HF4701
Taylor Falls authorized to impose local sales and use tax.
Legislative Session 94 (2025-2026)
Related bill: SF4724
AI Generated Summary
Purpose
- Allow the city of Taylors Falls to establish a local sales and use tax of 0.5% (one-half percent) to fund specific city projects, but only if voters approve at an election.
Key Provisions
- Local tax authorization: The city can impose a 0.5% sales and use tax for the projects listed, in addition to any other local taxes, and subject to the same voter-approval rules used for similar local taxes.
- Projects funded: Revenue from the tax must be used to pay for:
- Community center improvements
- Development and improvements to the Taylors Falls River Walk and related trail system
- Development of a town square
- Costs related to issuing bonds to finance these projects
- Administration and collection: Proceeds must cover the costs of collecting and administering the tax, plus the project-related costs and bond issuance costs.
- Voter approval: Projects require voter approval as described in state law; the tax itself is conditioned on this approval.
Funding and Bonding
- Bond authority: The city may issue bonds under state law (Chapter 475) to finance all or part of the project costs.
- Bond cap: The total principal of bonds may not exceed $2,000,000, plus any costs of issuing the bonds.
- Pledge of funds: Bonds can be paid from the tax revenue or from other city money, and are not limited by some standard debt rules.
- Debt limits and levies: Bond debt is not counted toward the usual city debt limits, and the regular tax levy to pay debt is not subject to certain levy restrictions.
- Bond approval: A separate voter election to approve the bonds is not required, though project approval by voters is required under other statutes.
Tax Termination and Surplus
- Duration: The tax expires at the earlier of 20 years after first imposition or when funds are enough to cover all approved project costs and bond costs, including interest.
- Surplus funds: Any money left after paying approved costs must go to the city’s general fund.
- Early termination: The city can terminate the tax earlier by ordinance.
Administration and Compliance
- Compliance framework: The tax is governed by the same general rules that apply to local sales taxes under state law, with administration and enforcement handled by the city.
- Reapproval and conditions: The tax and its use are subject to the same voter-approval processes required by law for local taxes and for the specific projects.
Notable Changes to Existing Law
- New local tax authority for Taylors Falls: Establishes a 0.5% local sales and use tax tied to specific project funding.
- Bonding flexibility: Allows up to $2,000,000 in bonds (plus issuance costs) for the funded projects, with favorable treatment for debt limits and levy restrictions.
- Project-specific taxation: Revenues are strictly dedicated to identified city projects and related costs, rather than general city needs.
- Termination provisions: Sets a defined sunset window (or earlier termination by ordinance) and provisions for any remaining funds.
Relevant terms - local sales and use tax, 0.5% (one-half percent), Taylors Falls, community center improvements, Taylors Falls River Walk, trail system, town square, bonds, Chapter 475, Minnesota Statutes, 297A.99, issuance costs, debt limits, levy restrictions, voter approval, project costs, bond issuance costs, general fund, termination, tax administration.
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 25, 2026 | House | Action | Introduction and first reading, referred to | Taxes |
Citations
[
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minn. Stat. 477A.016 to authorize a local sales and use tax for Taylors Falls, subject to voter approval and related requirements under Minn. Stat. 297A.99.",
"modified": []
},
"citation": "Minnesota Statutes 477A.016",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References voter approval requirements and related provisions for local option taxes and bond actions under Minn. Stat. 297A.99, subdivision 3.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99 subdivision 3",
"subdivision": "subdivision 3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Governs the imposition, administration, collection, and enforcement of the tax authorized by this section.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites subdivision 2 paragraph d to specify use of revenues for projects, in connection with bond financing.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99 subdivision 2 paragraph d",
"subdivision": "subdivision 2 paragraph d"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites subdivision 2 paragraph a in relation to bond approval and financing requirements.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99 subdivision 2 paragraph a",
"subdivision": "subdivision 2 paragraph a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites subdivision 2 generally for bonding or tax authority under Minn. Stat. 297A.99.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99 subdivision 2",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites subdivision 12 governing termination timing of the tax.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99 subdivision 12",
"subdivision": "subdivision 12"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minn. Stat. chapter 475 for bonding authority related to the projects.",
"modified": []
},
"citation": "Minnesota Statutes chapter 475",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Referenced as part of exemptions from levy limitations for bond-related taxes.",
"modified": []
},
"citation": "Minnesota Statutes section 275.60",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Referenced as part of exemptions from levy limitations for bond-related taxes.",
"modified": []
},
"citation": "Minnesota Statutes section 275.61",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Addresses levy limitations on tax revenue used to pay principal and interest on bonds.",
"modified": []
},
"citation": "Minnesota Statutes section 475.61",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Not required to have a separate election to approve bonds under Minn. Stat. 475.58.",
"modified": []
},
"citation": "Minnesota Statutes section 475.58",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References paragraph a of subdivision 3 for bond approval requirements.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99 subdivision 3 paragraph a",
"subdivision": "subdivision 3 paragraph a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References paragraph f of subdivision 3 for additional bond-related provisions.",
"modified": []
},
"citation": "Minnesota Statutes section 297A.99 subdivision 3 paragraph f",
"subdivision": "subdivision 3 paragraph f"
}
]Progress through the legislative process
In Committee