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99-410ORIGINAL Presented By: Referred To: CouncilFile# ��y�0 Green Sheet # 24171 �� Committee Date: � 2 3 a WHEREAS, the 1993 Minnesota Legislature (Laws of 1993, Chapter 375, Article 9, Sec. 46) authorized s the City of Saint Paul to estabfish a 1/2 percent sales tax on sales within the City of Saint Paul; and 6 � WHEREAS, on June 29, 1993 the City Council of the City of Saint Paul approved a 1/2 percent sales s tax (CF 93-783) in accordance with state law; and 9 �o WHEREAS, state law requires local authority for a sales tax to now include a use tax, and 71 �z WHEf2EAS, the CF 93-783 specified oniy a sales tax and this resolution wilf specify a use tax be 13 also imposed as specified to conform to MSA 297A.48, and 14 75 16 WHEREAS, the imposition, administration, collection, and enforcement of this tax shall be governed by the provisions of Minnesota Statutes Section 297A.48, and 17 �a WHEREAS, this resolution further honors the exemptions for packing materials for moving �s household goods and materials used outside the city, and the advertising materials used out side so the city, now therefore be it 21 u xs za RESOLVED, that the 1/2 percent City of Saint Paul sales tax include a use tax for sales effective January 1, 2000. zs BE IT FURTHER RESOLVED, that an agreement be signed with the State Department of Revenue se to enforce this resolution. z� Requested by Department of: Yeas Nays Absent senenav Executive Administration - Financial Services Office Blakey � f Coleman " ./ By: \\ ��Y'+�"'_� fY ' ' !'Y'—� � Hamis � � �.,�.., _ �+ Adopted by Council: Date Adoption Certified by Council Secretary: � �.. � RESOLUTION OF SAINT PAUL, MlNNESOTA By Form pr ed by ( B Approv ayor By: SaiM Paul Buaget Office ( for Submission to Council: Wtca srvss> , � . Services Office RSON&PHONE 266-8553 CAUN W, AGFNDA BY (DA'i2) i1 OF SIGNAT[7RE 5-1-99 � C�KtI O I OEPAR'IT�[�i Ol ❑2 C[1YATfORNEY � auucss'c�c[ � MAYOR(OAASSi No. 24 171 �'y�� cavcouNC¢ � carccEaic FOR SIGNATURE) nrnoH v,FQ�Eo Approve sales taac to include use tax as per State of Minnesota s[awte 297A.48 nECO�.u.mmwnoxs: ayRO.�(w) W a�m(x) PERSONAL SERVICE CONTRACIS NNST ANSWF,R 1'HE FOLLOR'ING QUESITONS: eurwwc conuussioN _crvn. s&xv�ce conmuss�oH 7. Elzs this persoNS}m ever worked under a contract for this depazm��t? cmcoruarnEe _ 1ES NO q_srnt'E' _ 2. Has Uus person/firm evet been a ciry employee? nu�rwcrcouxr _ YES NO sueeoan wtucx cov�aca os�crnE� 3. Does this person/fiIm possess a slall not no�mally possessed by any cucrent city employee? YES NO (Ecplain all yes answers on separate sLeet and attach ro green sheet.) QJII'fA]RNG PROHLENy 15S[/E, OPPOR]VN11Y (R'h4 What Whc4 �ac. WhY} State law was changed to require local sales tases to conform to state sales and use taxes. Cities having only a sales taac aze required to include a use tax in their local enabling resoluti4ns. ADVNJIAGES ff APPROVSD: The city will be in compliance with state laws, and revenues from collections will modestly increase. DISADVANCAG£SIFAPPROVPD: - . � None �� ss ,.�.__.. -, � ,� ��,.� �� ; e �. - D6ADVANTAGPSOFNOTAPPROV6D: � �'�� The city will be out of compliance with state laws. � ;��;? 7 '.� �":;� �-� , � . a '[OTALAMO[M'[OFiRANSACC[ON_ O COSVREVENU£BUDGE'fEO(CIItCLEONE} YES NO tvrm�NCSOUace n/a wcnhs GL - XXX - XxXX�c - XXXX FA'wHCIA1INNORMwT10N: (5F3LAP� 43 FezsM1n+n� ,C';5'� � s »a.......... �_ - - �_._.o.._�e...........�....i�.,..�e.��...n..e..om.e�..i�....,.n�«.��e,.x.� N#AY � � e�� MINNESOTA Department of Revenue qq _ y�o Sales & Use Tax Division Mail Station 6330 St. Paul, MN 5514y6330 PLone(651) 296-2823 Fax (651)296-1938 April 5, 1999 City of St. Paul 240 City Hail 15 W Keliogg Boulevazd St. Paul, MN 55102 Attention: Mr. Bruce Eneelbrekt Budget Division Deaz Mr. Engelbrekt: Beginning January 1, 2000, all local sales taxes that were authorized before June 3, 1997, must conform to Minnesota Statute 297A.48, Local sales tax rules, copy enclosed. This model statute was enacted by the 1997 Legis]ature to create consistency in exemptions and appIication of local sales taxes. To meet the requirements of M. S. 297A.48, you must revise your resolution to incorQorate the following changes. • Include a statement that, "The imposition, administration, collection, and en- forcement of this tax shall be governed by the provisions of Minnesota Statutes Section 297A.48". • Enact a use tax. (297A.48, Subd. 4) • Honor the exemption for packing materials for moving household goods and materials used outside the city. • Honor the exemption for advertising materials used ouuide the city. You may revise your resolution anytime before January fust However, we ask that the changes be made effective January 1, 2000. We have a sample of an ordinance that you may use as a guide for wording. Call me if you would like a copy. Please send us a copy of your revised resolution after you've made these changes. Since many of the rules for administration of local sales taxes are now specifically listed in M. S. 297A.48, the "Agreement for Collection of Local Sales Tax" that is currently in effect with you needs to be updated. Enclosed is a draft of an updated agreement. Piease review the agreement and let us know if you have any comments or concems by Apri130, 1999. An equa! oyporruniry emptoyer TDD: (657) 297-2196 Ciry of St. Paul Page 2 Apri15, 1999 We will need the name and utIe of the person who wilt be si�ing the agreement Aiso, please let us know ihe number of signed original copies of the agreement you wi21 need. We will finalize the agreemeni after we hear from you. Please contact me if you have any questions conceming this letter or if you would like to meet with us to discuss these changes. Sincerely, �� Paul R. Blaisdell, Supervisor Sales and Use Tas Division Tazgeted Informauon Enclosure: M.S.297A.48 Agreement Draft An equal oppommiry employer TUD: (657) 297-2196 q9 -�t lo Minnesota Department of Revenue 1998 Chapter 297A; General Sales And Use Ta�es 297A.48 Local sales tag rules. Subdivision 1. Authorization; scope. (a) A political subdivision of tlus state may impose a general sales tax if pernutted by special law or if the subdivision enacted aad imposed the tax before the effective date of secrion 477A.016 and its predecessor provision. (b} This section govems the imposition of a genezal sales taY by the political subdivision. The provisions of this section