House committee hears bill to repeal 50¢ retail delivery fee, debate centers on transportation funding and tax shifts

House File 5, introduced by Representative Jim Joy, would repeal Minnesota’s 50¢ retail delivery fee and make several related changes to transportation funding and taxes, and the House Transportation Finance and Policy Committee voted to refer the bill to the Taxes Committee.

The bill’s author, Representative Jim Joy, told the committee, “This bill is making Minnesota affordable.” Joy said the measure would pursue a full Social Security subtraction at the state level, remove an automatic inflator on the gas tax and other indexed provisions, and repeal the retail delivery fee. He argued those changes would reduce costs for residents and improve competitiveness with neighboring states.

The proposal would also shift certain revenues and allocations within the state transportation funding architecture. Committee fiscal staff and Department of Revenue materials in the packet show the bill would move the motor vehicle rental tax into the Transportation Advancement Account (TAA), eliminate the retail delivery fee as a TAA revenue source, and change the split of some metro sales-tax receipts between the Metropolitan Council and metro counties.

Why it matters: local governments and transportation advocates rely on the TAA and related streams for street and road work; any change to the indexing or revenue sources could alter predictable funding for cities, townships and county roads. League of Minnesota Cities and Metro Cities speakers urged caution in changing revenue streams enacted in 2023 and asked for more time to see how those revenues stabilize.

Fiscal overview and revenue projections

House fiscal staff and a Department of Revenue document (MB-019) presented the bill’s…