HomeMy WebLinkAboutResolution No. 584-15 - SalesTaxCollectionAmendAgree.MNDeptofRevenueRESOLUTION
BE IT RESOLVED by the Common Council of the City of Rochester that the City approve of
and execute the "Agreement Between the Minnesota Department of Revenue and the City of
Rochester for the Collection of a Local Sales and Use Tax and a Lodging Tax as Amended
November 2015."
The Mayor and the City Clerk are authorized and directed to execute this agreement on
behalf of the City.
PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF
ROCHESTER, MINNESOTA, THIS DAY OF , 2015.
ATTEST:
CITY CLERK
PRESIDENT OF SAID COMMON COUNCIL
APPROVED THIS DAY OF , 2015.
MAYOR OF SAID CITY
(Seal of the City of
Rochester, Minnesota)
Res15\ExecuteAgr\82
Agreement Between the Minnesota Department of Revenue
. ♦ the City of • for
Collection of •Lodging
Amended November 1
Introduction
This agreement concerns administration of local taxes identified below:
• Rochester sales tax
• Rochester use tax
• Rochester lodging tax
Rochester sales and use taxes are authorized by Laws of Minnesota 1983, Chapter243, Article 4 Section
18, amended Laws of Minnesota 1998, Chapter 389, Article 8, Section 43, and amended Laws of
Minnesota 2013 Chapter 143, Article 10, Section 8 (469.45, Subd. 2). The taxes are imposed by
Rochester Ordinance number 3297, amended 2015 by Rochester Ordinance 4192.
Rochester lodging taxes are authorized by Laws of Minnesota 2002, Chapter 377, Article 3, Section 25,
amended Law 2009, Chapter 88, Article 4, Section 19, amended Law 2013, Chapter 143, Article 8,
Section 46. The taxes are imposed by Rochester Ordinance number 128, amended 2013 Rochester
Ordinance number 128.02.
Administration, collection, and enforcement
The Department of Revenue will administer, collect, and enforce the Rochester taxes identified in the
introduction, as authorized under Minnesota Statutes, section(s) 297A.99 and any other authorizing
statutes as authorized by the above referenced ordinance. The administration, collection, and
enforcement process will follow existing statutes (Minnesota Statutes, Chapters 297A, 289A, and 270C)
and rules administered by the Department (including Chapter 8130) and administrative procedures used
by the Department to administer, collect, and enforce the Minnesota state sales and use tax.
Registration of vendors
The Department of Revenue will handle automatic registration of vendors. Accounts that are currently
registered for state sales and use tax who have a zip code in the Rochester taxjurisdiction will be
registered for the Rochester taxes. We will mail an informational notice to these businesses notifying
them that they have been automatically registered for the Rochester taxes identified in the
introduction.
The Department will notify all vendors that are registered for state sales and use tax and the general
public about the Rochester taxes by posting a notice on the Department of Revenue's website
(www.revenue.state.mn.us). Other notifications will be made at the time of registration, through
newsletters and fact sheets.
Rochester acknowledges that there is no cost effective way to identify specific vendors located outside
the Rochester taxing jurisdiction who are required to be registered for Rochester tax. identification of
these vendors will be voluntary by vendor response to general notifications by the Department and
through other contacts the vendor has with the Department or the Streamlined Sales Tax Governing
Board's (SSTGB) central registration system.
Publicity and education
The Department of Revenue is responsible for educating vendors that are registered for state sales and
use tax of their ongoing obligations to collect and remit Rochester taxes covered by this agreement. The
Department is also responsible for informing newly registered businesses of their obligations to collect
and remit taxes covered by this agreement.
Rochester and the Department may work together to develop educational or administrative methods,
using resources available, to enhance compliance. For example, Rochester may furnish an electronic file
containing license information to the Department so that a match can be made to determine if all
license holders are properly registered and collecting Rochester sales and use tax.
If Rochester maintains an official website, it will display on its main home page a link to a notice that
residents and businesses in the political subdivision may owe a local use tax on purchases of
goods and services made outside of the political subdivision limits. The notice will provide
information, including a link to any relevant page on the Department's website
(www.revenue.state.mn.us), on how the taxpayer may get information and forms necessary for
calculating and paying the tax.
Additionally, if Rochester provides and bills for sewer, water, garbage collection or other public
utility services, the billing statement will include at least once per year a notice that residents
and businesses may owe a local use tax on purchases made outside of the political subdivision
limits and provide information on how the taxpayer may get information and forms necessary for
calculating and paying the tax.
