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Local-option sales tax goes into effect
April 1 brought a small change for the city of Brainerd as the local-option sales tax went into effect.
Dan Vogt, Brainerd city administrator, said the city hasn't heard from the general public about the sales tax but did receive at least one call from a business confused about who was collecting the tax.
The Minnesota Department of Revenue will administer and collect the sales and use tax for Brainerd.
The sales tax does not apply to Brainerd businesses that deliver their goods outside of the city, excluding Baxter. The sales tax applies if the final sale and delivery of a purchased item is within the city, regardless of where it is delivered from.
The local sales tax is charged on top of the state's sales tax, bringing the total tax for items purchased in Brainerd and Baxter to 7 percent.
Vogt said vendors have had questions about particular locations and whether they are within the city limits.
"Those questions are pretty simple to answer," Vogt said.
More than 70 percent of voters in Brainerd in the Nov. 7 general election approved enacting a local .5 percent sales tax, with 3,009 in favor and 1,236 against.
Proceeds from the sales tax - estimated to be about $1 million a year until the local tax ends in 12 years - will go toward Brainerd's share of the city's wastewater treatment facility expansion. The total project cost is anticipated to be about $35 million, of which Baxter will pay about one-third. Both cities received approval to issue a .5 percent tax from the Legislature. Baxter voters in 2004 approved enacting the local sales tax, which went into effect Oct. 1.
Brainerd's wastewater treatment facility is nearing capacity and the Minnesota Pollution Control Agency has mandated that it be expanded to accommodate growth in Brainerd and Baxter.
The .5 percent sales tax would equate to 10 cents on every $20 purchase, $1 on a $200 purchase and $10 on a $2,000 purchase. Sales tax on vehicles is limited to $20 on those valued at more than $4,000. The tax on vehicles is the only thing the city is administering. Food and clothing would be exempt from the tax.
It is anticipated that even with the sales tax, Brainerd residents would pay an additional $170 per year - $50 per year through purchases and $120 per year through an increased utility bill.
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