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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 be amended to <br />immediately 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 />2017; 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 and the Remote <br />Transactions Parity Act, which would <br />provide congressional authority for states <br />that comply with the Streamlined Sales <br />and Use Tax Agreement to require <br />remote retailers to collect and remit state <br />sales taxes. <br />FF -10. Local Lodging Taxes <br />Issue: In 2011, the legislature amended <br />Minn. Stat. § 297A.61 to define <br />accommodation intermediaries and clarified <br />that their services are subject to the state <br />sales tax as part of the tax imposed on <br />lodging. Local lodging taxes collected by <br />the state for local units of government under <br />Minn. Stat. § 469.190, subd. 7 also clearly <br />apply to services provided by these <br />accommodation intermediaries since these <br />taxes are required under Minn Stat. § <br />270C.171 to use the definition for tax base <br />contained in the general sales tax statute. <br />Since 2011, some accommodation <br />intermediaries have not been collecting and <br />remitting locally -administered lodging taxes <br />based on the full cost of the accommodation <br />plus the accommodation intermediary <br />services, There are currently 120 cities and <br />towns that individually or jointly impose <br />lodging taxes for tourism purposes under <br />Minn. Stat. § 469.190. Another five cities <br />impose a lodging tax that is administered <br />locally under special law. Four local lodging <br />taxes are currently administered by the state. <br />Response: The League of Minnesota <br />Cities supports legislation that will clarify <br />that all lodging taxes, whether <br />administered by the state or administered <br />League of Minnesota Cities <br />2016 City Policies Page 99 <br />