Returns and remittance
Vendors will remit Rochester taxes covered by this agreement as part of their Minnesota sales and use
tax returns, which include simplified electronic returns (SER's) authorized by the SSTGB. Monies
collected by the Department will be deposited in the State Treasury and credited to a special account.
The Department will draw from this account to recover Department costs as provided in this agreement,
and to transmit collections to Rochester. Rochester will accrue no interest on this amount.
Transmittal of tax to Rochester
The Department will transmit the taxes reported on returns to Rochester monthly through the
automatic clearing house system. For each month of collection, two transmittals will be made. The first
will be approximately five business days after month end. The final transmittal will be approximately 40
days after month end. The Department will retain, from the final monthly payment, a fee for
administering, collecting, and enforcing the Rochester taxes as provided in this agreement.
Reporting
When the final monthly transmittal is made, a report will be sent to Rochester indicating the total
amount of Rochester taxes reported, corresponding adjustments made, prior month corrections and
administrative fees retained.
The Department will give Rochester, on request, but no more than once a year, a report showing
information about taxpayers located within the Rochester taxing area and the amount of taxes remitted.
Disclosure
The Department will give Rochester a copy of Minnesota Statutes, Chapter 2708, Tax Data, Classification
and Disclosure. Rochester understands that any individual account information given to its officials and
representatives ("taxing officials") in connection with local sales and use taxes is subject to the
classification and disclosure provisions of this chapter, and that pursuant to Minnesota Statutes, Section
27013.12, subdivision 2, such information can only be used to the extent necessary to administer the
Rochester sales or use tax.
If Rochester requests a report showing individual account information about Rochester taxes, the
Department will conduct disclosure training to Rochester.
Inspection of records and audit information
Rochester may inspect and audit all data records relating to their local tax, the cost of collection of the
taxes and the performance by the Department under this agreement.
Reimbursement of costs
The Department will review their direct and indirect costs for administering, collecting, and enforcing
local taxes once every five years and adjust costs as warranted. If changes are required the Department
will notify Rochester of the estimated cost for administering, collecting and enforcing the local taxes by
January V of the year prior to the beginning of the State's fiscal year when the change will be
implemented. Total local tax costs are shared by all local jurisdictions based on their share of total
revenues and total tax lines reported on Minnesota sales and use tax returns. The Department weights
each jurisdiction's percentage of revenue by 1/3 and their percentage of tax lines by 2/3 to compute
their monthly percentage of total administrative costs.
Example:
Assume monthly totals for all Local Sales Taxes:
Total Tax revenues $20,000,000.00
Total Tax lines on returns 90,000
Total Administrative costs $200,000.00
If Local Tax A has revenues of $1,600,000.00 (8% of the total) and 9,000 tax lines (10% of the total) their
share of monthly expenses would be 9.34% or $18,680.00, which represents approximately 1.17% of
their monthly revenues. The following is how the 9.34% was calculated:
8% x 1/3 = 2.67%
10% x 2/3 = 6.67%
9.34%
Final transmission
When a tax ends, the Department may retain 20 percent of gross receipts for the final month, to be
used as a fund to make adjustments or refunds. The portion of this fund that is not used for refunds or
adjustments will be transmitted to Rochester at the close of the period of limitations provided in
Minnesota Statutes, section 289A.40. If the funds are not sufficient to cover refunds and adjustments,
Rochester must provide the Department with sufficient funding to process all closing adjustments.
Annual Meeting
Rochester and the Department may meet annually, at a mutually convenient time, to review
performance under this agreement and their mutual relationship in the administration of Rochester
taxes identified in the introduction.
Responsibilities
When the boundary limits for Rochester change, it is the responsibility of Rochester to provide the
Department of Revenue with the updated nine -digit zip code information.
If Rochester updates or amends the city ordinance relating to the Rochester tax, Rochester must provide
the Department of Revenue with a signed copy of the revised or amended ordinance.
Rochester must confirm with the Department of Revenue current contact information annually and
advise when changes occur in Rochester contact information. This includes, but is not limited to, the
contact person, phone number, address and email.
Effective date
This agreement is effective the day following imposition of the tax and supersedes any previous
agreement.
Modifications
This agreement may be modified if the modification is in writing, signed by the Commissioner of
Revenue and an authorized representative of Rochester
Minnesota Department of Revenue
Signature: J ZU Y I v C/
Cynth auerly
Commi sinner of Revenue
Date: (E?
Rochester Representative
Signature:
Print Name: Ardell Brede
Print Title: Mayor
Date: ., -jo
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Signature: UA
Print Name: Aran Raave-s. V/"t
Print Title: City Clerk
Date: e - I _/