cities under a joint powers agreement to fund various voter approved projects such as parks, community centers, and roads. Laws 2005, 1st special session, chapter 3, article 5, section 37, replaced the old tax and required all cities participating in the new tax to contribute to the regional library located in St. Cloud as well as to the regional airport. Any money collected above the amount needed for those projects go to the other voter-approved projects. The 2013 law clarified that any project funded from the tax had to be a regional project.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The original tax would have expired March 31, 2007. The new authority expires when funds are sufficient to pay authorized bonds for the projects, but no later than December 31, 2018, unless extended under the 2013 law.
Miscellaneous The tax was originally set to expire December 31, 2005, but the termination date was changed to March 31, 2007. This was to allow the tax to be continuous rather than blinking off and then on if the authorized cities enacted the new tax authorized during the 2005 special session. The 2013 law allows a participating city to extend the tax through December 31, 2038, if approved at a general or special election held by November 7, 2017.

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Clearwater

Initially authorized Laws 2008, ch. 366, art. 7, sec. 19
Date imposed October 1, 2008
Additional legislative action Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 8; Laws 2013, ch. 143, art. 8, sect. 49
Amount collected in CY 2014 $203,128
Tax authorized A sales and use tax of one-half of 1 percent and an excise tax of up to $20 per motor vehicle purchased or acquired from any person engaged in the business of selling motor vehicles at retail within the city.
Required city action to impose the tax The majority of voters approved the tax at the November 7, 2006 general election.
Allowed use of the tax proceeds The proceeds of the tax imposed under this section must be used to pay for the costs of acquisition, construction, improvement, and development of a pedestrian bridge, and land and buildings for a community and recreation center. The total amount of revenues from the taxes in subdivisions 1 and 2 that may be used to fund these projects is $12 million, plus any associated bond costs. The 2011 special session law expanded the allowed uses to include recreation projects included in the city's 2006 city improvement plan. The 2013 law enumerated the allowed projects from the 2006 plan because the plan had never been formally adopted.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The taxes terminate at the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the city council determines that sufficient funds have been raised from the tax to finance the approved projects. The taxes could be terminated earlier if the city determines so by ordinance.

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Cloquet

Initially authorized Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 10
Date imposed April 1, 2013
Amount collected in CY 2014 $1,062,906
Tax authorized A sales and use tax of one-half of 1 percent and an excise tax of up to $20 per motor vehicle purchased or acquired from any person engaged in the business of selling motor vehicles at retail within the city.
Required city action to impose the tax Approved by the majority of voters at the November 6, 2012, general election.
Allowed use of the tax proceeds The tax is to fund a number of park improvement projects and various infrastructure projects. The total revenue that may be raised is $16.5 million plus bond costs.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires at the earlier of (1) 30 years or (2) once any associated bonds or obligations were paid. The taxes can be terminated earlier if the city determines so by ordinance.

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Cook County

Initially authorized Laws 2008, ch. 366, art. 7, sec. 18
Date imposed April 1, 2010
Additional legislative action Laws 2009, ch. 88, art. 4, sec. 20
Tax authorized A sales and use tax of up to 1 percent.
Amount collected in CY 2014 $1,444,056
Required city action to impose the tax The majority of county voters approved the tax at 1 percent at the November 2, 2009, general election.
Allowed use of the tax proceeds Construction of a county community center and recreation area, including but not limited to a skateboard park, hockey rink, ball fields, tennis courts, and additional related improvements, including a parking area; and construction and improvements to the Grand Marais public library. In 2009, most of the individual recreation facilities were removed from the enumerated list and two new projects were added: (1) a countywide high-speed communication infrastructure, and (2) a district energy plant.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration Originally set to expire when revenues equaled $14 million plus associated bond costs. The 2009 law changed the $14 million to $20 million.

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Duluth

Initially authorized Laws 1973, ch. 461
Date imposed September 11, 1973
Amount collected in CY 2014 $14,274,808
Additional legislative action Laws 1977, ch. 438; Laws 1979, ch. 114, sec. 1; Laws 1980, ch. 511, sec.sec. 1, 4; Laws 2000, ch. 490, art. 8, sec. 21
Tax authorized A sales tax of 1 percent on motor vehicles subject to the motor vehicle sales tax as well as goods and services taxable under the general sales tax law. The tax on motor vehicles was phased out over four years under the 2000 law. A complementary use tax also was authorized. In 1977, food and beverages sold in restaurants were exempted from this tax and the city's restaurant tax was increased to 2 percent, but this change was rescinded in 1979.
Required city action to impose the tax The tax had to be approved by the majority of the city council before imposition.
Allowed use of the tax proceeds No allocation was specified for the sales and use taxes. The city council is required to approve distribution of revenue at least annually.
Tax administration Not discussed in the enabling legislation. Duluth originally administered and collected its own local sales tax. The city was exempted from the 1997 statutory requirement that the Department of Revenue collect and administer all local sales taxes beginning January 1, 2000. However, the Department of Revenue started to collect and administer the tax beginning January 1, 2006, as part of conformity with streamlined sales tax requirements.
Tax expiration The sales and use tax has no expiration date.
Miscellaneous The Duluth sales and use tax is unique compared to other local sales taxes in the state. It is the only local sales tax where the proceeds are not dedicated to special capital projects, but instead are part of the city general fund.

