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Local Sales Tax in Minnesota Attachment C the city of Wilmar, which imposed a tax in 1997 that expired in 2001 and sought and received authority for a new tax in 2005 that expired at the end of 2012; and sought and received authority for a new tax in 2019; the city of Fergus Falls, which let its 2010 tax expire in 2016 and received authority to impose a new tax in 2017. Determining the Site of a Delivery for Local Tax Purposes Zip codesare usedto determine whethera delivery sale is subject to a local sales and use tax.If a zip code area includesmorethan onetax ratethe lowest rate in the zip code area applies. For example, if a zip code includes both a portion of Edina (with no local sales tax) and a portion of Minneapolis (with a half-cent local sales tax), the Minneapolis tax may not be collected. Nine- digit zip codes should beused,if available, to determinethe tax rate.(Minn. Stat. §297A.99, subd. 10) Special Authority for First-class Cities Notwithstanding the requirement that sales tax revenues only fund the projects explicitly specified in the enabling legislation, cities of the first class (Minneapolis, St. Paul, Duluth, and Rochester) may also use the revenues to fund certain large capital projects of regional significance without additional voter approval. These cities may use revenues that exceed the amount needed to pay for the financing of the specified capital projects to help fund a sports facility, convention center, or civic center that has a construction cost of at least $40 million. 9 (Minn. Stat. § 297A.9905) General Steps for Seeking Local Sales Tax Authority In order to impose a local sales tax, a political subdivision must obtain enactment of a special law authorizing it to do so by taking the following steps (in the order listed): 1)The governing body of a local governmentmust pass a resolution proposing the tax and including the following: a.the proposed tax rate; b.a detailed description of no more than five capital projectsto be funded by the tax; c.documentation of the regional significance of each project including the benefits to nonlocal persons and businesses; d.the amount of revenue to be raised for each project and the estimated time to raise that amount; and e.the total revenue to be raised and anticipated expiration date forthe tax. 9 This authority was granted in the bill authorizing the use of the Minneapolis sales tax to fund a portion of the Vikings football stadium. The city of St. Paul is helping to finance a minor league baseball stadium from its existing tax. Minnesota House Research Department Page 6