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Transportation Sales Tax

 

The Transportation Sales Tax is a 0.5 % (half of one percent) sales tax that will raise an estimate $10.5 million annually to be invested exclusively in transportation-related projects. More than 50 projects have been identified throughout the County, which will be funded at least in part by this tax revenue during 2015 and 2016.

The County has identified $642 million of transportation-related projects. The sales tax will accelerate how quickly we're able to address these transportation needs. You can read the complete Transportation Improvement Plan here

To further jump start the progress on the County's roads and bridges, the County Board has given preliminary approval to a $40 million sale of general obligation capital improvement bonds. These bonds will be paid off completely with revenue from the sales tax, not from property taxes. Learn more here.


Other documents you may find helpful:
 Powerpoint presentation from Public Hearings
 Map of bridges to be addressed through the Improvement Plan
 Map of County Road Improvement Projects
 Map of Gravel Road Improvement Projects (GRIP)

From the Department of Revenue:
 Cover letter to businesses regarding sales/use tax
 Sales/use tax fact sheet

Business owners/managers with questions about collecting the tax should contact the Minnesota Department of Revenue Helpline at 651-296-6181 or 1-800-657-3777 or email salesuse.tax@state.mn.us


Why is this tax needed? St. Louis County has 3,000 miles of roads - half are paved, the other half gravel. The county also is responsible for 602 bridges. Currently, a third of the county's paved roads (500 miles) are in very poor condition, and 123 bridges are considered deficient.

We're already paying property tax and a gas tax. Shouldn't that be enough? In a perfect world, it would be enough, but the reality is, it's not. Counties receive only a portion of the gas tax money collected, and those dollars can only be applied towards County State Aid Highways, of which St. Louis County has 1,600 miles. That leaves 1,400 miles of County Roads that are supported only through the property taxes paid by the county's 200,000 residents.

Why raise the money through a sales tax? A half percent sales tax will raise an estimated $10.5 million each year. To raise this much money through property taxes would be the equivalent of a 9.3% levy increase. Doing that would force St. Louis County property owners to foot 100% of the costs, even though many non-residents travel on our vast road network. To collect the money through a sales tax means approximately a third of the money will be paid by non-residents, the people who drive in our county to work, visit and shop.

I'm a business owner. What do I need to know to collect this tax?
The Minnesota Department of Revenue has sent an informational letter to all businesses in the county. To calculate the total tax due on a purchase: 
1. Add the 6.875 percent state sales tax rate and the 0.5 percent St. Louis County transit rate.
2. Add any other local taxes that apply.
3. Apply the combined 7.375 percent rate (plus other local taxes) to the sales price. 
4. Round the total to the nearest full cent. 

How do I know this money will really go toward transportation projects? The state legislation that enabled counties to enact a sales tax requires the revenue raised be used specifically for transportation-related projects. St. Louis County would invest this sales tax revenue as follows:
  • $7 million - improve the pavements in the poorest condition, and applying preventative maintenance that's proven to extend the life of a road.
  • $2 million - bridge projects
  • $1 million - safety and multi-modal projects, including hiking, bike and other trails, and Safe Routes to School programs
  • $500,000 - boost the county's work toward its Gravel Road Investment Plan

When will the tax go into effect, and when will I see projects paid for by it? The tax goes into effect April 1, 2015, and Public Works will begin sales-tax funded projects within just a few months - starting in the summer of 2015.