Purpose

• Authorizes the city of Wayzata to create a local food and beverage tax. The tax would be up to 1% of the gross receipts from sales of food and beverages inside the city limits. It includes on-sale of intoxicating liquor and fermented malt beverages.

• The authority is provided despite other state or local laws to allow Wayzata to adopt this tax by ordinance.

Key Provisions

• Tax scope: Up to 1% of gross receipts on all sales of food and beverages by restaurants or places of refreshment within Wayzata. The exact definition of “food and beverages” and “places of refreshment” can be set by the city’s resolution.

• Eligible uses of tax proceeds: The money collected can be used to pay for:

  • Operation, maintenance, and capital improvements for city parks.
  • Operation and capital improvements related to public safety.
  • Costs related to downtown business attraction and retention.

• Capital expenses: Proceeds may also be used to secure or pay debt service on bonds or other obligations issued to finance capital improvements for city parks or public safety facilities.

Administration and Enforcement

• Collection option: If the city chooses, Wayzata may enter into an agreement with the Minnesota Department of Revenue to administer, collect, and enforce the tax.

• State rules if collected by the state: If the Department of Revenue collects the tax, the terms of Minnesota Statutes section 297A.99 apply for collection, administration, and enforcement.

Relationship to Existing Law and Changes

• This bill creates a new, local tax authority for Wayzata that can operate alongside existing state and local tax rules. It explicitly states that the city may override conflicting provisions in order to impose this tax by ordinance.

• The intended effect is to provide a dedicated funding source for parks, public safety, and downtown economic development, funded by a tax on food and beverages sold within the city.

Summary of Impacts

• Financial impact: Creates a new local revenue stream of up to 1% of gross receipts from food and beverage sales in Wayzata.
• Policy impact: Directs funds to parks, public safety, and efforts to attract and retain downtown businesses.
• Administrative impact: The city can manage the tax itself or have the state administer and collect it, depending on an agreement with the Department of Revenue.

Relevant Terms - Wayzata, food and beverage tax, local sales tax, gross receipts, restaurant, place of refreshment, intoxicating liquor, fermented malt beverages, parks, public safety, downtown business attraction and retention, capital improvements, debt service, bonds, Minnesota Department of Revenue, Minnesota Statutes, 297A.99, ordinance, administration, collection.