SF5011

Purpose

This bill would allow the City of Hermantown to create a local sales and use tax of 0.5% (one-half of one percent) if voters approve it in a general election. The tax would be used for purposes described in subdivision 2 of the same bill.

Main Provisions

• Authorization: Hermantown may impose a 0.5% local sales and use tax by ordinance, but only if approved by voters at a general election as required by law.
• Scope and Additivity: The tax applies to sales and use transactions and would be in addition to any other local sales and use taxes that the city might impose under other laws.
• Administration and Enforcement: The imposition, administration, collection, and enforcement of the tax would follow the Minnesota local tax framework, specifically Minnesota Statutes section 297A.99.
• Legal Overrides: The bill states that the authority to impose and manage this tax is not limited by other laws, ordinances, or city charters, and that the amendments to subdivisions 2 and 3 apply even if other provisions would otherwise limit them.
• Funding Purposes: The tax would be assessed for the purposes described in subdivision 2 of the bill.

How the Tax Would Work in Practice

• Voter Approval: The tax would take effect only if Hermantown voters approve it in a general election.
• Tax Rate: The rate would be a half a percent (0.5%).
• Collection: The city would handle the tax under the standard state framework for local sales taxes, ensuring consistent collection and enforcement with other local taxes.
• Interaction with Other Taxes: This tax would be in addition to any other local sales and use taxes the city or others impose.

Significant Changes to Existing Law

• Introduces a new local option sales tax for Hermantown at 0.5%, contingent on voter approval.
• Explicitly places the tax under the administration rules of the state’s general local tax law (section 297A.99) while clarifying that the city’s authority can override certain other legal limits.
• Clarifies that amendments to subdivisions 2 and 3 apply despite certain constraints in current law.

Summary in Plain Terms

• Hermantown could charge a new 0.5% local sales tax if residents vote yes.
• The tax would be used for purposes described by subdivision 2 and would be collected like other local taxes.
• The city could move forward with this authority even if other laws or city rules might otherwise restrict it, as long as voters approve the measure.

Election and Implementation

• The tax would only start if the general electorate votes to approve it.
• If approved, the city would set up the tax by ordinance and follow state collection rules.

Potential Impacts

• Local residents and visitors buying goods in Hermantown would pay an extra 0.5% on taxable purchases.
• The funds would support specified local projects or needs described in subdivision 2.
• The tax would operate alongside any other local taxes Hermantown may have.

Relevant Terms - sales and use tax - one-half of one percent (0.5%) - Hermantown - by ordinance - voters / general election - Minnesota Statutes § 297A.99 - administration, collection, enforcement - local sales tax / local option tax - subdivision 2 (purposes) - amendments to subdivisions 2 and 3 - notwithstanding - in addition to any other local tax