preempt the provisions of any special law: (i) enacted before June 2, 1997, or (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law provision from this section's rules by reference. (c) This section does not apply to or preempt a sales taY on motor vehicles or a special excise tax on motor vehicies. Subd. 2. Tax base. (a) The tax applies to sales taxable under this chapter that occur within the political subdivision. (b) Taxable services are subject to a political subdivision's sales tax, if they aze performed either: (1) within the politicai subdivision, or (2) partly within and partly without the political subdivision and more of the service is performed within the political subdivision, based on the cost of performance. Subd. 3. Tax rate. (a) The taY rate is as specified in the special law authorization and as imposed by the political subdivision. (b) The full political subdivision rate applies to any sales that aze taxed at a state rate less than or more than the state general sales and use tax rate. Subd. 4. Use tax A compensating use tas applies, at the same rate as the sales tax, on the use, storage, distribution, or consumption of tangible personal properiy or taxable services. Subd.S. Eaemptions. (a) All goods or services that are otherwise exempt from taxation under this chapter aze exempt from a political subdivision's tas. (b) The gross receipts from the sale of tangible personal property that meets the requirement of section 297A.25, subdivision 5, aze exempt, except the qualification test applies based on the boundaries of the political subdivision instead of the state of Minnesota. (c) All mobile transportation equipment, and parts and accessories attached to or to be attached to the equipment aze exempt, if purchased by a holder of a motor cartier d'uect pay permit under section 297A.211. Subd. 6. Credit for other local taxes. Copyright 1998, State of Minnesota, Revisor of Statutes Minnesota Depaztrnent of Revenue 1998 Chapter 297A; General Sales And Use Tazes If a persoa paia sales or use tax to another political subdivision on Yangible personal property or another item subject to taY under this section, a eredit applies against the taY imposed under this section. The credit equals the tax the person paid to the other political subdivision for the item. Subd, 7. Enforcement; collection; and administration. (a) The commissioner of revenue shall collecY the taYes subject to Yhis section. The commissioner may collect the tax with the state sales and use t�. All tases under this section aze subject to the same penalUes, interest, and enforcement provisions as appiy to the state sales and use tas. (b} A request for a refund of state saies tas paid in excess of the amount of tax Iegally due includes a request for a refund of the political subdivision taxes paid on the goods or services. The commissioner must refund to the taxpayer the full amount of the political subdivision taxes paid on exempt sales or use. (c) A political subdivision that is collecting and administering its own sales and use t� before January I, 1998, may eiect to be exempt from tlus subdivision and subdivision 8. Subd. 8. Revenues; cost of collection. The commissioner shall remit the pmceeds of the tas, 2ess refunds and a pmportionate share of the cost of collection, at least quarterly, to the political subdivision. The cammissioner shall deduct from the proceeds remitted an amount that equals (1) the direct and induect costs of the department to administer, audit, and collect the politieal subdivision's ta�c, plus (2) the political subdivision's proportionate share of the indirect cost of administering alI taxes under this section. Subd. 9. Effective dates; notification. (a) A political subdivision may impose a tax under this section starting only on the fust day of a calendar quarter. A political subdivision may repeal a taa� under this section stopping only on the last day of a calendar quarter. (b) The political subdivision must notify the commissioner of revenue at least 90 days before imposing or repealing a taac under this section. Subd. 9a. Local resolution before application for authority. Before the goveming body of a politicat subdivision requests IegisIative approvat of a special law for a local sales taac thaY is administered under tivs section, it shall adopt a resolution indicating its approval of the t�. The resolution must include, at a minimum, infortnation on the proposed taY rate, how the revenues will be used, the total revenue that wiIl be raised before the ta7t expires, and the estimated length of time thaY Yhe tas will be in effect. . Subd.10. Application. This section applies to all local sales ta�ces authorized on or after 7une 2, 1997. Starting January 1, 2000, this section applies to all local sales taaces that were authorized before June 2, 1997. $istory: 1997 c 231 art 7 s 30; 1998 c 254 art 1 s 81, 82; 1998 c 389 art 8 s 20 Copyright 1998, State of Minnesot� Revisor of Sramtes DRAFT Agreement Between the Minnesota Department of Revenue and the City/County of for Collection of a Local Sales and Use Tax qq-y�v The Local Govemment and ihe Department of Revenue agree to the following conceming the adminish�ation of a local sales and use tax. Administ� and coilection The Department of Revenue will administer and collect the local sales and use taac as authorized under M. S. 297A.48. The administration and collection must foliow as closely as possible existing statutes (Minnesota Statutes, chapters 297A and 289A), rules (Chapter 8130), and administrative procedures used by the Department to administer and collect the Minnesota state sales and use taa�. Registration of vendors The Deparhnent of Revenue will handle registration of vendors. Zip codes for the local taY jurisdiction will be used to select and register vendors until some other method is found to be more accurate and cost effective. The Deparhnent wili also notify all sales tax permit holders about local taxes. This will be done at the time of registration, through newsletters, law change bulletins, and fact sheeu. The Local Government acknowledges that there is no cost effective way to identify specific vendors located outside the local ta.xing jurisdiction who aze required to be registered for the local tas. Identification of these vendors will be voluntary by vendor response to general mailings by the Department and ihrough other contacts the vendor has with