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Fergus Falls

Initially authorized Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 11
Date imposed January 1, 2012
Amount collected in CY 2014 $1,312,750
Tax authorized A sales and use tax of one-half of 1 percent.
Required city action to impose the tax The majority of voters approved the tax at the November 2, 2010 general election.
Allowed use of the tax proceeds The proceeds of the tax imposed must be used to pay for the costs of acquisition and betterment of a regional community ice arena facility, up to a maximum of $6.6 million.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax terminates when the city council determines that sufficient funds have been raised from the tax to finance the approved project. The tax can be terminated earlier if the city determines so by ordinance.

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Hennepin County

Initially authorized Laws 2006, ch. 257, secs. 2, 10-12
Date imposed January 1, 2007
Amount collected in CY 2014 $35,052,547
Tax authorized A sales tax of 0.15 of 1 percent
Required city action to impose the tax The tax required only approval of the county board.
Allowed use of the tax proceeds New baseball stadium and operating cost of the ballpark authority. If not needed for debt repayment, up to $4 million annually, adjusted for inflation, may be used to fund youth sports and increase operating hours in the Hennepin County and Minneapolis library systems.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration When the stadium bonds are defeased and a fund sufficient to pay other obligations is established.

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Hermantown

Initially authorized Laws 1996, ch. 471, art. 2, sec. 29
Date imposed April 1, 1997
Amount collected in CY 2014 $2,536,381
Additional legislative action Laws 2006, ch. 259, art. 3, secs. 3-4; Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 4
Tax authorized A sales tax of up to 1 percent. No complementary use tax was authorized. The city chose to impose the tax at the rate of one-half of 1 percent. The 2011 law allowed the city raise the tax to the originally authorized 1 percent, which it did beginning April 1, 2013.
Required city action to impose the tax The original tax at one-half of 1 percent was approved at the November 1996 general election. The increase to 1 percent was approved by the voters at the November 6, 2012, general election.
Allowed use of the tax proceeds The law allowed funding for various city improvements, specifically, extension of the sewer interceptor line; construction of a booster pump station, reservoirs, and related improvements to the water system; and construction of a police and fire station. The tax was amended in 2006 to include construction of an administrative services facility.
Tax administration The tax is collected by the Commissioner of Revenue with the state sales tax. The tax revenue are returned to the city on a quarterly basis, net the cost to the state of collecting and administering the tax.
Tax expiration Either ten years after date of tax imposition or once sufficient revenues are raised to pay for the improvements and related bonds under original law. Extended to March 31, 2026, under 2006 law.
Miscellaneous A complementary use tax was imposed in the city beginning January 1, 2000, as required under Minnesota Statutes sec. 297A.99.

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Hutchinson

Initially authorized Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 12
Date imposed January 1, 2012
Amount collected in CY 2014 $1,454,190
Tax authorized A sales and use tax of one-half of 1 percent and an excise tax of up to $20 per motor vehicle purchased or acquired from any person engaged in the business of selling motor vehicles at retail within the city.
Required city action to impose the tax The majority of voters approved the tax at the November 2, 2010 general election.
Allowed use of the tax proceeds The proceeds of the tax imposed under this section must be used to pay for the costs of construction of a water treatment facility renovating the city wastewater treatment facility.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The taxes terminate at the earlier of (1) 18 years after the date of initial imposition of the tax, or (2) when the city council determines that sufficient funds have been raised from the tax to finance the approved projects. The taxes could be terminated earlier if the city determines so by ordinance.
Miscellaneous The funded projects were already built. The revenues are used to pay off the associated bond.

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Lanesboro

Initially authorized Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 13
Date imposed January 1, 2012
Amount collected in CY 2014 $71,540
Tax authorized A sales and use tax of one-half of 1 percent
Required city action to impose the tax The majority of voters approved the tax at the November 2, 2010 general election.
Allowed use of the tax proceeds The proceeds of the tax imposed under this section must be used to pay for a number of road projects, improvement to the wastewater treatment facility and the dam in the city, and improvements to a number of city buildings. Total projects are limited to $800,000 plus bond costs.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax terminates when the city council determines that sufficient funds have been raised from the tax to finance the approved projects. The tax can be terminated earlier if the city determines so by ordinance.

