Legislature gives county option to levy wheelage tax

by Jennie Zeitler, Staff Writer


A new resolution passed by the State Legislature allows Minnesota counties to levy a wheelage tax. Counties also have the option of imposing a half-cent sales tax.

“The Legislature granted County Boards the authority to levy new taxes in an effort to offset some of the other funding sources that have been reduced,” said County Administrator Deb Gruber.

Should the county agree to levy a wheelage tax, the amount will be $10. The amount of the tax is not optional. Beginning in 2018, the cap will be raised to $20, allowing the counties to set the tax anywhere between $10 and $20.

This wheelage tax would be paid when vehicle registrations are renewed. Certain vehicles would be exempt, including motorcycles and mopeds, trailers and semitrailers and vehicles such as collector vehicles which are not subject to annual registration.

The county also has the option of imposing a transportation sales tax of one-half of 1 percent on retails sales and uses. An excise tax of $20 per motor vehicle purchased may also be instituted.

Tax revenue from these sources must be used exclusively for transportation-related projects.

The state must be notified of the county’s intent to levy these two new taxes prior to Aug. 1.

“It’s nice to know that we have additional tools in our tool box to deal with funding shortages,” Gruber said. “However, it certainly puts the County Board in a tough position. We are asked to do more and more at the County level, but the funding associated with it isn’t coming along unless we levy additional property tax or add new forms of tax.”