Laserfiche WebLink
valuation increase determined by the <br />assessor. <br />FF-8. Sales Tax on Local <br />Government Purchases <br />Issue: The local government sales tax <br />exemption enacted in 2013 and expanded in <br />2014 does not apply to all city purchases. <br />Some purchases for municipal enterprise <br />operations, such as liquor stores and golf <br />courses are excluded from the exemption. In <br />addition, in order to receive the sales tax <br />exemption on construction materials under <br />current law, cities must bid labor and <br />materials separately and also designate a <br />contractor to be a purchasing agent on <br />behalf of the city. The existing Department <br />of Revenue rules (MN Rules 8130.1200, <br />Subp. 3) are complex and the <br />implementation can be so complicated that it <br />can cost cities more money to implement <br />than they will save on the tax exemption. <br />Finally, although cities currently do not pay <br />the motor vehicle sales tax on marked police <br />vehicles or firefighting vehicles, other city <br />vehicles are not exempt from the motor <br />vehicle sales tax. <br />Response: In order to ensure that <br />taxpayers receive the full benefit of the <br />local government sales tax exemption: <br />a) The exemption should apply to all <br />purchases made by local units of <br />government; <br />b) The process to receive the exemption <br />for construction materials should be <br />simplified or converted into a refund <br />process; <br />c) The law should treat purchases by all <br />local units of governments the same, <br />including purchases made by special <br />taxing districts, joint powers entities, <br />or any other agency or <br />instrumentality of government that <br />will not be exempt until January 1, <br />2016; and <br />d) The exemption should be extended to <br />all local government purchases that <br />would otherwise be subject to the <br />motor vehicle sales tax in Minn. Stat. <br />ch. 297B. <br />FF-9. Taxation of Electronic <br />Commerce <br />Issue: Sales over the Internet and through <br />other electronic means are projected to <br />increase exponentially over the next several <br />years. Electronic transactions pose <br />significant tax -policy challenges because of <br />the difficulty of assigning a location to <br />electronic sales and because many Internet <br />goods are not tangible property. <br />Response: Federal tax policy should not <br />place main street businesses at a <br />competitive disadvantage to electronic <br />retailers, must not jeopardize repayment <br />of bonds backed by state and local sales <br />tax revenues, and should ensure stability <br />in state and local revenues. To address the <br />challenges created by the growth of <br />electronic commerce, the League of <br />Minnesota Cities supports the multi -state <br />effort to develop a streamlined sales tax <br />system. <br />The League also supports federal <br />legislation, such as the Marketplace <br />Fairness Act, which would provide <br />congressional authority for states that <br />comply with the Streamlined Sales and <br />Use Tax Agreement to require remote <br />retailers to collect and remit state sales <br />taxes. <br />FF-10. Online Travel Companies <br />and Local Hotel Occupancy Taxes <br />Issue: In the past, online travel companies <br />(OTCs) were collecting hotel occupancy <br />League of Minnesota Cities <br />2015 City Policies Page 98 <br />