Archived Story

Editorial: This tax exemption makes good sense

Published 9:20am Friday, June 7, 2013

There was a bill in the 2013 legislative session that didn’t get a lot of attention but was worth commending.

The state Legislature approved a bill that Gov. Mark Dayton signed into law that allows cities and counties to be exempt from paying sales taxes. For instance, if a city needs to buy equipment for the swimming pool, it doesn’t pay the sales tax because it makes little sense for one government to pay a tax to another government. It becomes paying sales taxes with property taxes.

Cities and counties, after all, are children of the state government. And Minnesota schools have never had to pay sales taxes. Fewer than 10 states make local governments pay sales taxes.

The new measure, passed as part of the omnibus tax bill, is expected to save cities and counties $125 million. That really is a form of property tax relief and a good change in state policy.

We want to remind local merchants that the sales tax exemption doesn’t go info effect until Jan. 1, 2014.