Moratorium Ends: Cities Must Follow Previous Process for Local Sales Tax

With the moratorium lifted, cities must again pass a resolution and follow the established process to pursue a local sales tax.

The Minnesota Legislature did not extend the local sales tax moratorium, which expired May 31, nor did it make changes to the approval process. As a result, cities must continue to follow the previous process to pursue a local sales tax.

Sales tax authority process overview

The first step is adopting a council resolution that details the proposed local sales tax, the projects it would fund, and documentation of each project’s “regional significance.” Cities must submit the resolution and supporting materials to chairs and ranking minority members of the House and Senate taxes committees by Jan. 31 of the year they are seeking the special law.

Next, cities must work with their legislators to secure passage of a special law authorizing the tax. After that, voters must approve the measure through a ballot initiative during a general election within two years. If the referendum passes, the Minnesota Department of Revenue requires 90 days’ notice before the tax can take effect.  

• For more information, access LMC’s memo on the process to obtain local sales tax authority.
• For questions about the process, contact the League’s intergovernmental relations (IGR) staff.

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