This bill modifies the framework for enacting local sales and use taxes in Minnesota by amending Minnesota Statutes 2022, section 297A.99, subdivision 1. It clarifies that political subdivisions can impose a general sales tax only with legislative authority and voter approval, while introducing new provisions that preempt certain special laws enacted before July 1, 2024. The total tax rate imposed by a political subdivision is capped at one percent, with exceptions for taxes authorized before June 1, 2023. Additionally, the bill prohibits political subdivisions from using funds to promote a referendum for a local sales tax, allowing expenditures solely for informational purposes.

The legislation also repeals Minnesota Statutes 2023 Supplement, section 297A.99, subdivision 3a, and establishes new requirements for voter approval and the allocation of tax revenues. Proceeds from the local sales tax must be dedicated to specific capital projects approved by voters, and political subdivisions are required to notify the commissioner and state auditor about the sufficiency of tax revenues for these projects. The bill mandates that political subdivisions conduct analyses and obtain resolutions from surrounding areas before imposing a local sales tax for specific projects, and it includes a one-year waiting period for imposing new local sales taxes after one has expired. Furthermore, it establishes a filing requirement for political subdivisions and tasks the state auditor with developing a uniform accounting system for these taxes, ensuring transparency and compliance.

Statutes affected:
Introduction: 297A.99