1.1 	A bill for an act
1.2 	relating to taxation; allowing all cities to impose a local sales and use tax; 
1.3 	providing for an aid offset;amending Minnesota Statutes 2010, sections 297A.99, 
1.4 	subdivision 1; 477A.013, by adding a subdivision; 477A.016; proposing coding 
1.5 	for new law in Minnesota Statutes, chapter 297A.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2010, section 297A.99, subdivision 1, is amended to 
1.8 	read:
1.9 		Subdivision 1.Authorization; scope. (a) A political subdivision of this state may 
1.10 	impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) 
1.11 	under section 297A.994, (4) if permitted by special law enacted prior to May 20, 2008, or 
1.12 	~~(4)~~ (5) if the political subdivision enacted and imposed the tax before January 1, 1982, and 
1.13 	its predecessor provision.
1.14 	(b) This section governs the imposition of a general sales tax by the political 
1.15 	subdivision. The provisions of this section preempt the provisions of any special law:
1.16 	(1) enacted before June 2, 1997, or
1.17 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
1.18 	provision from this section's rules by reference.
1.19 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
1.20 	special excise tax on motor vehicles.
1.21 	~~(d) Until after May 31, 2010, a political subdivision may not advertise, promote,~~ 
1.22 	~~expend funds, or hold a referendum to support imposing a local option sales tax unless~~ 
1.23 	~~it is for extension of an existing tax or the tax was authorized by a special law enacted~~ 
1.24 	~~prior to May 20, 2008.~~

2.1 	EFFECTIVE DATE. This section is effective July 1, 2011.

2.2 	Sec. 2. [297A.994] CITY LOCAL SALES AND USE TAX.
2.3 		Subdivision 1.Authorization; rates. Notwithstanding sections 297A.99, 
2.4 	subdivisions 2, 3, 5, and 13, and 477A.016 or any other law, a statutory or home-rule 
2.5 	charter city may, upon approval of the voters at a general election, impose a local sales 
2.6 	and use tax of up to one-half of one percent within the city. If the city imposes a general 
2.7 	sales and use tax under another law, the amount it may impose under this section may 
2.8 	not exceed one-quarter of one percent while the other tax is imposed. The provisions 
2.9 	of section 297A.99, subdivisions 4 and 6 to 12a govern the imposition, administration, 
2.10 	collection, and enforcement of a tax imposed under this section. A tax authorized under 
2.11 	this section may not be imposed before July 1 of the year following the year in which the 
2.12 	general election is held.
2.13 		Subd. 2.Use of revenues. Revenues received from a tax imposed under subdivision 
2.14 	1 shall be deposited in the city's general fund and may be used for any city purpose.
2.15 		Subd. 3.Termination of tax. A tax imposed under subdivision 1 expires when the 
2.16 	city council, by ordinance, terminates the tax, subject to the notification requirements in 
2.17 	section 297A.99, subdivision 12.

2.18 	EFFECTIVE DATE. This section is effective beginning July 1, 2011.

2.19 	Sec. 3. Minnesota Statutes 2010, section 477A.013, is amended by adding a 
2.20 	subdivision to read:
2.21 		Subd. 11.Aid offset for certain local sales and use taxes. The aid under 
2.22 	subdivision 9 is reduced by 50 percent to any city imposing a sales and use tax under 
2.23 	section 297A.994 in the calendar year in which the aid is paid. If the sales tax is first 
2.24 	imposed after June 30 of the calendar year in which the aid is paid, the aid reduction in 
2.25 	that year shall only be equal to 50 percent of the second installment of the aid paid in that 
2.26 	calendar year. The amount of the reduction shall be retained in the general fund and not 
2.27 	redistributed under the formula contained in this section. 

2.28 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 
2.29 	2012 and thereafter.

2.30 	Sec. 4. Minnesota Statutes 2010, section 477A.016, is amended to read:
2.31 	477A.016 NEW TAXES PROHIBITED.
3.1 	No county, city, town or other taxing authority shall increase a present tax or impose 
3.2 	a new tax on sales or income, except as provided under sections 297A.992, 297A.993, 
3.3 	and 297A.994.

3.4 	EFFECTIVE DATE. This section is effective the day following final enactment.