This bill proposes an increase in the state sales tax rate from 6.5% to 7%, effective for sales and purchases made after September 30, 2025. It also introduces a new provision that dedicates 0.5 percentage points of the sales tax revenue to a local government aid sales tax revenue account, which will be distributed to qualifying cities starting in calendar year 2026. The bill amends several sections of the Minnesota Statutes, including sections 297A.62, 297A.94, and 297A.99, and establishes a new section 477A.035 that outlines the distribution process for the local government aid.

Additionally, the bill sets an expiration date for certain laws applicable to local sales taxes, specifically stating that the provisions will apply to all local sales taxes authorized before, on, or after June 2, 1997, but will expire on January 1, 2026, upon the termination of the last existing local sales tax authorized by special law prior to December 31, 2025. The bill aims to enhance local government funding through increased sales tax revenue while ensuring that the distribution of these funds is managed effectively.

Statutes affected:
Introduction: 297A.62, 297A.94, 297A.99