The Department of Revenue has announced a number of upcoming local sales tax changes.
New transit sales and use taxes
Both Olmsted County and Rice County will impose new transit sales and use taxes, effective January 1, 2014. Olmsted County will impose a new 0.25% transit sales and use tax. Rice County will impose a new 0.5% transit sales and use tax.
The new transit sales and use taxes will apply to all retail sales subject to the general sales and use tax in Olmsted County and Rice County, except sales “of motor vehicles registered for road use.”
The notice released by the department stipulates who must register to collect the tax. This includes all retailers who do business and are registered for Minnesota sales tax in Olmsted County or Rice County. Sellers located outside of Olmsted County and Rice County are required to register if they do any of the following activities in either of the counties:
- Maintain an office, distribution facility, warehouse, “or other place of business” in Olmsted or Rice County, “either directly or by a subsidiary;”
- “Have a representative, agent, salesperson, canvasser, or solicitor” in Olmsted or Rice County, either permanently or temporarily;
- “Ship or deliver tangible personal property” into Olmsted or Rice County; or
- “Perform taxable services” in either county.
Lodging sales tax rate increase
The lodging tax rate for the City of Rochester will increase from 4% to 7%, effective January 1, 2014. It must be charged “on all sales of lodging and lodging-related services.”
Lodging is defined as “the rental of a room or rooms for less than 30 days or for 30 days or more, “if there is no enforceable written agreement that requires the guest to give notice of intent to terminate.”
Lodging-related services are services provided within a guest room by a hotel, motel, rooming house, tourist court, resort, or other similar establishment and “associated with the use of the lodging facility and billed by the facility.” They include the following:
- Pay-per-view in-room movies;
- Room service; and
- Room minibars.
Any lodging facilities that made sales in Rochester must register for the Rochester lodging tax.