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S.F. No. 394 - Minneapolis lodging tax rate cap modification (as proposed to be amended by A-2)
Author: Senator Kari Dziedzic
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Date: February 12, 2019


Under general sales tax law, counties participating in a joint powers agreement may levy, in pertinent part, up to a 0.25% general sales tax to fund transportation improvements. Under that authority, the County Transit Improvement Board (CTIB) was formed, and the tax was known as the “CTIB tax.” In 2017, the CTIB was disbanded and the tax terminated. Under separate authority, a county may impose a transportation sales tax rate of up to 0.5%, which Hennepin County enacted beginning in October 2017.

The overall 13% limit under on taxes that may be imposed in Minneapolis is thus affected by the increased Hennepin County transportation tax rate. This bill modifies the limit on the maximum combined rate of Minneapolis lodging taxes, state general taxes, and any other local taxes to 13.875% to incorporate the 2017 changes that affected lodging taxes in Minneapolis.

Effective for sales and purchase made after September 30, 2019.

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