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Mankato

Initially authorized Laws 1991, ch. 291, art. 8, sec. 27; Laws 2008, ch. 366, art. 7, secs. 15, 16
Date imposed Laws 1991, ch. 291, art. 8, sec. 27 was imposed on April 1, 1992; Laws 2008, ch. 366, art. 7, secs. 15, 16 was imposed on April 1, 2009
Amount collected in CY 2014 $5,200,056
Additional legislative action Laws 1996, ch. 471, art. 2, sec. 25; Laws 1998, ch. 389, art. 8, sec. 28; Laws 2005, 1st spec. sess., ch. 3, art. 5, secs. 24, 25; Laws 2008, ch. 366, art. 7, secs. 9, 10, 15, 16, 22; Laws 2009, ch. 88, art. 4, secs. 14 and 21
Tax authorized

Sales tax of up to one-half of 1 percent. No complementary use tax was imposed. The law also authorized a flat tax of up to $20 per motor vehicle purchased within the city from anyone engaged in the retail sale of motor vehicles.

The 2008 law authorizes a food and beverage sales tax of up to 1 percent on the gross receipts on: all sales of food and beverages by a restaurant or place of refreshment and admissions to an entertainment event located within the city.

Required city action to impose the tax

The law allowed for a reverse referendum to stop imposition of the tax. The city council was required to publish notices and hold hearings on the intent to impose the tax. A petition signed by 10 percent of the voters from the last general election asking for a vote on the issue would invoke the reverse referendum. The vote had to be held on the issue at a general or special election by December 1, 1991. The reverse referendum was not invoked.

The 2008 law allowed for a reverse referendum (following the same procedures listed above) to stop the city council from extending the local sales tax and modifying the use of revenues from the tax. The taxes under consideration were authorized. The reverse referendum was not invoked.

Allowed use of the tax proceeds

The tax funded bond issues not to exceed $25 million in support of the Riverfront 2000 downtown urban revitalization project, which included a convention center, arena, and a riverside park. The 1996 amendment allowed the tax revenue to also pay for expansion and operation of the Mankato municipal airport, with related bond issues not to exceed $4.5 million. The 1998 law expanded the definition of Riverfront 2000 to include a technology center. In 2005, the law was amended to state that the city could spend $1.5 million annually for operations as well as the $29.5 million for capital costs for the Riverfront 2000 facility.

The 2008 law removed the provision allowing these revenues to be used for operating expenses and added construction of a performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center (attached to the Mankato Civic Center for use by the Minnesota State University, Mankato) as component facilities of the Riverfront 2000 project. The requirement that the new projects had to be attached to the civic center was eliminated in 2009.

Revenues from the food and beverage and entertainment taxes authorized in 2008 will be used to pay all or a portion of the expenses of operating and maintaining Riverfront 2000 and its related facilities.

Tax administration

The tax is collected by the Commissioner of Revenue with the state sales tax. The tax revenue are returned to the city on a quarterly basis, net the cost to the state of collecting and administering the tax.

The city may also choose to have the food and beverage and entertainment taxes authorized in 2008 to be administered, collected, and enforced by the Commissioner of Revenue, with the commissioner's consent.

Tax expiration The tax expires after sufficient revenues are raised to pay the combined $29.5 million for the revitalization project and the airport, or earlier by ordinance. In 2005 this was amended to extend the tax to December 31, 2015, or December 31, 2018 to allow the city to repay the bonds and use some of the revenue for ongoing operations. In 2008, it was amended to an unconditional date of December 31, 2022.
Miscellaneous A complementary use tax was imposed in Mankato beginning January 1, 2000, as required under Minnesota Statutes sec. 297A.99.

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Marshall

Initially authorized Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 14
Date imposed April 1, 2013
Amount collected in CY 2014 $1,426,252
Tax authorized A sales and use tax of one-half of 1 percent; the 2013 law allows the city to add an additional quarter of 1 percent to fund the destination medical center infrastructure (currently this is not imposed)
Required city action to impose the tax Approved by the voters at the November 6, 2012, general election.
Allowed use of the tax proceeds The tax is to fund construction costs of new and existing facilities of a regional amateur sports center and a regional emergency response and industry training center. The total revenue that may be raised is $17.29 million plus bond costs.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires at the earlier of (1) 15 years or (2) once any associated bonds or obligations are paid. The taxes can be terminated earlier if the city determines so by ordinance.

