Minnesota Codified Local Sales Tax Rules

History of Minnesota Local Sales Tax

In 1997, the sales tax advisory council—a group of legislators, administration staff, and representatives of the business community—recommended that the legislature adopt model statutory language for the imposition and administration of local sales taxes. The goal was to create consistency in the application of new and existing local taxes that would (1) ease the compliance costs for businesses located outside the taxing jurisdiction who were required to collect the local tax, and (2) simplify the Department of Revenue’s administration of these taxes.

The legislature enacted the proposed local sales tax rules in the 1997 session. It added language in 1998 and 1999 to incorporate some standards that the House and Senate tax committees had started to use in evaluating proposals for new local sales tax authority and to clarify some additional administration issues. Further changes were made during the 2003 session to make the law conform to the Streamlined Sales and Use Tax Agreement (SSUTA).1 In 2008 and 2010 changes were made to make it more difficult for local governments to promote local sales taxes. The additions are explained in the summary below.

Local sales tax rules are codified in Minnesota Statutes, section 297A.99.

The content of this and any related posts has been copied or adopted from the Minnesota House of Representatives Research Department’s Information Brief, Local Sales Taxes in Minnesota, written by legislative analyst Pat Dalton.

This is also part of a series of posts on local sales taxes in Minnesota.

1 The Streamlined Sales and Use Tax Agreement (SSUTA) is a voluntary agreement in which participating states simplify and standardize sales tax administration and definitions between states. Minnesota is a member. Remaining in compliance allows the state to collect sales tax revenues from certain out-of-state businesses that it would otherwise not collect due to nexus requirements.