the Departrnent. Publicity and education The Department of Revenue is responsible to educate vendors that are registered for state sales tax of their ongoing obligations to collect and remit local sales and use ta�tes. The Department is also responsible to reach others to inform them of their obligations to coilect and remit local sales and use taYes. The Local Govemment and the Department may work together to develop educational or administrative methods, using resources available, to enhance compliance. For example, the . Local Govert3ment may fiunish a tape containing license information to the Department so that a match can be made to detemune if all license holders aze properly registered and collecting ]ocat sales tas. DRAFT Collection Vendors wi$ remit local sales and use Taxes as part of their Minnesota Sales and Use Tax rehuns. Moneys collected by the Department will be deposited in the State Treasury and credited to a special account. The Department will draw from this account to recover Department costs as provided in this agreement, and to transmit coiiections to the Local Government. The Locai Government will accrue no interest on tlus account Transmittal of tax to ffie Local Govemment The Deparnnent will transmit the local sales and use taa�es reported on returns, to the Local Government, monthly through the automatic clearing house system. For each month of collection, two iransmittats will be made. The first will be appro�mately five business days after month end. The final transmittal will be appro�umately 40 days after month end. The Department will retain, from the final monthly payment, a fee for admutistering the local sales and uses taYes as provided in this ageement Reporting Whea the final monthly transmittal is made, a report will be sent to the T..ocal Government indicating the total amount of local sales and use tax reported, corresponding adjustments made , prior month corrections and adminis�ative fees retained. The Departrnent will give the Locai Govemment, on request, but no more than once a year, a report showing information about the local taa�es. Disclos�re The Department will give the Local Government a copy of Minnesota Statutes, chapter 270B, Tax Data, Classification And Disclosiue. The Local Government agrees that any informarion given to its officials and representatives in connection with sales and use taxes or audit information is subject to the secrecy provisions of this chapter. lnspection ofrecords and auditinformaSon The Local Government may inspect and audit ail data records relating to their locat tax, tha cost of collecvon of the taxes, and the performance by the Department under this Agreement. Reimbursement of costs The Department will review and adjust their direct and indirect costs for collecting and administering local sales and use ta�ces every two years as part of its biennial budget process. The Department will notify the Locat Government of the estimated cost for coilecriag and admuustering their local sales and use tax for each yeaz covered by the biennial budget by Juna 1�` of the year prior to the be�inning of the State's biennial budget 2 DRAFT Final fransmission c�q-Hl When a local tax ends, the Departrnent may retain 20 percent of gross receipts for the final month, to be used as a fund to make adjushnents or refunds. The portion of this fund that is not used for refunds or adjustments will be transmitted to the Local Govemment at the ciose of the period of limitations provided in M. S. 289A.40. If the funds are not sufficieni to cover refunds and adjustments, the Local Govemment must provide the Department with sufScient funding to process all closing adjustments. Annual meeting The Local Government and the Department may meet annually, at a mutually convenient time, to review performance under this a�eement and their mutual relationship in the adminish�ation of the local sales and use tas. Efiective date This agreement is eifective the day following imposition of the tas and supersedes any previous agreement. Mod�cations This agreement may be modified if the modification is in writing, signed by the Commissioner of Revenue and an authorized representative of the Local Government. Minnesota Department Of Revenue By: Date: Commissioner of Revenue Local Government Representative Signature Date: Titie ORIGINAL Presented By: Referred To: CouncilFile# ��y�0 Green Sheet # 24171 �� Committee Date: � 2 3 a WHEREAS, the 1993 Minnesota Legislature (Laws of 1993, Chapter 375, Article 9, Sec. 46) authorized s the City of Saint Paul to estabfish a 1/2 percent sales tax on sales within the City of Saint Paul; and 6 � WHEREAS, on June 29, 1993 the City Council of the City of Saint Paul approved a 1/2 percent sales s tax (CF 93-783) in accordance with state law; and 9 �o WHEREAS, state law requires local authority for a sales tax to now include a use tax, and 71 �z WHEf2EAS, the CF 93-783 specified oniy a sales tax and this resolution wilf specify a use tax be 13 also imposed as specified to conform to MSA 297A.48, and 14 75 16 WHEREAS, the imposition, administration, collection, and enforcement of this tax shall be governed by the provisions of Minnesota Statutes Section 297A.48, and 17 �a WHEREAS, this resolution further honors the exemptions for packing materials for moving �s household goods and materials used outside the city, and the advertising materials used out side so the city, now therefore be it 21 u xs za RESOLVED, that the 1/2 percent City of Saint Paul sales tax include a use tax for sales effective January 1, 2000. zs BE IT FURTHER RESOLVED, that an agreement be signed with the State Department of Revenue se to enforce this resolution. z� Requested by Department of: Yeas Nays Absent senenav Executive Administration - Financial Services Office Blakey � f Coleman " ./ By: \\ ��Y'+�"'_� fY ' ' !'Y'—� � Hamis � � �.,�.., _ �+ Adopted by Council: Date Adoption Certified by Council Secretary: � �.. � RESOLUTION OF SAINT PAUL, MlNNESOTA By Form pr ed by ( B Approv ayor By: SaiM Paul Buaget Office ( for Submission to Council: Wtca srvss> , � . Services Office RSON&PHONE 266-8553 CAUN W, AGFNDA BY (DA'i2) i1 OF SIGNAT[7RE 5-1-99 � C�KtI O I OEPAR'IT�[�i Ol ❑2 C[1YATfORNEY � auucss'c�c[ � MAYOR(OAASSi No. 24 171 �'y�� cavcouNC¢ � carccEaic FOR SIGNATURE) nrnoH v,FQ�Eo Approve sales taac to include use tax as per State of Minnesota s[awte 297A.48 nECO�.u.mmwnoxs: ayRO.