HF 2183

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to sales tax; authorizing imposition of a
local sales tax for cities; amending Minnesota
Statutes 2004, sections 297A.99, subdivision 1;
477A.016; proposing coding for new law in Minnesota
Statutes, chapter 297A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [297A.981] LOCAL SALES TAX; CITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization; scope. new text end

new text begin Notwithstanding
sections 297A.99 and 477A.016, and any other contrary provision
of law, ordinance, or charter, a city with a population of 2,500
or more may, upon approval by the voters under subdivision 5,
impose a sales tax of one-half of one percent on sales
transactions taxable under this chapter that occur within the
city. The tax base is the same as defined in section 297A.99,
subdivision 4. This tax is in addition to any other local sales
tax imposed under other general or special law and must not be
included when calculating sales tax limits imposed under other
law, ordinance, or charter.
new text end

new text begin Subd. 2. new text end

new text begin Use tax. new text end

new text begin If a city imposes the tax authorized
in subdivision 1, a compensating use tax also applies, at the
same rate as the sales tax, on the use, storage, distribution,
or consumption of tangible personal property or taxable services.
new text end

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin (a) Revenues received from
taxes imposed under subdivisions 1 and 2, minus the reasonable
costs of collection, must be used exclusively to supplement and
not supplant existing spending for police and fire protection
services in the city. The total amount of revenue, not
including proceeds from the tax under this section, that the
city appropriates for its police and fire protection budgets
respectively, as a percent of the city's total budget, may not
be less than the average percent of the total budget allocated
for each of these purposes during the three years prior to the
adoption of the tax.
new text end

new text begin (b) The proceeds of the tax must be allocated between the
police and fire service budgets in the same ratio as the
allocation of the funds appropriated by the city for police and
fire department budgets during the three calendar years
preceding the adoption of the tax.
new text end

new text begin (c) The portion of the proceeds of the tax that are used by
the city for the costs of sworn personnel must not be less than
the average percent of its respective police and fire department
budgets that were spent on sworn personnel costs during the
three years prior to the adoption of the tax.
new text end

new text begin (d) For the purpose of applying the formulas in this
section, the city shall not consider any reorganization or
restructuring of its police or fire department that occurs after
enactment of the tax.
new text end

new text begin Subd. 4. new text end

new text begin Administration; collection; enforcement. new text end

new text begin A tax
imposed under this section shall be administered, collected, and
enforced by the commissioner of revenue as provided for under
section 297A.99, subdivision 9. The commissioner shall remit
the proceeds, minus refunds and the costs of collection, as
provided for in section 297A.99, subdivision 11.
new text end

new text begin Subd. 5. new text end

new text begin Local approval. new text end

new text begin The question of imposing the
local sales tax must be submitted to the voters at a general or
special election held for this purpose. If the majority of the
votes cast on the question are in the affirmative, the tax shall
be imposed on the first day of the next calendar quarter
beginning at least 30 days after the day of local approval. If
the majority of the votes cast on the question are in the
negative, the tax is not imposed and the city council must wait
at least one calendar year before again submitting the
imposition of the tax to the voters.
new text end

new text begin Subd. 6. new text end

new text begin Expiration of tax. new text end

new text begin The tax imposed under this
section expires on the first day of the calendar quarter that
occurs at least 90 days after the city council, by ordinance,
terminates the tax or the first day of the calendar quarter that
occurs at least 90 days after the city adopts a budget that does
not meet the conditions required in subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 2.

Minnesota Statutes 2004, section 297A.99,
subdivision 1, is amended to read:

Subdivision 1.

Authorization; scope.

(a) A political
subdivision of this state may impose a general sales tax if new text begin :
new text end

new text begin (1) new text end permitted by special law deleted text begin or deleted text end new text begin ;
new text end

new text begin (2) new text end if the political subdivision enacted and imposed the
tax before the effective date of section 477A.016 and its
predecessor provision new text begin ; or
new text end

new text begin (3) if permitted under section 297A.981 new text end .

(b) This section governs the imposition of a general sales
tax by the political subdivision. The provisions of this
section preempt the provisions of any special law:

(1) enacted before June 2, 1997, or

(2) enacted on or after June 2, 1997, that does not
explicitly exempt the special law provision from this section's
rules by reference.

(c) This section does not apply to or preempt a sales tax
on motor vehicles or a special excise tax on motor vehicles.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end

Sec. 3.

Minnesota Statutes 2004, section 477A.016, is
amended to read:

477A.016 NEW TAXES PROHIBITED.

No county, city, town or other taxing authority shall
increase a present tax or impose a new tax on sales or income new text begin ,
except as provided in section 297A.981 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end