HF4681

Purpose

The bill aims to update and codify Elk River’s local option sales tax authority. It allows the city to impose a 0.5% sales and use tax by ordinance for purposes described in a specified subdivision, with the authority existing because it was approved by voters in the November 6, 2018 general election. The tax rules follow the general framework in Minnesota law for local taxes and are subject to the state’s tax administration rules.

Main provisions

• By adding a new subdivision, the bill allows the city of Elk River to impose by ordinance a sales and use tax of 0.5% for the purposes described in subdivision 2, and this authority remains in place notwithstanding other laws or ordinances, as approved by voters in the 2018 general election.
• The imposition, administration, collection, and enforcement of the tax are governed by Minnesota Statutes section 297A.99, except as otherwise provided in this section.
• If the tax is approved by voters at a general election under Minnesota Statutes section 297A.99 subdivision 3, paragraph a, the city must use the revenues from the tax for the purpose specified in subdivision 2a.

Significant changes to existing law

• Adds and clarifies an ongoing local tax authority for Elk River to levy a 0.5% sales and use tax by ordinance, contingent on voter approval from the 2018 election.
• Specifies that revenues raised are to be used for the purposes described in subdivision 2 (and, if voter-approved under 297A.99, subdivision 3, paragraph a, for purposes in subdivision 2a).
• Maintains the standard framework for how the tax is imposed, administered, collected, and enforced under Minnesota law (297A.99).

Relevant Terms - sales and use tax - local sales tax - Elk River - one-half of one percent (0.5%) - by ordinance - purposes specified in subdivision 2 - subdivision 2a - Minnesota Statutes section 297A.99 - imposition, administration, collection, enforcement - voter approval - November 6, 2018 general election