Local Option Sales Tax for Transportation
What is it?
The tax is generally referred to as the Local Option Sales Tax (LOST). This taxing authority is granted to counties in Minnesota by State Statute 297A.993, subdivision 1. According to law, counties may implement a sales and use tax of up to 0.5% and include a vehicle excise tax of up to $20 per vehicle. The funds can only be used on projects designated by the County Board.
Implementing the tax requires a public hearing at which the public may submit input and comments to the County Board. After the public hearing is closed, the County Board may implement the tax by enacting a resolution. Wright County initially implemented a 0.5% county-wide sales tax to fund transportation projects on June 13, 2017 (which was set to expire on December 31, 2021). Wright County provided public engagement opportunities to gain input on extending the local option tax by holding two in-person open house meetings on October 12, 2021, and October 27, 2021, as well as a Virtual Open house (from October 7th to November 4th, 2021).
Wright County held a public hearing on February 15, 2022, and implemented an extension of the sales tax (that extends the 0.5% sales tax through December 31, 2032).
Wright County did not implement a vehicle excise tax. The overall sales tax rate in Wright County is 7.375%. All surrounding counties and metro counties have a sales tax rate between 6.875% and 8.025%.
Why is it needed?
The 2019 Wright County Long-Range Transportation Plan (LRTP) identified an estimated $10 million (2019 dollars) annual funding gap in transportation funding needs. Additional transportation funding needs include expansion of a Highway Maintenance Truck station and construction of a new Highway Maintenance Truck station. Wright County continues to be one of the top population growth counties in the state with heavy and diverse transportation needs that include local, commuter, freight, business, and agricultural vehicles that require transportation infrastructure to accommodate those needs.
How much revenue does it generate?
The 0.5% local option sales tax has generated an average of about $8 million annually since it was implemented in the third quarter of 2017 by the county. The tax generated about $11 million in revenue in 2021 and is projected to increase annually with the anticipated continued growth in Wright County.
What will it be used for?
When the County Board implemented the extension of the local option sales tax on February 15, 2022, a list identified the projects that will be eligible to be funded with the revenue from the sales tax, for their development and construction. Below is the list of the projects, and a map showing their location. The projects on this list may also be funded with other funding resources. This list is not a commitment to construct these projects in any specified time frame - it is only a list showing what projects are eligible to use revenue from this tax. Final decisions and revenue sources that are available will be determined on a year-by-year basis through the county's annual budgeting and Five-Year Highway Plan process.
- Counties with Local Options Sales Tax for Transportation
- Mn Dept. of Revenue Sales Tax Rate Map
- 2022 Wright County Construction Projects map
- 5-Year Highway Construction Plan map @(Model.BulletStyle == CivicPlus.Entities.Modules.Layout.Enums.BulletStyle.Decimal ? "ol" : "ul")>