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Medford

Initially authorized Laws 2011, 1st spec. sess., ch. 7, art. 4, sec. 15
Date imposed April 1, 2013
Amount collected in CY 2014 $130,260
Tax authorized A sales and use tax of one-half of 1 percent
Required city action to impose the tax Approved by the voters at the November 6, 2012.
Allowed use of the tax proceeds The tax is to be used to repay up to $4.2 million in Minnesota Public Facilities Authority loans for improvements to the city water and wastewater treatment systems.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax will expire at the earlier of (1) 20 years or (2) once the loans are repaid. The taxes can be terminated earlier if the city determines so by ordinance.

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Minneapolis

Initially authorized Laws 1986, ch. 396
Date imposed February 1, 1987
Amount collected in CY 2014 $35,091,142
Additional legislative action Laws 1992, ch. 511, art. 8, sec. 34, subd. 4; Laws 1998, ch. 404, secs. 71, 84; Laws 2009, ch. 88, art. 4, secs. 11-12; Laws 2012, ch. 299, art. 3, sec. 1 (codified as Minn. Stat. sec. 297A.994), 2, and 4
Tax authorized A sales tax of up to one-half of 1 percent on sales except for gross receipts of liquor sales exempt under Minnesota Statutes 297A. A complementary use tax also was authorized. The tax may be adjusted periodically by the city council so long as the rate, rounded to the next highest one-tenth of 1 percent, does not exceed the rate required to produce revenue sufficient to cover the allowed uses of the tax.
Required city action to impose the tax The tax required approval of the city's board of estimate and taxation by a vote of at least five members. The city was also required to impose the concurrently authorized restaurant and lodging taxes listed in miscellaneous in order to impose the sales and use tax. The 2012 law required a simple majority approval by the city council and for the city to file its approval with the change with the secretary of state by June 14, 2012. The approval was filed June 4, 2012. The law also overrode the city charter requirement for a referendum to expend more than $10 million on a stadium.
Allowed use of the tax proceeds The tax allows for up to $118 million to fund development, construction, maintenance, improvement, and promotion of the convention center and related facilities, including housing replacement costs. The 1992 law allows the city to appropriate revenue from the sales and use taxes for funding of neighborhood early learning centers.

The 1998 legislation removed the $118 million limit on the amount of public funds used to fund construction and improvement of the convention center and also modified the allowed uses of the local sales tax revenues to include the expansion of the convention center.

The 2009 law allowed the city to divert revenues from the tax in excess of the amount needed to support the convention center. For CY 2009 and 2010, an amount up to the amount of aid loss the city related to the 2008-2010 governor's unallotments or legislative reductions, may be used to fund general city services. Beginning in 2011, excess revenues may be used to fund capital projects anywhere in the city to promote residential, commercial, cultural, and economic development.

The 2012 law provided that for the time period of January 1, 2021, through December 31, 2046, a portion of the sales tax revenue shall be retained by the state and used to reimburse the state for payments made by the state on the city’s behalf to fund the new professional football stadium. The withheld amount will be used to offset the following stadium related costs:

  • the city’s share of $150 million in construction costs
  • $6 million per year, adjusted annually for tax revenue growth, for stadium operation costs for the years 2016 to 2046
  • $1.5 million per year, adjusted annually for tax revenue growth, for payments from 2016 to 2046 into a capital reserve fund
  • additional revenue each year to the Minnesota Sport Facilities Authority, if the growth in the local sales tax revenues exceeded a certain calculated amount

The city may also use any additional revenue not needed for the currently authorized uses to support the basketball arena, other capital projects, or other economic development.

Tax administration The Commissioner of Revenue may enter into agreement with the city to collect these taxes, and charge a reasonable fee for that collection. The Department of Revenue administers and collects this tax.
Tax expiration It was originally required to expire when all convention center bonds were paid off. Under the 2012 law, the tax may not terminate before January 1, 2047.

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New Ulm

Initially authorized Laws 1999, ch. 243, art. 4, sec. 17
Date imposed April 1, 2001
Amount collected in CY 2014 $1,355,288
Additional legislative action None
Tax authorized A sales tax of up to one-half of 1 percent. A complementary use tax is authorized, as well as a flat tax of up to $20 per motor vehicle purchased within the city from anyone engaged in the retail sale of motor vehicles.
Required city action to impose the tax The tax needed to be approved by city voters in the 1999 general election.
Allowed use of the tax proceeds The tax funds a civic and community center and recreational facilities for both youth and seniors. Capital expenditures for the project are not to exceed $9 million.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax will expire after sufficient revenues are raised to pay for the centers and up to $9 million in authorized bonds.
Miscellaneous The enabling legislation requires that the referendum on the related bonds state that although the sales tax revenues are pledged to pay the bonds, the bonds were still general obligation bonds, guaranteed by the city's property taxes.

