2007 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 goods or services are subject to a political subdivision's sales tax, if they are
sourced to the political subdivision pursuant to section 297A.668.
    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, and the
political subdivision must not have more than one local sales tax rate or more than one local use
tax rate. This paragraph does not apply to sales or use taxes imposed on electricity, piped natural
or artificial gas, or other heating fuels delivered by the seller, or the retail sale or transfer of motor
vehicles, aircraft, watercraft, modular homes, manufactured homes, or mobile homes.
    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) 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.
(c) A political subdivision shall incur a legal debt to the state for refunds of local sales taxes
made by the commissioner after a tax has terminated when the amount of the refunds exceeds
the amount of local sales taxes collected for but not remitted to the political subdivision. The
commissioner of revenue shall bill the political subdivision for this difference. The commissioner
shall deposit the money in the state treasury and credit it to the general fund.
    Subd. 10. Use of zip code in determining location of sale. The lowest combined tax rate
imposed in the zip code area applies if the area includes more than one tax rate in any level of
taxing jurisdictions. If a nine-digit zip code designation is not available for a street address or if a
seller is unable to determine the nine-digit zip code designation of a purchaser after exercising
due diligence to determine the designation, the seller may apply the rate for the five-digit zip
code area. For the purposes of this subdivision, there is a rebuttable presumption that a seller
has exercised due diligence if the seller has attempted to determine the nine-digit zip code
designation by utilizing software approved by the governing board that makes this designation
from the street address and the five-digit zip code of the purchaser. Notwithstanding subdivision
13, this subdivision applies to all local sales taxes without regard to the date of authorization.
This subdivision does not apply when the purchased product is received by the purchaser at
the business location of the seller.
    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, changing the rate of, or repealing a tax under this section.
(c) The political subdivision shall change the rate of tax imposed under this section starting
only on the first day of a calendar quarter, and only after the commissioner has notified sellers at
least 60 days prior to the change.
(d) The political subdivision shall apply the rate change for sales tax imposed under this
section to purchases from printed catalogs, wherein the purchaser computed the tax based upon
local tax rates published in the catalog, starting only on the first day of a calendar quarter, and
only after the commissioner has notified sellers at least 120 days prior to the change.
(e) The political subdivision shall apply local jurisdiction boundary changes to taxes
imposed under this section starting only on the first day of a calendar quarter, and only after the
commissioner has notified sellers at least 60 days prior to the change.
    Subd. 12a. Notification of use tax. Any political subdivision imposing a local sales and
use tax, which maintains an official Web site, must display on its main home page a link to
a notice that residents and businesses in the political subdivision may owe a local use tax on
purchases of goods and services made outside of the political subdivision limits. The notice must
provide information, including a link to any relevant Department of Revenue Web site, on how
the taxpayer may get information and forms necessary for calculating and paying the tax. If the
political subdivision provides and bills for sewer, water, garbage collection, or other public utility
services, the billing statement must also include at least once per year a notice that residents
and businesses may owe a local use tax on purchases made outside of the political subdivision
limits and provide information on how the taxpayer may get information and forms necessary
for calculating and paying the tax.
    Subd. 13. Application. This section applies to all local sales taxes that were authorized
before, on, or after June 2, 1997.
History: 2000 c 418 art 1 s 42; 1Sp2001 c 5 art 12 s 81-83; 2003 c 127 art 1 s 28-30; 2005 c
151 art 7 s 22; 1Sp2005 c 3 art 5 s 22,23; 2006 c 259 art 6 s 30