�(w) W a�m(x) PERSONAL SERVICE CONTRACIS NNST ANSWF,R 1'HE FOLLOR'ING QUESITONS: eurwwc conuussioN _crvn. s&xv�ce conmuss�oH 7. Elzs this persoNS}m ever worked under a contract for this depazm��t? cmcoruarnEe _ 1ES NO q_srnt'E' _ 2. Has Uus person/firm evet been a ciry employee? nu�rwcrcouxr _ YES NO sueeoan wtucx cov�aca os�crnE� 3. Does this person/fiIm possess a slall not no�mally possessed by any cucrent city employee? YES NO (Ecplain all yes answers on separate sLeet and attach ro green sheet.) QJII'fA]RNG PROHLENy 15S[/E, OPPOR]VN11Y (R'h4 What Whc4 �ac. WhY} State law was changed to require local sales tases to conform to state sales and use taxes. Cities having only a sales taac aze required to include a use tax in their local enabling resoluti4ns. ADVNJIAGES ff APPROVSD: The city will be in compliance with state laws, and revenues from collections will modestly increase. DISADVANCAG£SIFAPPROVPD: - . � None �� ss ,.�.__.. -, � ,� ��,.� �� ; e �. - D6ADVANTAGPSOFNOTAPPROV6D: � �'�� The city will be out of compliance with state laws. � ;��;? 7 '.� �":;� �-� , � . a '[OTALAMO[M'[OFiRANSACC[ON_ O COSVREVENU£BUDGE'fEO(CIItCLEONE} YES NO tvrm�NCSOUace n/a wcnhs GL - XXX - XxXX�c - XXXX FA'wHCIA1INNORMwT10N: (5F3LAP� 43 FezsM1n+n� ,C';5'� � s »a.......... �_ - - �_._.o.._�e...........�....i�.,..�e.��...n..e..om.e�..i�....,.n�«.��e,.x.� N#AY � � e�� MINNESOTA Department of Revenue qq _ y�o Sales & Use Tax Division Mail Station 6330 St. Paul, MN 5514y6330 PLone(651) 296-2823 Fax (651)296-1938 April 5, 1999 City of St. Paul 240 City Hail 15 W Keliogg Boulevazd St. Paul, MN 55102 Attention: Mr. Bruce Eneelbrekt Budget Division Deaz Mr. Engelbrekt: Beginning January 1, 2000, all local sales taxes that were authorized before June 3, 1997, must conform to Minnesota Statute 297A.48, Local sales tax rules, copy enclosed. This model statute was enacted by the 1997 Legis]ature to create consistency in exemptions and appIication of local sales taxes. To meet the requirements of M. S. 297A.48, you must revise your resolution to incorQorate the following changes. • Include a statement that, "The imposition, administration, collection, and en- forcement of this tax shall be governed by the provisions of Minnesota Statutes Section 297A.48". • Enact a use tax. (297A.48, Subd. 4) • Honor the exemption for packing materials for moving household goods and materials used outside the city. • Honor the exemption for advertising materials used ouuide the city. You may revise your resolution anytime before January fust However, we ask that the changes be made effective January 1, 2000. We have a sample of an ordinance that you may use as a guide for wording. Call me if you would like a copy. Please send us a copy of your revised resolution after you've made these changes. Since many of the rules for administration of local sales taxes are now specifically listed in M. S. 297A.48, the "Agreement for Collection of Local Sales Tax" that is currently in effect with you needs to be updated. Enclosed is a draft of an updated agreement. Piease review the agreement and let us know if you have any comments or concems by Apri130, 1999. An equa! oyporruniry emptoyer TDD: (657) 297-2196 Ciry of St. Paul Page 2 Apri15, 1999 We will need the name and utIe of the person who wilt be si�ing the agreement Aiso, please let us know ihe number of signed original copies of the agreement you wi21 need. We will finalize the agreemeni after we hear from you. Please contact me if you have any questions conceming this letter or if you would like to meet with us to discuss these changes. Sincerely, �� Paul R. Blaisdell, Supervisor Sales and Use Tas Division Tazgeted Informauon Enclosure: M.S.297A.48 Agreement Draft An equal oppommiry employer TUD: (657) 297-2196 q9 -�t lo Minnesota Department of Revenue 1998 Chapter 297A; General Sales And Use Ta�es 297A.48 Local sales tag rules. Subdivision 1. Authorization; scope. (a) A political subdivision of tlus state may impose a general sales tax if pernutted by special law or if the subdivision enacted aad imposed the tax before the effective date of secrion 477A.016 and its predecessor provision. (b} This section govems the imposition of a genezal sales taY by the political subdivision. The provisions of this section preempt the provisions of any special law: (i) enacted before June 2, 1997, or (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law provision from this section's rules by reference. (c) This section does not apply to or preempt a sales taY on motor vehicles or a special excise tax on motor vehicies. Subd. 2. Tax base. (a) The tax applies to sales taxable under this chapter that occur within the political subdivision. (b) Taxable services are subject to a political subdivision's sales tax, if they aze performed either: (1) within the politicai subdivision, or (2) partly within and partly without the political subdivision and more of the service is performed within the political subdivision, based on the cost of performance. Subd. 3. Tax rate. (a) The taY rate is as specified in the special law authorization and as imposed by the political subdivision. (b) The full political subdivision rate applies to any sales that aze taxed at a state rate less than or more than the state general sales and use tax rate. Subd. 4. Use tax A compensating use tas applies, at the same rate as the sales tax, on the use, storage, distribution, or consumption of tangible personal properiy or taxable services. Subd.S. Eaemptions. (a) All goods or services that are otherwise exempt from taxation under this chapter aze exempt from a political subdivision's tas. (b) The gross receipts from the sale of tangible personal property that meets the requirement of section 297A.25, subdivision 5, aze exempt, except the qualification test applies based on the boundaries of the political subdivision instead of the state of Minnesota. (c) All mobile transportation equipment, and parts and accessories attached to or to be attached to the equipment aze exempt, if purchased by a holder of a motor cartier d'uect pay permit under section 297A.211. Subd. 6. Credit for other local taxes. Copyright 1998, State of Minnesota, Revisor of Statutes Minnesota Depaztrnent of Revenue 1998 Chapter 297A; General Sales And Use Tazes If a persoa paia sales or use tax to another political subdivision on Yangible personal property or another item subject to taY under this section, a eredit