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North Mankato

Initially authorized Laws 2008, ch. 366, art. 7, sec. 20
Date imposed October 1, 2008
Amount collected in CY 2014 $617,090
Tax authorized A sales and use tax of one-half of 1 percent
Required city action to impose the tax The majority of voters approved the tax at the November 7, 2006 general election.
Allowed use of the tax proceeds The law allows up to $6 million to be raised to pay all or part of the capital costs of the Trunk Highway 14/County State-Aid Highway 41 interchange project, development of regional parks and hiking and biking trails, expansion to the North Mankato Taylor Library, riverfront redevelopment, and lake improvement projects.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires when the city council determines that the amount raised equals or exceeds $6 million. The tax may expire at an earlier time if the city so determines by ordinance.

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Olmsted County

Initially authorized Laws 2013, ch. 143, art. 10, sec. 9 (codified as Minn. Stat. sec. 469.46)
Date imposed January 1, 2014
Tax authorized One-quarter of 1 percent
Required city action to impose the tax County board approval only, no voter referendum required.
Allowed use of the tax proceeds To fund the county’s match for Rochester to receive state transit aid to fund the transportation infrastructure related to the Destination Medical Center (DMC) project. The county's match is roughly $33 million over the duration of the project. Revenues collected in any year in excess of the match requirement may be used by the county to fund other transportation projects.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires December 31, 2049, or earlier if the county determines that it has raised sufficient revenue to fund the county match for the DMC.
Miscellaneous A wheelage tax of $10 per vehicle was also imposed to fund the project.

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Proctor

Initially authorized Laws 1999, ch. 243, art. 4, sec. 18
Date imposed April 1, 2000
Amount collected in CY 2014 $183,601
Additional legislative action Laws 2008, ch. 366, art. 7, secs. 12-14; Laws 2010, ch. 389, art. 5, secs. 1-2; Laws 2013, ch. 143, art. 8, sec. 52
Tax authorized A sales tax of up to one-half of 1 percent. A complementary use tax is authorized, as well as a flat tax of up to $20 per motor vehicle purchased within the city from anyone engaged in the retail sale of motor vehicles.
Required city action to impose the tax The tax was approved by city voters at an election on November 2, 1999.
Allowed use of the tax proceeds The tax pays for streets and for construction of the Proctor community activity center. Capital expenditures are limited to $3.6 million. In 2008, the law was amended to allow additional revenues from taxes received to be used by the city to pay for the following capital improvement projects: public utilities, including water, sanitary sewer, storm sewer, and electric; sidewalks; bikeways and trails; and parks and recreation. For the newly allowed capital improvement projects, the aggregate principal amount of bonds may not exceed $7.2 million, plus an amount equal to the costs related to the issuance of bonds, including interest on the bonds. In 2010, the individual bond limits for the different projects were replaced with one total bond limit of $10 million plus associated costs.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax was to expire after sufficient revenues are raised to pay for the $10.8 million in authorized bonds for the projects, or earlier if the city so specifies by ordinance. The 2010 law changed the expiration date to when funds are sufficient to pay off the $10.8 million bond.
Miscellaneous The enabling legislation requires that the referendum on the related bonds state that although the sales tax revenues are pledged to pay the bonds, the bonds were still general obligation bonds, guaranteed by the city's property taxes. The 2013 law allowed the city extra time to file its approval of the authority with the secretary of state.

