2001 Minnesota Statutes

     297A.99 Local sales taxes. 

    Subdivision 1.    Authorization; scope.  (a) A political 
 subdivision of this state may impose a general sales tax if 
 permitted by special law or if the political subdivision enacted 
 and imposed the tax before the effective date of section 
 477A.016 and its predecessor provision. 

    (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. 

    Subd. 2.    Local resolution before application for 
 authority.  Before the governing body of a political 
 subdivision requests legislative approval of a special law for a 
 local sales tax that is administered under this section, it 
 shall adopt a resolution indicating its approval of the tax.  
 The resolution must include, at a minimum, information on the 
 proposed tax rate, how the revenues will be used, the total 
 revenue that will be raised before the tax expires, and the 
 estimated length of time that the tax will be in effect.  This 
 subdivision applies to local laws enacted after June 30, 1998.  

    Subd. 3.    Requirements for adoption, use, termination. 
  (a) Imposition of a local sales tax is subject to approval by 
 voters of the political subdivision at a general election.  

    (b) The proceeds of the tax must be dedicated exclusively 
 to payment of the cost of a specific capital improvement which 
 is designated at least 90 days before the referendum on 
 imposition of the tax is conducted. 

    (c) The tax must terminate after the improvement designated 
 under paragraph (b) has been completed. 

    (d) After a sales tax imposed by a political subdivision 
 has expired or been terminated, the political subdivision is 
 prohibited from imposing a local sales tax for a period of one 
 year.  Notwithstanding subdivision 13, this paragraph applies to 
 all local sales taxes in effect at the time of or imposed after 
 May 26, 1999.  

    Subd. 4.    Tax base.  (a) The tax applies to sales 
 taxable under this chapter that occur within the political 
 subdivision. 

    (b) Taxable services are subject to a political 
 subdivision's sales tax, if they are performed either: 

    (1) within the political subdivision, or 

    (2) partly within and partly without the political 
 subdivision and more of the service is performed within the 
 political subdivision, based on the cost of performance. 

    Subd. 5.    Tax rate.  (a) The tax rate is as specified 
 in the special law authorization and as imposed by the political 
 subdivision. 

    (b) The full political subdivision rate applies to any 
 sales that are taxed at a state rate less than or more than the 
 state general sales and use tax rate. 

    Subd. 6.    Use tax.  A compensating use tax applies, at 
 the same rate as the sales tax, on the use, storage, 
 distribution, or consumption of tangible personal property or 
 taxable services. 

    Subd. 7.    Exemptions.  (a) All goods or services that 
 are otherwise exempt from taxation under this chapter are exempt 
 from a political subdivision's tax. 

    (b) The gross receipts from the sale of tangible personal 
 property that meets the requirement of section 297A.68, 
 subdivision 15, are exempt, except the qualification test 
 applies based on the boundaries of the political subdivision 
 instead of the state of Minnesota. 

    (c) All mobile transportation equipment, and parts and 
 accessories attached to or to be attached to the equipment are 
 exempt, if purchased by a holder of a motor carrier direct pay 
 permit under section 297A.90.  

    Subd. 8.    Credit for other local taxes.  If a person 
 paid sales or use tax to another political subdivision of this 
 state on an item subject to tax under this section, a credit 
 applies against the tax imposed under this section.  The credit 
 equals the tax the person paid to the other political 
 subdivision for the item.  

    Subd. 9.    Enforcement; collection; and administration. 
  (a) The commissioner of revenue shall collect the taxes 
 subject to this section.  The commissioner may collect the tax 
 with the state sales and use tax.  All taxes under this section 
 are subject to the same penalties, interest, and enforcement 
 provisions as apply to the state sales and use tax. 

    (b) A request for a refund of state sales tax paid in 
 excess of the amount of tax legally due includes a request for a 
 refund of the political subdivision taxes paid on the goods or 
 services.  The commissioner shall refund to the taxpayer the 
 full amount of the political subdivision taxes paid on exempt 
 sales or use. 

    Subd. 10.    Use of zip code in determining location of 
 sale.  To determine whether to impose the local tax, the 
 retailer may use zip codes if the zip code area is entirely 
 within the political subdivision.  When a zip code area is not 
 entirely within a political subdivision, the retailer shall not 
 collect the local tax if the purchaser notifies the retailer 
 that the purchaser's delivery address is outside of the 
 political subdivision, unless the retailer verifies that the 
 delivery address is in the political subdivision using a means 
 other than the zip code.  Notwithstanding subdivision 13, this 
 subdivision applies to all local sales taxes without regard to 
 the date of authorization.  

    Subd. 11.    Revenues; cost of collection.  The 
 commissioner shall remit the proceeds of the tax, less refunds 
 and a proportionate share of the cost of collection, at least 
 quarterly, to the political subdivision.  The commissioner shall 
 deduct from the proceeds remitted an amount that equals 

    (1) the direct and indirect costs of the department to 
 administer, audit, and collect the political subdivision's tax, 
 plus 

    (2) the political subdivision's proportionate share of the 
 indirect cost of administering all taxes under this section, 
 plus 

    (3) the cost of constructing and maintaining a zip code or 
 geo-code database necessary for local sales tax collections 
 under the Streamlined Sales and Use Tax Agreement in section 
 297A.995. 

    The initial cost of constructing a database under clause 
 (3) shall be distributed among the cities with a local sales tax 
 based on each city's population.  The commissioner shall develop 
 a method for distributing the cost of maintaining the database 
 among the cities with a local sales tax based on the number of 
 boundary changes for each city. 

    Subd. 12.    Effective dates; notification.  (a) A 
 political subdivision may impose a tax under this section 
 starting only on the first day of a calendar quarter.  A 
 political subdivision may repeal a tax under this section 
 stopping only on the last day of a calendar quarter. 

    (b) The political subdivision shall notify the commissioner 
 of revenue at least 90 days before imposing or repealing a tax 
 under this section. 

    Subd. 13.    Application.  This section applies to all 
 local sales taxes that were authorized before, on, or after June 
 2, 1997. 

    HIST: 2000 c 418 art 1 s 42; 1Sp2001 c 5 art 12 s 81-83 

*   NOTE:  The amendment to subdivision 9 by Laws 2001, First 
*Special Session chapter 5, article 12, section 82, is effective 
*January 1, 2003.  Laws 2001, First Special Session chapter 5, 
*article 12, section 82, the effective date.