New Minnesota sales tax begins
Mike Kilgore says the green Minnesotans pay in a higher tax beginning Wednesday will mean a greener Minnesota in a year. Minnesota forests will stay green, prairies will turn greener and some wetlands will return to their green state thanks to a ...
Mike Kilgore says the green Minnesotans pay in a higher tax beginning Wednesday will mean a greener Minnesota in a year.
Minnesota forests will stay green, prairies will turn greener and some wetlands will return to their green state thanks to a sales tax increase voters approved last November, Kilgore said.
The increase, upping the state's portion of the sales tax from 6.5 percent of purchases to 6.875 percent of purchases, is to provide money to clean up the state's water, protect and restore wetlands and prairies, support parks and trails and preserve arts and cultural heritage activities.
The constitutional amendment that voters easily passed is the first statewide sales tax increase since 1994.
The state estimates the higher tax will bring in
$234 million in the next year and $247 million the following year.
Kilgore said that it is a good investment.
For instance, he said, 180,000 acres of northern Minnesota forest land will be preserved by the state buying rights to the land, preventing development. Another 200,000 acres of prairies and wetlands will be improved with the money.
Kilgore is chairman of the newly created Lessard-Sams Outdoor Heritage Council, which recommends to legislators how to spend part of the funds. The University of Minnesota professor said the 12-member council received 99 requests for funds and handed lawmakers a recommendation, which was accepted, for 18 projects.
Funds are due to be spent on projects ranging from restoring shallow lakes as waterfowl homes to improving state parks to cleaning water to increasing arts education.
The constitutional amendment that raised the sales tax was designated for outdoors and arts programs, with most discussion about outdoors issues. Legislators approved most of the spending earlier this year, and businesses begin collecting the tax Wednesday, the start of the state's new two-year budget.
Revenue Commissioner Ward Einess said the latest estimates show $481 million will be collected in the next two years, down several million from earlier estimates due to the slumping economy.
"Sales taxes have been down pretty consistently every month," Einess said. "I would expect these numbers are the best-case scenario."
The department has heard of no problems from businesses getting ready to collect the new tax, despite the fact that since the last statewide sales tax increase occurred in 1994 many businesses have changed cash registers and computers that figure taxes.
Tax collectors expect some smaller businesses will have problems, or forget to collect the higher tax.
"There is a little bit of a grace period for the first 30 to 60 days," Einess said, although his department will mail reminders to those who do not appear to be collecting the new tax.
The higher sales tax is not the only one Minnesotans will pay. They also face a 1.6 cent-per-gallon gasoline tax increase, part of a 2008 transportation tax increase plan. The tax will continue to rise each July 1 for several years.