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Senate Taxes Committee Seeks Input on Local Sales Tax Proposal
There are two upcoming meetings to discuss the bill language.
Sen. Ann Rest (DFL-New Hope), chair of the Senate Taxes Committee, released proposed bill language in preparation of the 2025 legislative session. The proposal would give cities and counties the power to take local sales tax decisions straight to voters. Currently, they must receive prior authorization from the Legislature.
Sen. Rest plans to introduce a bill early in session, aiming to have the Legislature pass it into law before the local sales tax moratorium expires at the end of session.
What’s in the bill?
The bill would limit the authority to regional projects, such as:
- Community centers.
- Athletic complexes.
- Convention centers.
- Parks and trails located outside the metro that meet specific requirements.
- Certain criminal justice facilities.
The bill would also limit the maximum rate that could be imposed under this authority to .5%.
Unlike previous versions of local sales tax general authority that were heard in the Senate, this bill language would include some revenue sharing between cities. The language would require that 5% of a city’s local sales tax imposed under this authority be shared with neighboring cities.
In the seven-county metro, the revenue would be shared only with city’s that share a border with one another. Outside the seven-county metro, the revenue would be shared with other cities in the same county. If a city already has a local sales tax, it would not be eligible to receive any revenue sharing distributions.
The project and tax rate limits would not apply to already existing local sales taxes or local sales taxes that are approved by the Legislature through special authorizations. Though any local sales taxes approved through special authorizations would be required to share 8% of their revenue rather than 5%.
- View the proposed local sales tax general authority bill language (pdf).
- View the local sales tax general authority bill summary (pdf).
What’s next?
There will be two meetings to discuss this language, Nov. 13, from 11 a.m.-12:30 p.m. and Dec. 4, from 11 a.m.-12:30 p.m. The agenda is the same for both meetings. There will be an opportunity to provide comments on the draft language. If you wish to attend either meeting or submit written comments, contact the committee administrator, Mitch Berggren at (651) 296-5540.