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Rochester

Initially authorized Laws 1983, ch. 342, art. 19, secs. 4 and 5
Date imposed October 1, 1983
Amount collected in CY 2014 $11,052,708 (at a tax rate of 0.5 percent)
Additional legislative action Laws 1989, ch. 233; Laws 1992, ch. 511, art. 8, sec. 33; Laws 1998, ch. 389, art. 8, sec. 43; Laws 2005, 1st spec. sess., ch. 3, art. 5, secs. 28-30; Laws 2011, 1st spec. sess., ch. 7, art. 4, secs. 5-7; Laws 2013, ch. 143, art. 10, sec. 8 (codified as Minn. Stat. sec. 469.45) and secs. 11-13
Tax authorized Originally allowed a sales tax of up to 1 percent. A flat tax of up to $20 on each motor vehicle purchased or acquired within the city from a retail seller of motor vehicles also was authorized. The 1992 law reduced the sales tax to one-half of 1 percent and added a complementary use tax. The motor vehicle flat tax was extended at the $20 per vehicle rate. The 2013 law gave the city the option to increase the tax rate by one-fourth of 1 percent. As of January 1, 2016, the rate is 0.75 percent.
Required city action to impose the tax Approval by city voters at an election on November 2, 1982, of bond issues associated with the allowed uses of the tax proceeds was required before the tax was imposed. The 1989 extension just required city council approval. The 1992 law required voter approval of bond issues at an election on November 6, 1990. The 1998 law required approval at a general or special election. This extension of the tax was approved at a special election. The extension authorized in the 2005 special session law required voter approval at a 2005 special election or the 2006 general election. The extension in the 2011 special session law requires voter approval at a general election before December 31, 2012. The tax increase or extension allowed in the 2013 law only required city approval.
Allowed use of the tax proceeds The initial tax allowed for $16 million of the proceeds to be used for improvements to the city park and recreation system and $16 million for flood control improvements. The 1989 law extended the date before the termination of the tax and dedicated the proceeds in excess of the original $32 million to flood control and flood damage costs.

The 1992 law allowed the tax proceeds to be used to fund fire station, city hall, and public library facility improvements, with total bond proceeds and tax revenues not to exceed a combined $28.76 million. The 1998 law provided for funding of additional infrastructure improvements and a higher education recreation and sports center, with a capital expenditure ceiling of $71.5 million, of which no more than $20 million may be used for the education facilities.

The 2005 special session law allowed the city to raise another $40 million, $32 million for transportation, and $8 million for higher education facilities. The 2011 special session law allows the city to raise an additional $139.5 million to fund a number of roads, higher education, and development projects; however, $5 million must be shared with 17 specified surrounding communities for economic development projects.

The 2013 law gives the city two options to help fund the city's share of infrastructure costs (up to $128 million) associated with the Destination Medical Center (DMC) project. It may either (1) extend the existing half of 1 percent sales tax up to December 31, 2049, with any excess revenue not needed to meet obligations financed under the 2011 law, to fund the DMC project; and/or (2) impose an additional quarter of 1 percent tax with all revenues from the increase going to the DMC project. The city chose to increase the tax rate, beginning January 1, 2016.

Tax administration The Commissioner of Revenue was permitted to enter into an agreement with the city to provide for the tax collection, and to charge the city a reasonable fee. The Department of Revenue administers and collects the tax.
Tax expiration The original tax was to expire after $32 million was raised; the 1989 amendment changed the expiration date to December 31, 1992. The 1992 law extended the tax at the lower rate until enough was raised to finance the additional $28.76 million in capital improvement bonds. The 1998 law required the tax to expire after revenues raised sufficient to fund the $71.5 million for the latest projects and authorized bonds. The 2005 special session law changed the termination date to when revenues are sufficient to fund the additional $80 million in projects. The 2011 special session law extends the tax, if approved by voters, until the additional $137.5 million in authorized projects are funded. The 2013 law allowed the tax to continue until December 31, 2049, provided that all money not needed for the other authorized projects be committed to public infrastructure related to the Destination Medical Center.
Miscellaneous The tax in Rochester has never been allowed to expire since its initial imposition. All elections required to extend the tax for additional projects have occurred while the tax was still in effect.

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St. Paul

Initially authorized Laws 1993, ch. 375, art. 9, sec. 46
Date imposed September 1, 1993
Amount collected in CY 2014 $18,110,021
Additional legislative action Laws 1997, ch. 231, art. 7, sec. 40; Laws 1998, ch. 389, art. 8, secs. 30, 31, 32, 36, and 37; Laws 2003, 1st spec. sess., ch. 21, art. 8, sec. 13; Laws 2005, 1st spec. sess., ch. 3, art. 5, secs. 26, 27; Laws 2009, ch. 88, art. 4, secs. 15, 16, and 18; Laws 2013, ch. 143, art. 8, secs. 44 and 45.
Tax authorized A sales tax of up to one-half of 1 percent. No complementary use tax was authorized.
Required city action to impose the tax The city needed to pass a resolution before July 1, 1993, stating its intent to exercise its authority to impose a sales tax.
Allowed use of the tax proceeds

The tax allowed the city to fund or issue bonds to fund expansion and remodeling costs for the St. Paul Civic Center, with remaining funds to be spent on capital projects furthering cultural and economic development in St. Paul's downtown and neighborhoods. The 1997 amendment allows the city to spend up to 10 percent of sales tax revenue allocated for cultural and economic development activities on operating expenses of cultural organizations. The 2003 law requires that 10 percent go for capital and operating expenses of cultural organizations.

