4.8 SR 12-02-2024The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community
engagement that encourages and inspires prosperity
Request for Action
To
City Council
Item Number
4.8
Meeting Date
December 2, 2024
Prepared By
Cal Portner, City Administrator
Item Description
2024 Local Option Sales Tax Agreement 24-30
Reviewed by
Lori Stich
Joe Stremcha
Tina Allard
Action Requested
Approve, by motion, the 2024 Local Option Sales Tax Agreement 24-30 with the Minnesota Department of
Revenue.
Background/Discussion
The Minnesota Department of Revenue has updated the collection agreement for local option sales and use
taxes. The new agreement updates the administrative rates for the reimbursement of the department's costs.
The new agreement sets a flat rate of up to 1.0% of local sales taxes collected and allows for adjustment to
reflect the fluctuation of sales tax revenues. The rate for 2025 will be 0.90%.
Financial Impact
Service fees to the Minnesota Department of Revenue are taken from our distribution of sales and use taxes.
Mission/Policy/Goal
Elk River Mission
Attachments
1. 2024 MNDOR New LOST Agreement
2. 2024 MNDOR New LOST Agreement Letter
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1
Cal Portner
From:MN_MDOR_Local Government Services <LocalGovernmentServices.mdor@state.mn.us>
Sent:Wednesday, November 20, 2024 10:07 AM
Cc:MDOR_SUT Local Government Services
Subject:New Local Sales Tax Agreement
GreeƟngs,
The updated local opƟon sales and use tax agreement will be ready for your local government to review by the end of
this week. The new agreement includes an updated rate for the administraƟve fee found in the Reimbursement of Costs
secƟon. This new administraƟve fee begins with payments made to local governments in January 2025, for the local
sales tax collected from the November 2024 revenue period.
The new language for the administraƟve fee states the Department will collect a flat rate of up to 1.0% of local sales
taxes collected. The language is updated to allow for adjustments to reflect the fluctuaƟon of sales tax revenues. By
doing this, updates to the agreements will only be required if the administra Ɵve costs exceed the flat rate. To which the
180-day noƟce is required. StarƟng in January 2025, the rate will be 0.90%. We will provide the actual administraƟve
rate with your monthly spreadsheet the Department emails with your payment.
We will upload the new agreements into the virtual room. You may already have access to the virtual room. If you do
not have access, the main contact for the local government will receive a separate email with instruc Ɵons to log in. If
you had access to the virtual room in the past, but you are unsure of your log in informaƟon, please let us know by
responding to this email. We can reset your account if necessary.
AŌer logging in to the virtual room you will be able to see the local opƟon sales and use tax agreement to download for
your local government to review and sign.
Once your local government signs the agreement, upload the signed agreement to the virtual room. We will forward the
agreement to the Commissioner of Revenue for his signature. AŌer all signatures are obtained, the agreement will be
uploaded to the virtual room for you to keep a copy and we will also retain a copy.
Please return the updated signed agreement before January 31, 2025. If you need addiƟonal Ɵme, please let us know.
If you have quesƟons or concerns, contact us by phone or email listed below.
Sincerely,
Sales & Use Tax Division
Local Government Services
Minnesota Department of Revenue
Phone: 651-556-6117
Fax: 651-556-3102
Email: LocalGovernmentServices.mdor@state.mn.us
www.revenue.state.mn.us
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Working together to fund the future for all of Minnesota.
Emails are answered in the order that they are received. This email is advisory only. It is based on the particular facts and
circumstances outlined in the email and on the laws in effect at the time. Different circumstances, statutory changes, or subsequent
court decisions could affect the information given in this email.
If you or your client are currently under audit by the Minnesota Department of Revenue, the Revenue Tax Specialist should be
answering any questions or concerns as they would have first-hand knowledge regarding your business.
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