DISCLAIMER

06-0777R


RESOLUTION AUTHORIZING AGREEMENT WITH STATE DEPARTMENT OF REVENUE TO ADMINISTER THE CITY SALES TAX SYSTEM.

BY COUNCILOR STEWART:

     RESOLVED, that the proper city officers are hereby authorized to enter into an agreement, substantially in the form of the agreement filed as Public Document No. ____________ with the Minnesota state department of revenue pursuant to which the state will administer the city’s sales tax system, compensating itself from sales tax collections.


STATEMENT OF PURPOSE:  This resolution authorizes the city to enter into an agreement with the state department of revenue pursuant to which the state will administer the city’s sales tax system, including collections thereunder and will cover its costs by retaining a portion of the collection of tax revenue.


Historically, the city has administered its own sales tax system with its own staff. However, effective as of the beginning of 2006, state law requires that the state department of revenue administer all local sales tax systems in the state including that of the city of Duluth. This agreement implements the mandate of that statute.


At this time it is impossible to know costs of the state’s administrative services because the statute requires them to allocate their direct and indirect costs for such administration over their system and to charge the local jurisdictions to which they are supplying services their “proportionate share” of those costs.