The 1998 law changed the distribution of St. Paul sales tax proceeds in a number of ways, including:

  • adding the demolition and reconstruction of an arena associated with the civic center complex to the authorized uses of the sales tax revenue;
  • allocating up to 40 percent of the city sales tax revenue to the civic center and associated hockey arena, and at least 60 percent to the cultural and economic development activities, although some short term adjustments can be made in the allocation as needed to meet debt obligations;
  • requiring revenue distributed to the city's cultural STAR program to be awarded through a grant or loan review process; 80 percent of such revenue must go to nonprofit arts organizations, libraries, or museums in downtown St. Paul, while the remaining 20 percent may be allocated to businesses in the cultural district or to nonprofit organizations in other neighborhoods; and
  • requiring any expenditure proposals for neighborhood development programs to first be reviewed by a citizen review board of 17 members representing the district councils.

The 2005 special session law allows the city to fund up to $3.5 million annually to pay bonds for capital projects related to the cultural and economic development projects. This authority applied to revenues collected in the years 2006-2009. In 2009 this authority was extended to revenues collected through 2014.

In 2009, the law was amended to (1) require interest loan repayments from the STAR and neighborhood development programs be used to fund more projects in those areas, and (2) to explicitly require that the review process for neighborhood proposals be open, fair, and competitive.

The 2013 law repealed the 2009 provision and provided that any revenue raised from 40 percent of the tax not needed for the civic center and hockey arena may be used for any economic development purpose.

Tax administration The tax is collected by the Commissioner of Revenue with the state sales tax. The tax revenue are returned to the city each month, net the cost to the state of collecting and administering the tax.
Tax expiration The original law required that the tax expire when the revenues raised by the portion of the tax proceeds dedicated to the convention center are sufficient to pay for the authorized bonds of up to $65 million. The 1998 law changed the expiration date to December 31, 2030. The 2013 law changed the expiration date to December 31, 2042.
Miscellaneous On January 15 of odd-numbered years, the city must report to the legislature on the use of sales tax revenue during the preceding two years. A complementary use tax was imposed in St. Paul beginning January 1, 2000, as required under Minnesota Statutes sec. 297A.99. The 1998 law amended the same portion of the original law as was amended in the 1997 law but did not pick up the 1997 amendment. Although it looks like the two laws do not directly conflict it is not clear how to interpret the laws together.

The 2012 law to fund the Vikings stadium also provided that cities of the first class may use some of their existing sales tax revenue to support "capital projects of regional significance" (Minn. State. sec. 297A.9905). St. Paul has used this to help fund a baseball stadium.

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Two Harbors

Initially authorized Laws 1998, ch. 389, art. 8, sec. 45
Date imposed April 1, 1999
Amount collected in CY 2014 $300,916
Additional legislative action Laws 2008, ch. 366, art. 7, sec. 11
Tax authorized A sales tax of up to one-half of 1 percent. A complementary use tax was authorized, as well as a flat tax of up to $20 for each motor vehicle purchased or acquired within the city from a retail seller of motor vehicles.
Required city action to impose the tax The tax was subject to voter approval at the 1998 general election.
Allowed use of the tax proceeds The tax will support sanitary sewer separation, wastewater treatment, and harbor refuge development projects and, due to a 2008 amendment, water system improvements.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires when costs associated with the allowed uses of the tax are paid, including repayment of any bonds issued up to the $20 million authorized by the law.
Miscellaneous In 1998, the legislature began adding the requirement that the referendum on the related bonds state that although the sales tax was pledged to pay the bonds, the bonds were still general obligation bonds, guaranteed by the city's property taxes.

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Worthington

Initially authorized Laws 2005, 1st spec. sess., ch. 3, art. 5, sec. 44
Date imposed April 1, 2009
Amount collected in CY 2014 $832,915
Additional legislative action Laws 2006, ch. 259, art. 3, sec. 8 and  Laws 2007, ch. 13, art. 1, sec. 22; Laws 2014, ch. 308, art. 7, secs. 3 and 4
Tax authorized A sales and use tax of one-half of 1 percent; also a $20 per vehicle excise tax on motor vehicles sold by licensed dealers in the city.
Required city action to impose the tax The majority of city voters had to approve the tax at the general election. The extension authorized under the 2014 law only requires city council approval.
Allowed use of the tax proceeds The revenues must fund construction of a community center complex and renovations of the Memorial Auditorium. The 2014 law extends the duration of the tax with the additional revenue used to fund the Lewis and Clark water project.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax expires at the earlier of (1) ten years, or (2) when the amount raised is sufficient to fund the $6 million in bonds authorized to fund the indicated projects. The 2014 law allows the city to extend the tax until December 31, 2039.

