[{"_1":2,"_88":-5,"_89":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,76],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},"mediaId",6661933,"mediaKeyId","2401814-ae3096393b459077b22d1b15e2da485b","parentId",2401814,"title","Committee adopts amendment and lays over bill giving cities authority to seek voter-approved local sales taxes","audioSeconds",5694,"startMs",1232000,"endMs",6926000,"viewUrl","/Search/View?dp=1&key=2401814-ae3096393b459077b22d1b15e2da485b&start=1232&end=6926","thumbnailUrl","https://assets.pipeline.soar.com/2401814-ae3096393b459077b22d1b15e2da485b/thumbnail_1232000.jpg","articleUrl","/articles/6661933/Minnesota/Committee-adopts-amendment-and-lays-over-bill-giving-cities-authority-to-seek-voter-approved-local-sales-taxes","mediaUrl","https://secure.pipeline.soar.com/6661933-23a832a7607ca690bf161f1164e1133c/orig.mp4?Expires=1771153457&Signature=VMRnFYBQKywZsv3lHg3J7QRHpKacTp-yToq2DOaU~zjICto2Eb8~m8fzyw4tVapxMdJ3IFnoAuUnoCGi2PYI5TIo2SCL4tWFa0aroqf3kaXwQxQF4P0qc4eFWoM3NY1RYb8B122m7HXouUWDFMmAwjdLapnqb5MTBdQ90muZwMGL3U0G2cfKTb0BEpOd-3G7ha~Qo-ofGlfX1G7cazvy~8QAIrmbTBgcOx9Ju4q8O1IIv5ZwwCXTqqMRLYFHs887voXPGcTiwKT9FztLG0C9M87JZNODMQxwVBSRqkyMtZD505vn9HH39cVpbu-uu041s-Lty-AYJqDX3n~fSfIL5g__&Key-Pair-Id=KUT5TJCACFTXG","author","Minnesota Legislature","date","2025-02-26T16:52:23.807Z","article","Senate File 375, introduced by Senator Rest and discussed Feb. 26 in the Minnesota Senate Taxes Committee, would create a general authority allowing cities to propose voter-approved local sales taxes to fund projects of regional significance.

The bill enumerates qualifying project categories, sets a cap on new local sales taxes at a half-cent in most cases, creates a process for Department of Revenue review of eligibility, and includes an inflation adjustment for project revenues. The A5 author’s amendment was offered in committee, an oral revision deleting lines 1.2 to 3.3 was adopted, and the committee laid the bill over for possible inclusion.

Equalization and sharing pools. A major element in the discussion was an \"equalization\" mechanism that would withhold 5% (or 8% if the tax is imposed by special law) of a contributor city's local sales tax revenues and distribute those amounts to a pool of qualified recipient cities. Department of Revenue staffer Rachel Johnson walked the committee through multiple color-coded examples to illustrate how contributors and qualified recipients would be identified and how sharing pools would be allocated differently in metro and nonmetro counties.

Johnson said a \"contributor\" is a city that imposes a local sales tax under section 297.9901 or by special law, and a \"qualified recipient\" must not itself be a contributor, must not have imposed a local sales tax in the prior calendar year, and must be contiguous to a contributor in metro counties or located partly in a nonmetro county that contains a contributor. The A5 amendment, as presented, limits equalization to cities (excluding counties) so that only cities would participate in sharing pools.

Prevailing wage debate. The bill initially included a prevailing-wage requirement for projects paid with these local sales tax revenues. That language had applied only to metro-area projects and drew objections from labor groups and some senators because it would have treated metro and Greater Minnesota workers differently. The A5 amendment removed the prevailing-wage language; witnesses from the Minnesota Building and Construction Trades Council urged the committee to restore prevailing-wage protections in later drafts, citing Minnesota statutes and the Department of Labor and Industry’s county-by-craft surveys as the mechanism for setting rates.

Stakeholder testimony. City and county officials, regional associations and construction labor representatives testified in support or raised concerns:

- Jenny Maxx, city administrator of Nisswa and League of Minnesota Cities representative, told the committee the bill would give cities a clearer, more transparent process to plan projects without repeated special-legislation requests.

- Michael Williams (representing association stakeholders including AMC and MICA and noting Stearns County’s recent successful referendum for a justice center) said counties provide regionally shared services and supported allowing counties to use local sales taxes for large, costly public-safety projects.

- Patricia Nauman, executive director of Metro Cities, said Metro Cities supports the bill’s diversification of local revenue options and found the equalization examples helpful, though Metro Cities had no formal position on the equalization formula as presented.

- Kyle Macarios of the Minnesota Building and Construction Trades Council opposed the selective prevailing-wage approach that had been in earlier drafts and urged inclusion of prevailing-wage protections to ensure taxpayer-funded projects pay locally prevailing rates.

- Bradley Peterson of the Coalition of Greater Minnesota Cities praised the bill’s list of eligible projects and urged considering additional categories such as housing; he also noted members’ concerns about the equalization withholding, which can complicate project budgeting.

Other technical provisions. Sen. Rest described process elements intended to reduce the need for special legislation: a Department of Revenue review of statutory guidelines, definitions for local sales taxes, and limits to how frequently local governments can seek new taxes if already at the statutory cap. She also said the bill leaves the current moratorium in statute and that the moratorium expires June 1; that timing and other technical matters shaped several of the amendment choices.

Committee action. The A5 author’s amendment was offered, orally amended to delete specified lines, adopted in committee, and Senate File 375 as amended was laid over for possible inclusion.