applies against the taY imposed under this section. The credit equals the tax the person paid to the other political subdivision for the item. Subd, 7. Enforcement; collection; and administration. (a) The commissioner of revenue shall collecY the taYes subject to Yhis section. The commissioner may collect the tax with the state sales and use t�. All tases under this section aze subject to the same penalUes, interest, and enforcement provisions as appiy to the state sales and use tas. (b} A request for a refund of state saies tas paid in excess of the amount of tax Iegally due includes a request for a refund of the political subdivision taxes paid on the goods or services. The commissioner must refund to the taxpayer the full amount of the political subdivision taxes paid on exempt sales or use. (c) A political subdivision that is collecting and administering its own sales and use t� before January I, 1998, may eiect to be exempt from tlus subdivision and subdivision 8. Subd. 8. Revenues; cost of collection. The commissioner shall remit the pmceeds of the tas, 2ess refunds and a pmportionate share of the cost of collection, at least quarterly, to the political subdivision. The cammissioner shall deduct from the proceeds remitted an amount that equals (1) the direct and induect costs of the department to administer, audit, and collect the politieal subdivision's ta�c, plus (2) the political subdivision's proportionate share of the indirect cost of administering alI taxes under this section. Subd. 9. Effective dates; notification. (a) A political subdivision may impose a tax under this section starting only on the fust day of a calendar quarter. A political subdivision may repeal a taa� under this section stopping only on the last day of a calendar quarter. (b) The political subdivision must notify the commissioner of revenue at least 90 days before imposing or repealing a taac under this section. Subd. 9a. Local resolution before application for authority. Before the goveming body of a politicat subdivision requests IegisIative approvat of a special law for a local sales taac thaY is administered under tivs section, it shall adopt a resolution indicating its approval of the t�. The resolution must include, at a minimum, infortnation on the proposed taY rate, how the revenues will be used, the total revenue that wiIl be raised before the ta7t expires, and the estimated length of time thaY Yhe tas will be in effect. . Subd.10. Application. This section applies to all local sales ta�ces authorized on or after 7une 2, 1997. Starting January 1, 2000, this section applies to all local sales taaces that were authorized before June 2, 1997. $istory: 1997 c 231 art 7 s 30; 1998 c 254 art 1 s 81, 82; 1998 c 389 art 8 s 20 Copyright 1998, State of Minnesot� Revisor of Sramtes DRAFT Agreement Between the Minnesota Department of Revenue and the City/County of for Collection of a Local Sales and Use Tax qq-y�v The Local Govemment and ihe Department of Revenue agree to the following conceming the adminish�ation of a local sales and use tax. Administ� and coilection The Department of Revenue will administer and collect the local sales and use taac as authorized under M. S. 297A.48. The administration and collection must foliow as closely as possible existing statutes (Minnesota Statutes, chapters 297A and 289A), rules (Chapter 8130), and administrative procedures used by the Department to administer and collect the Minnesota state sales and use taa�. Registration of vendors The Deparhnent of Revenue will handle registration of vendors. Zip codes for the local taY jurisdiction will be used to select and register vendors until some other method is found to be more accurate and cost effective. The Deparhnent wili also notify all sales tax permit holders about local taxes. This will be done at the time of registration, through newsletters, law change bulletins, and fact sheeu. The Local Government acknowledges that there is no cost effective way to identify specific vendors located outside the local ta.xing jurisdiction who aze required to be registered for the local tas. Identification of these vendors will be voluntary by vendor response to general mailings by the Department and ihrough other contacts the vendor has with the Departrnent. Publicity and education The Department of Revenue is responsible to educate vendors that are registered for state sales tax of their ongoing obligations to collect and remit local sales and use ta�tes. The Department is also responsible to reach others to inform them of their obligations to coilect and remit local sales and use taYes. The Local Govemment and the Department may work together to develop educational or administrative methods, using resources available, to enhance compliance. For example, the . Local Govert3ment may fiunish a tape containing license information to the Department so that a match can be made to detemune if all license holders aze properly registered and collecting ]ocat sales tas. DRAFT Collection Vendors wi$ remit local sales and use Taxes as part of their Minnesota Sales and Use Tax rehuns. Moneys collected by the Department will be deposited in the State Treasury and credited to a special account. The Department will draw from this account to recover Department costs as provided in this agreement, and to transmit coiiections to the Local Government. The Locai Government will accrue no interest on tlus account Transmittal of tax to ffie Local Govemment The Deparnnent will transmit the local sales and use taa�es reported on returns, to the Local Government, monthly through the automatic clearing house system. For each month of collection, two iransmittats will be made. The first will be appro�mately five business days after month end. The final transmittal will be appro�umately 40 days after month end. The Department will retain, from the final monthly payment, a fee for admutistering the local sales and uses taYes as provided in this ageement Reporting Whea the final monthly transmittal is made, a report will be sent to the T..ocal Government indicating the total amount of local sales and use tax reported, corresponding adjustments made , prior month corrections and adminis�ative fees retained. The Departrnent will give the Locai Govemment, on request, but no more than once a year, a report showing information about the local taa�es. Disclos�re The Department will give the Local Government