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Taxes That Were Imposed and Have Expired

 

Cook County

Initially authorized Laws 1993, ch. 375, art. 9, sec. 45
Date imposed January 1, 1994
Additional legislative action Laws 1997, ch. 231, art. 7, sec. 36
Tax authorized A sales tax of up to 1 percent of sales made in the county. No complementary use tax was authorized.
Required city action to impose the tax The tax needed to be approved by voters at a general or special election by December 1, 1993.
Allowed use of the tax proceeds The 1993 law allowed up to $4 million in bonds for expansion and improvement of the North Shore hospital to be paid from tax proceeds. The 1997 law allowed an additional $2.2 million in bonds to be funded from the tax to pay for improvements to the North Shore care facility as well as additional improvements to the hospital.
Tax administration The tax is collected by the Commissioner of Revenue with the state sales tax. The tax revenue are returned to the county on a quarterly basis, net the cost to the state of collecting and administering the tax.
Date expired March 31, 2008
Miscellaneous A complementary use tax was imposed within the county beginning January 1, 2000, as required under Minnesota Statutes sec. 297A.99.

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Owatonna

Initially authorized Laws 2006, ch. 259, art. 3, sec. 12
Date imposed April 1, 2007
Additional legislative action Laws 2009, ch. 88, art. 4, sec. 20
Tax authorized A sales and use tax of one-half of 1 percent; also a $20 per vehicle excise tax on motor vehicles sold by licensed dealers in the city.
Required city action to impose the tax The tax had to be approved by the majority of the city voters at the 2006 general election.
Allowed use of the tax proceeds Transportation projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study; regional parks and trail development; the West Hills Complex plan, including library and fire station, as adopted by the city council on January 17, 2006. In 2009, the city was granted authority to divert $1.5 million earmarked for the original transportation project to another road project.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes, sec. 297A.99.
Tax expiration The tax expires at the earlier of (1) ten years, or (2) when the amount raised is sufficient to fund the $12.7 million in bonds authorized to fund the indicated projects.
Date expired June 30, 2011

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Willmar (1994-2001)

Initially authorized Laws 1997, ch. 231, art. 7, sec. 36
Date imposed January 1, 1994
Tax authorized A sales and use tax of up to one-half of 1 percent and a $20 per vehicle excise tax on vehicles sold by licenses dealers in the city.
Required city action to impose the tax The tax was proposed by voters at the 1996 general election prior to the authority being granted.
Allowed use of the tax proceeds Revenues had to be used to repay up to $4.5 million in bonds for construction and improvement of library facilities.
Tax administration The tax would have been collected by the Commissioner of Revenue with the state tax as provided under Minnesota Statutes sec. 297A.99.
Tax expiration The tax is terminated when revenues are sufficient to pay the $4.5 million in bonds.
Date expired December 31, 2001

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Willmar (2006-2013)

Initially authorized Laws 2005, 1st spec. sess., ch. 3, art. 5, sec. 42
Date imposed January 1, 2006
Amount collected in CY 2013 $429,176; Last full year CY 2012, $2,064,924
Tax authorized A sales and use tax of one-half of 1 percent
Required city action to impose the tax The majority of city voters approved the tax at the November 2, 2004, general election, before the tax was authorized.
Allowed use of the tax proceeds The revenues must fund completion and expansion of the airport/industrial park; construction of hiking and biking trails and a connection between the Blue Line and civic center buildings; and purchase of a portion of the Willmar regional treatment center campus.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Date expired March 31, 2013

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Winona

Initially authorized Laws 1998, ch. 389, art. 8, sec. 46
Date imposed April 1, 1999
Tax authorized A sales tax of up to one-half of 1 percent; also a $20 per motor vehicle excise tax on motor vehicles sold by licensed dealers in the city.
Required city action to impose the tax The majority of the city voters had to approve the tax in the 1998 general election.
Allowed use of the tax proceeds Revenues must be used by the city to pay all or part of the capital and administrative costs of dredging Lake Winona, including paying debt service on bonds or other obligations issued to finance the project.
Tax administration The tax is collected by the Commissioner of Revenue with the state tax, as provided under Minnesota Statutes sec. 297A.99.
Date expired December 31, 2002
Miscellaneous In 1998, the legislature began adding the requirement that the referendum on the related bonds state that although the sales tax was pledged to pay the bonds, the bonds were still general obligation bonds, guaranteed by the city's property taxes.

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February 2016

House Research Department  ♦  600 State Office Building, Saint Paul, MN  55155  ♦  House.Research@house.mn  ♦  651-296-6753