or 
lines to the right of the URL bar at the top of your browser
House Reviews Proposal To Expand City Sales Tax Authority
The bill would allow cities to enact local sales taxes approved by voters without legislative approval.
On April 9, the House Taxes Committee heard HF 3027, a proposal that would allow cities to seek voter approval for a local sales tax to fund a regional project without first obtaining special legislation. The proposal, sponsored by House Taxes Committee Co-Chair Rep. Aisha Gomez (DFL-Minneapolis), was laid over for possible inclusion in the omnibus tax bill.
The House bill differs from a similar bill in the Senate, SF 375, sponsored by Senate Taxes Committee Chair Sen. Ann Rest (DFL–New Hope). Both bills would permit cities to fund specific regional projects and require the creation of a local equalization account to share revenue with neighboring cities. However, the House version includes community centers as eligible projects and requires that 15% of collected tax revenue be placed into the equalization account.
Beth Johnston testified in support of the proposal on behalf of the League, emphasizing the importance of giving cities general authority to enact local sales taxes. The League will continue to work with the bills’ sponsors to ensure the final legislation meets city needs and provides equal opportunity for all communities.
Your next step
Contact your legislators to express support for giving cities the authority to enact a local sales tax without requiring special legislative approval. Share how this flexibility would improve your city’s ability to plan and budget for future projects.
LMC staff take
The 2023 tax bill included a two-year moratorium on submitting local sales tax proposals to the Legislature and established a task force to review the local sales tax process. Without legislative action this session, the moratorium will expire and cities can return to requesting special legislation to allow their city to enact a local sales tax. The League is advocating for a version of this bill to be included in the final tax bill to eliminate that step and streamline the process for cities.