Ending: Sponsors and stakeholders agreed to continue technical discussions and an informal follow-up review once an unofficial engrossment is available. The committee will revisit the bill in future proceedings.","mediaType","Video","parentTitle","Committee on Taxes - 02/26/25","oneSentenceSummary","Senate File 375, introduced by Senator Rest and discussed Feb. 26 in the Minnesota Senate Taxes Committee, would create a general authority allowing cities to propose voter-approved local sales taxes to fund projects of regional significance.","taxTitle","2025 Legislature MN, Minnesota","taxId",77817,"location","Minnesota","headline","","shortSummary",{"_33":77,"_35":36,"_37":38,"_39":78,"_41":79,"_43":80,"_45":81,"_47":82,"_49":83,"_51":84,"_53":85,"_55":56,"_57":58,"_59":86,"_61":62,"_63":64,"_65":87,"_67":68,"_69":70,"_71":72,"_73":74,"_75":74},6661938,"Senators hear proposal to let retailers keep a percentage of sales tax to offset collection costs",917,335000,1252000,"/Search/View?dp=1&key=2401814-ae3096393b459077b22d1b15e2da485b&start=335&end=1252","https://assets.pipeline.soar.com/2401814-ae3096393b459077b22d1b15e2da485b/thumbnail_335000.jpg","/articles/6661938/Minnesota/Senators-hear-proposal-to-let-retailers-keep-a-percentage-of-sales-tax-to-offset-collection-costs","https://secure.pipeline.soar.com/6661938-58f1a66a1471a994ba336661f201dd40/orig.mp4?Expires=1771153457&Signature=bi1IdODs3BX0AXWltWtyQ2x4LiBviZQ6NoQ9nUQWyEqasJeR0yuWKLM9iWIFFZM2eEE-1kX-Q04Hz8WOc27a8L~1oOznOQnOnyeK39TCvTPDXGfRBhy9ySpBewJv8Hgl5ENEfWJbUyyOOIeTdc8rkQmigx7IBBS7-khL5eG1fxyIAHIUr3Y43Gn1CNIR7gwkMpLZH5zZcwJbbKQIqhTXOwIbmrPfz8v4NquyyUSEy4F1I73-RW~SPHvc~SJhcM7RLUY1V7tR33mHFA3a~I6ikEYGFjtadPlvU2hXdHmuq7w3yamruz5~bK7tKZMdoQ9~-XybaJ1rNjzI10h~aHlyIg__&Key-Pair-Id=KUT5TJCACFTXG","Senator Rest introduced Senate File 44 on Feb. 26, asking the Taxes Committee to consider a vendor collection allowance that would let retailers retain a small percentage of the sales tax they collect to offset the costs of collecting and remitting the tax.

The bill would add a definition for \"net liability,\" permit retailers to retain a percentage of sales tax in recognition of the administrative burden of collection, and scale the allowance based on levels of sales. It also would exclude taxes otherwise paid by a retailer from eligibility for the allowance, and it sets a calculation for the minimum remittance amount that a retailer must pay to claim the allowance.

Why it matters: Proponents said the allowance would recognize real costs borne by small businesses and would bring Minnesota in line with many other states. Opponents and fiscal analysts have warned the allowance could reduce state general fund receipts by tens of millions of dollars annually.

Sen. Rest described revenue estimates for the concept in varying terms during the hearing: at one point she said a calculation showed a potential cost to the state of almost $200 million; she later cited a projection of about $88 million in 2026 and nearly $100 million in 2027.

Small-business owners who testified told the committee that collecting and remitting sales taxes imposes measurable labor and fee costs.

Scott Farrell, identified as general manager of Down the Valley Record Stores, said his business has operated in Minnesota since 1972 and employs about 20 to 25 people. “The remittance process alone takes our bookkeeper nearly a half day each month,” Farrell told the committee. He said an audit requires a staff member to dedicate a week to fulfilling obligations and that the combined time and credit-card fees are a significant strain for a small employer.

Chan(n)ing Smith, owner of a neighborhood convenience store in Emmerich Grove Heights, said credit-card processing fees on fuel and other taxable items add up. “Each gallon of fuel purchased with a credit debit card at my store cost me about a penny,” Smith said, and estimated that on about 1 million gallons that cost him roughly $8,500 last year. Smith said his store collected $52,979 in taxable items other than fuel and paid nearly $1,600 in card fees to collect that money for the state.

Logan McKee, second-generation owner of Games by James, said almost 90% of his sales are credit-card transactions and that his business collected more than $400,000 in sales tax on credit-card transactions last year. He said bookkeeping and processing costs exceeded $10,000 for his operations across six locations.

Supporters urged the committee to consider the bill as a measure to help small retailers remain competitive with larger firms and with out-of-state sellers who do not face the same local collection burdens.

The committee did not vote on the bill. The record shows Senate File 44 was laid over for possible inclusion.

Ending: Senate File 44 will remain under consideration; Senator Rest said she intends to continue revising the proposal and to bring it back for further committee action as revenue estimates and legislative timing allow.","Senator Rest introduced Senate File 44 on Feb. 26, asking the Taxes Committee to consider a vendor collection allowance that would let retailers retain a small percentage of the sales tax they collect to offset the costs of collecting and remitting the tax.","actionData","errors"]

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Committee adopts amendment and lays over bill giving cities authority to seek voter-approved local sales taxes

Senators hear proposal to let retailers keep a percentage of sales tax to offset collection costs