a copy of Minnesota Statutes, chapter 270B, Tax Data, Classification And Disclosiue. The Local Government agrees that any informarion given to its officials and representatives in connection with sales and use taxes or audit information is subject to the secrecy provisions of this chapter. lnspection ofrecords and auditinformaSon The Local Government may inspect and audit ail data records relating to their locat tax, tha cost of collecvon of the taxes, and the performance by the Department under this Agreement. Reimbursement of costs The Department will review and adjust their direct and indirect costs for collecting and administering local sales and use ta�ces every two years as part of its biennial budget process. The Department will notify the Locat Government of the estimated cost for coilecriag and admuustering their local sales and use tax for each yeaz covered by the biennial budget by Juna 1�` of the year prior to the be�inning of the State's biennial budget 2 DRAFT Final fransmission c�q-Hl When a local tax ends, the Departrnent may retain 20 percent of gross receipts for the final month, to be used as a fund to make adjushnents or refunds. The portion of this fund that is not used for refunds or adjustments will be transmitted to the Local Govemment at the ciose of the period of limitations provided in M. S. 289A.40. If the funds are not sufficieni to cover refunds and adjustments, the Local Govemment must provide the Department with sufScient funding to process all closing adjustments. Annual meeting The Local Government and the Department may meet annually, at a mutually convenient time, to review performance under this a�eement and their mutual relationship in the adminish�ation of the local sales and use tas. Efiective date This agreement is eifective the day following imposition of the tas and supersedes any previous agreement. Mod�cations This agreement may be modified if the modification is in writing, signed by the Commissioner of Revenue and an authorized representative of the Local Government. Minnesota Department Of Revenue By: Date: Commissioner of Revenue Local Government Representative Signature Date: Titie ORIGINAL Presented By: Referred To: CouncilFile# ��y�0 Green Sheet # 24171 �� Committee Date: � 2 3 a WHEREAS, the 1993 Minnesota Legislature (Laws of 1993, Chapter 375, Article 9, Sec. 46) authorized s the City of Saint Paul to estabfish a 1/2 percent sales tax on sales within the City of Saint Paul; and 6 � WHEREAS, on June 29, 1993 the City Council of the City of Saint Paul approved a 1/2 percent sales s tax (CF 93-783) in accordance with state law; and 9 �o WHEREAS, state law requires local authority for a sales tax to now include a use tax, and 71 �z WHEf2EAS, the CF 93-783 specified oniy a sales tax and this resolution wilf specify a use tax be 13 also imposed as specified to conform to MSA 297A.48, and 14 75 16 WHEREAS, the imposition, administration, collection, and enforcement of this tax shall be governed by the provisions of Minnesota Statutes Section 297A.48, and 17 �a WHEREAS, this resolution further honors the exemptions for packing materials for moving �s household goods and materials used outside the city, and the advertising materials used out side so the city, now therefore be it 21 u xs za RESOLVED, that the 1/2 percent City of Saint Paul sales tax include a use tax for sales effective January 1, 2000. zs BE IT FURTHER RESOLVED, that an agreement be signed with the State Department of Revenue se to enforce this resolution. z� Requested by Department of: Yeas Nays Absent senenav Executive Administration - Financial Services Office Blakey � f Coleman " ./ By: \\ ��Y'+�"'_� fY ' ' !'Y'—� � Hamis � � �.,�.., _ �+ Adopted by Council: Date Adoption Certified by Council Secretary: � �.. � RESOLUTION OF SAINT PAUL, MlNNESOTA By Form pr ed by ( B Approv ayor By: SaiM Paul Buaget Office ( for Submission to Council: Wtca srvss> , � . Services Office RSON&PHONE 266-8553 CAUN W, AGFNDA BY (DA'i2) i1 OF SIGNAT[7RE 5-1-99 � C�KtI O I OEPAR'IT�[�i Ol ❑2 C[1YATfORNEY � auucss'c�c[ � MAYOR(OAASSi No. 24 171 �'y�� cavcouNC¢ � carccEaic FOR SIGNATURE) nrnoH v,FQ�Eo Approve sales taac to include use tax as per State of Minnesota s[awte 297A.48 nECO�.u.mmwnoxs: ayRO.�(w) W a�m(x) PERSONAL SERVICE CONTRACIS NNST ANSWF,R 1'HE FOLLOR'ING QUESITONS: eurwwc conuussioN _crvn. s&xv�ce conmuss�oH 7. Elzs this persoNS}m ever worked under a contract for this depazm��t? cmcoruarnEe _ 1ES NO q_srnt'E' _ 2. Has Uus person/firm evet been a ciry employee? nu�rwcrcouxr _ YES NO sueeoan wtucx cov�aca os�crnE� 3. Does this person/fiIm possess a slall not no�mally possessed by any cucrent city employee? YES NO (Ecplain all yes answers on separate sLeet and attach ro green sheet.) QJII'fA]RNG PROHLENy 15S[/E, OPPOR]VN11Y (R'h4 What Whc4 �ac. WhY} State law was changed to require local sales tases to conform to state sales and use taxes. Cities having only a sales taac aze required to include a use tax in their local enabling resoluti4ns. ADVNJIAGES ff APPROVSD: The city will be in compliance with state laws, and revenues from collections will modestly increase. DISADVANCAG£SIFAPPROVPD: - . � None �� ss ,.�.__.. -, � ,� ��,.� �� ; e �. - D6ADVANTAGPSOFNOTAPPROV6D: � �'�� The city will be out of compliance with state laws. � ;��;? 7 '.� �":;� �-� , � . a '[OTALAMO[M'[OFiRANSACC[ON_ O COSVREVENU£BUDGE'fEO(CIItCLEONE} YES NO tvrm�NCSOUace n/a wcnhs GL - XXX - XxXX�c - XXXX FA'wHCIA1INNORMwT10N: (5F3LAP� 43 FezsM1n+n� ,C';5'� � s »a.......... �_ - - �_._.o.._�e...........�....i�.,..�e.��...n..e..om.e�..i�....,.n�«.��e,.x.