Transportation Local Sales Taxes Authorized by Statute in Minnesota

In 2008, the legislature enacted two new statutes to allow counties to impose local sales taxes to help fund transportation. In the Twin Cities seven-county metropolitan area, a county may join the Metropolitan Transportation Area, which imposes a tax in the area to fund transit projects. The remaining 80 counties in the state, plus any metropolitan area county not joining the Metropolitan Transit Area, may impose a tax singly or as part of a joint powers agreement to fund a specified transportation project.

Metropolitan Transportation Area Sales Tax

Anoka, Dakota, Hennepin, Ramsey, and Washington counties, by resolution of their county boards, joined the Metropolitan Transportation Area joint powers agreement. Carver and Scott counties, although eligible, did not join the agreement.

A 0.25 percent local sales tax is imposed in the counties that are part of the joint powers agreement. The tax does not expire unless the county withdraws from the joint powers agreement. The revenues raised must be used for studies, property acquisition, capital projects, and operating assistance for transit projects.7 Minn. Stat. § 297A.992.

Greater Minnesota Transportation Sales and Use Tax

Any county that is not part of the Metropolitan Transportation Area may singly or through a joint powers agreement, impose a local sales and use tax of up to one-half of 1 percent and a $20 excise tax on commercial sales of motor vehicles to fund a transportation project. In order to impose the tax, the county or counties must specify a project to be funded by the proceeds and get voter approval in each of the included counties at a general election. The tax expires when the specific project is completed. Currently no county has imposed a local tax under this provision. Minn. Stat. § 297A.993.

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.

7 For more detailed information on the structure and operation of the board and use of the sales tax revenues, please consult the House Research Information Brief 2008 Transportation Finance Legislation: Laws 2008, Chapter 152, pp. 22-24.