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HF2973 (Legislative Session 94 (2025-2026))

State sales tax rate increased, expiration for certain laws applicable to local sales taxes provided, and revenue dedicated to local government aid distributions.

AI Generated Summary

Purpose of the Bill

The purpose of this bill is to adjust the state sales tax rate and modify the distribution of the revenue generated. It aims to increase local government aid by dedicating a portion of the sales tax revenue to such distributions.

Main Provisions

  • Increase in Sales Tax Rate: The bill amends the current tax laws to increase the state sales tax rate from 6.5% to 7%.
  • Allocation of Revenue: It proposes that the additional revenue generated from this increased sales tax be allocated specifically for local government aid.
  • Expiration of Laws Related to Local Sales Taxes: Certain existing laws concerning local sales taxes will have an expiration date, potentially impacting how local sales tax is applied and managed.

Significant Changes to Existing Law

  • Sales Tax Amendment: The most notable change is the increase in the sales tax from 6.5% to 7%, modifying section 297A.62, subdivision 1 of the Minnesota Statutes.
  • Commitment to Local Government Aid: By dedicating additional sales tax revenue to local government aid, the bill alters the usual allocation of these funds, emphasizing support for local governmental functions.

Relevant Terms

sales tax, local government aid, revenue distribution, tax rate increase, Minnesota Statutes, local sales taxes, taxation

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 31, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "None"
      ],
      "removed": [
        "None"
      ],
      "summary": "The bill modifies the state sales tax rate set forth in section 297A.62, subdivision 1.",
      "modified": [
        "Changes the sales tax rate from 6.5% to 7%."
      ]
    },
    "citation": "297A.62",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "None"
      ],
      "removed": [
        "None"
      ],
      "summary": "This section provides definitions related to retail sales.",
      "modified": [
        "The bill references this section for the definitions of terms related to retail sales."
      ]
    },
    "citation": "297A.61",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [
        "None"
      ],
      "removed": [
        "None"
      ],
      "summary": "This section details the requirements for obtaining a sales tax permit.",
      "modified": [
        "The reference indicates that persons making taxable sales must comply with permit regulations in this subdivision."
      ]
    },
    "citation": "297A.83",
    "subdivision": "subdivision 1"
  }
]

Sponsors