� N#AY � � e�� MINNESOTA Department of Revenue qq _ y�o Sales & Use Tax Division Mail Station 6330 St. Paul, MN 5514y6330 PLone(651) 296-2823 Fax (651)296-1938 April 5, 1999 City of St. Paul 240 City Hail 15 W Keliogg Boulevazd St. Paul, MN 55102 Attention: Mr. Bruce Eneelbrekt Budget Division Deaz Mr. Engelbrekt: Beginning January 1, 2000, all local sales taxes that were authorized before June 3, 1997, must conform to Minnesota Statute 297A.48, Local sales tax rules, copy enclosed. This model statute was enacted by the 1997 Legis]ature to create consistency in exemptions and appIication of local sales taxes. To meet the requirements of M. S. 297A.48, you must revise your resolution to incorQorate the following changes. • Include a statement that, "The imposition, administration, collection, and en- forcement of this tax shall be governed by the provisions of Minnesota Statutes Section 297A.48". • Enact a use tax. (297A.48, Subd. 4) • Honor the exemption for packing materials for moving household goods and materials used outside the city. • Honor the exemption for advertising materials used ouuide the city. You may revise your resolution anytime before January fust However, we ask that the changes be made effective January 1, 2000. We have a sample of an ordinance that you may use as a guide for wording. Call me if you would like a copy. Please send us a copy of your revised resolution after you've made these changes. Since many of the rules for administration of local sales taxes are now specifically listed in M. S. 297A.48, the "Agreement for Collection of Local Sales Tax" that is currently in effect with you needs to be updated. Enclosed is a draft of an updated agreement. Piease review the agreement and let us know if you have any comments or concems by Apri130, 1999. An equa! oyporruniry emptoyer TDD: (657) 297-2196 Ciry of St. Paul Page 2 Apri15, 1999 We will need the name and utIe of the person who wilt be si�ing the agreement Aiso, please let us know ihe number of signed original copies of the agreement you wi21 need. We will finalize the agreemeni after we hear from you. Please contact me if you have any questions conceming this letter or if you would like to meet with us to discuss these changes. Sincerely, �� Paul R. Blaisdell, Supervisor Sales and Use Tas Division Tazgeted Informauon Enclosure: M.S.297A.48 Agreement Draft An equal oppommiry employer TUD: (657) 297-2196 q9 -�t lo Minnesota Department of Revenue 1998 Chapter 297A; General Sales And Use Ta�es 297A.48 Local sales tag rules. Subdivision 1. Authorization; scope. (a) A political subdivision of tlus state may impose a general sales tax if pernutted by special law or if the subdivision enacted aad imposed the tax before the effective date of secrion 477A.016 and its predecessor provision. (b} This section govems the imposition of a genezal sales taY by the political subdivision. The provisions of this section preempt the provisions of any special law: (i) enacted before June 2, 1997, or (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law provision from this section's rules by reference. (c) This section does not apply to or preempt a sales taY on motor vehicles or a special excise tax on motor vehicies. Subd. 2. Tax base. (a) The tax applies to sales taxable under this chapter that occur within the political subdivision. (b) Taxable services are subject to a political subdivision's sales tax, if they aze performed either: (1) within the politicai subdivision, or (2) partly within and partly without the political subdivision and more of the service is performed within the political subdivision, based on the cost of performance. Subd. 3. Tax rate. (a) The taY rate is as specified in the special law authorization and as imposed by the political subdivision. (b) The full political subdivision rate applies to any sales that aze taxed at a state rate less than or more than the state general sales and use tax rate. Subd. 4. Use tax A compensating use tas applies, at the same rate as the sales tax, on the use, storage, distribution, or consumption of tangible personal properiy or taxable services. Subd.S. Eaemptions. (a) All goods or services that are otherwise exempt from taxation under this chapter aze exempt from a political subdivision's tas. (b) The gross receipts from the sale of tangible personal property that meets the requirement of section 297A.25, subdivision 5, aze exempt, except the qualification test applies based on the boundaries of the political subdivision instead of the state of Minnesota. (c) All mobile transportation equipment, and parts and accessories attached to or to be attached to the equipment aze exempt, if purchased by a holder of a motor cartier d'uect pay permit under section 297A.211. Subd. 6. Credit for other local taxes. Copyright 1998, State of Minnesota, Revisor of Statutes Minnesota Depaztrnent of Revenue 1998 Chapter 297A; General Sales And Use Tazes If a persoa paia sales or use tax to another political subdivision on Yangible personal property or another item subject to taY under this section, a eredit applies against the taY imposed under this section. The credit equals the tax the person paid to the other political subdivision for the item. Subd, 7. Enforcement; collection; and administration. (a) The commissioner of revenue shall collecY the taYes subject to Yhis section. The commissioner may collect the tax with the state sales and use t�. All tases under this section aze subject to the same penalUes, interest, and enforcement provisions as appiy to the state sales and use tas. (b} A request for a refund of state saies tas paid in excess of the amount of tax Iegally due includes a request for a refund of the political subdivision taxes paid on the goods or services. The commissioner must refund to the taxpayer the full amount of the political subdivision taxes paid on exempt sales or use. (c) A political subdivision that is collecting and administering its own sales and use t� before January I, 1998, may eiect to be exempt from tlus subdivision and subdivision 8. Subd. 8. Revenues; cost of collection. The commissioner shall remit the pmceeds of the tas, 2ess refunds and a pmportionate share of the cost of collection, at least quarterly, to the political subdivision. The cammissioner shall deduct from the proceeds remitted an amount that equals (1) the direct and induect costs of the department to administer, audit, and collect the politieal subdivision's ta�c, plus (2) the political subdivision's proportionate share of the indirect cost of administering alI taxes under this section. Subd. 9. Effective dates; notification. (a) A political subdivision may impose a tax under this section starting only on the fust day of a calendar quarter. A political subdivision may repeal a taa� under this section stopping only on the last day of a calendar quarter. (b) The political subdivision must notify the commissioner of revenue at least 90 days before imposing or repealing a taac under this section. Subd. 9a. Local resolution before application for authority. Before the goveming body of a politicat subdivision requests IegisIative approvat of a special law for a local sales taac thaY is administered under tivs section, it shall adopt a