As of April 1, the amount of sales tax being paid in Redwood County increased by one half of one percent. That is due to a decision made by the Redwood County Board of Commissioners in late 2018 to approve a local option sales tax on applicable items for all Redwood County businesses in an effort to raise funding to help cover the costs of increased transportation needs for the county.

According to Vicki Knobloch, county administrator, the most recent information from the Minnesota Department of Revenue estimates that the increased sales tax will bring in approximately $700,000 in funding for projects in the county.

The sales tax increase was most recently presented to the county commissioners by Keith Berndt, county engineer, as a way to cover the costs for transportation projects over and above the allocation the county receives from the state and federal government.

The $700,000 being raised in no way covers those dramatic costs for road work, which can have costs in the $1 million per mile range.

According to Knobloch, all of the county businesses were sent notices regarding the sales tax increase in advance of the April 1 start date. In order to implement a local sales tax increase, the county board had to list specific projects that would use those funds, and the board listed 12 such projects that need to be done in the coming years that could benefit from the added funding collected locally when it approved the increase. 

While there has not been a date set when the sales tax would sunset, Knobloch said when the list of current projects is completed, the board will have to discuss whether or not it plans to continue the sales tax increase or not.

Sales tax collection was dramatically broadened in 2018 when the Minnesota Department of Revenue announced it would require remote sellers and marketplace providers facilitating sales into Minnesota to begin collecting sales tax.

That requirement was made possible based on a June 2018 U.S. Supreme Court decision known as South Dakota vs. Wayfair. Those businesses without a physical presence, such as mail order companies, are now required to collect the sales tax.

In lieu of collecting sales tax, motor vehicle sales will include a $20 excise tax. Briana Mumme, Redwood County economic development coordinator, said the county is encouraging businesses to contact their CPA for more guidance.

– Photo courtesy of the Internet Public Domain