Item Description:
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Neg Agmt PR00005705 with MN Dept of Revenue for administration, collection, and enforcement of Hennepin County local sales taxes
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Resolution:
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BE IT RESOLVED, that the County Administrator authorize Agreement PR00005705 with the Minnesota Department of Revenue for the administration, collection, and enforcement of Hennepin County local sales, use, and excise taxes; and that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the agreement on behalf of the County.
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Background:
State law requires the MN Department of Revenue (the “Department”) to administer, collect, and enforce all local sales taxes (Minn. Stat. 297A.99, Local Sales Taxes). The statute also requires that the Department deducts its costs of administration from the gross tax collections, prior to remitting tax proceeds to the county (Minn. Stat. 297A.99, subd. 11). Both Ordinance 26 imposing the 0.15% ballpark sales tax, and Resolution 17-0207 imposing the 0.5% county transportation sales tax, include authorization for the Department to administer, collect, and enforce Hennepin County’s local sales taxes. Accordingly, Hennepin County has entered into multiple administrative agreements with the Department that specify the calculation of the administrative costs that are deducted from the tax collections. The most recent agreement is A177859, which became effective on July 1, 2017.
In December 2022, the Department sent Hennepin County a letter providing notice that the Department planned to update certain provisions of the agreement for local sales tax administration. Resolution 23-0405 negotiating the agreement was approved by the Hennepin County Board of Commissioners, but the contract was never signed because the terms were still being discussed. This agreement will supersede any previous agreement with the Department.
Current Request: This resolution would authorize negotiation of Agreement PR00005705, with the Minnesota Department of Revenue, for administration, collection and enforcement of Hennepin County’s 0.15% ballpark sales tax and the 0.5% county transportation sales tax.
Impact/Outcomes: Compliance with statutory requirements for administration of local sales taxes by the MN Department of Revenue.
recommendation
Recommendation from County Administrator: Recommend Approval