resolution indicating its approval of the t�. The resolution must include, at a minimum, infortnation on the proposed taY rate, how the revenues will be used, the total revenue that wiIl be raised before the ta7t expires, and the estimated length of time thaY Yhe tas will be in effect. . Subd.10. Application. This section applies to all local sales ta�ces authorized on or after 7une 2, 1997. Starting January 1, 2000, this section applies to all local sales taaces that were authorized before June 2, 1997. $istory: 1997 c 231 art 7 s 30; 1998 c 254 art 1 s 81, 82; 1998 c 389 art 8 s 20 Copyright 1998, State of Minnesot� Revisor of Sramtes DRAFT Agreement Between the Minnesota Department of Revenue and the City/County of for Collection of a Local Sales and Use Tax qq-y�v The Local Govemment and ihe Department of Revenue agree to the following conceming the adminish�ation of a local sales and use tax. Administ� and coilection The Department of Revenue will administer and collect the local sales and use taac as authorized under M. S. 297A.48. The administration and collection must foliow as closely as possible existing statutes (Minnesota Statutes, chapters 297A and 289A), rules (Chapter 8130), and administrative procedures used by the Department to administer and collect the Minnesota state sales and use taa�. Registration of vendors The Deparhnent of Revenue will handle registration of vendors. Zip codes for the local taY jurisdiction will be used to select and register vendors until some other method is found to be more accurate and cost effective. The Deparhnent wili also notify all sales tax permit holders about local taxes. This will be done at the time of registration, through newsletters, law change bulletins, and fact sheeu. The Local Government acknowledges that there is no cost effective way to identify specific vendors located outside the local ta.xing jurisdiction who aze required to be registered for the local tas. Identification of these vendors will be voluntary by vendor response to general mailings by the Department and ihrough other contacts the vendor has with the Departrnent. Publicity and education The Department of Revenue is responsible to educate vendors that are registered for state sales tax of their ongoing obligations to collect and remit local sales and use ta�tes. The Department is also responsible to reach others to inform them of their obligations to coilect and remit local sales and use taYes. The Local Govemment and the Department may work together to develop educational or administrative methods, using resources available, to enhance compliance. For example, the . Local Govert3ment may fiunish a tape containing license information to the Department so that a match can be made to detemune if all license holders aze properly registered and collecting ]ocat sales tas. DRAFT Collection Vendors wi$ remit local sales and use Taxes as part of their Minnesota Sales and Use Tax rehuns. Moneys collected by the Department will be deposited in the State Treasury and credited to a special account. The Department will draw from this account to recover Department costs as provided in this agreement, and to transmit coiiections to the Local Government. The Locai Government will accrue no interest on tlus account Transmittal of tax to ffie Local Govemment The Deparnnent will transmit the local sales and use taa�es reported on returns, to the Local Government, monthly through the automatic clearing house system. For each month of collection, two iransmittats will be made. The first will be appro�mately five business days after month end. The final transmittal will be appro�umately 40 days after month end. The Department will retain, from the final monthly payment, a fee for admutistering the local sales and uses taYes as provided in this ageement Reporting Whea the final monthly transmittal is made, a report will be sent to the T..ocal Government indicating the total amount of local sales and use tax reported, corresponding adjustments made , prior month corrections and adminis�ative fees retained. The Departrnent will give the Locai Govemment, on request, but no more than once a year, a report showing information about the local taa�es. Disclos�re The Department will give the Local Government a copy of Minnesota Statutes, chapter 270B, Tax Data, Classification And Disclosiue. The Local Government agrees that any informarion given to its officials and representatives in connection with sales and use taxes or audit information is subject to the secrecy provisions of this chapter. lnspection ofrecords and auditinformaSon The Local Government may inspect and audit ail data records relating to their locat tax, tha cost of collecvon of the taxes, and the performance by the Department under this Agreement. Reimbursement of costs The Department will review and adjust their direct and indirect costs for collecting and administering local sales and use ta�ces every two years as part of its biennial budget process. The Department will notify the Locat Government of the estimated cost for coilecriag and admuustering their local sales and use tax for each yeaz covered by the biennial budget by Juna 1�` of the year prior to the be�inning of the State's biennial budget 2 DRAFT Final fransmission c�q-Hl When a local tax ends, the Departrnent may retain 20 percent of gross receipts for the final month, to be used as a fund to make adjushnents or refunds. The portion of this fund that is not used for refunds or adjustments will be transmitted to the Local Govemment at the ciose of the period of limitations provided in M. S. 289A.40. If the funds are not sufficieni to cover refunds and adjustments, the Local Govemment must provide the Department with sufScient funding to process all closing adjustments. Annual meeting The Local Government and the Department may meet annually, at a mutually convenient time, to review performance under this a�eement and their mutual relationship in the adminish�ation of the local sales and use tas. Efiective date This agreement is eifective the day following imposition of the tas and supersedes any previous agreement. Mod�cations This agreement may be modified if the modification is in writing, signed by the Commissioner of Revenue and an authorized representative of the Local Government. Minnesota Department Of Revenue By: Date: Commissioner of Revenue Local Government Representative Signature Date: Titie