BROWN COUNTY - Starting next year, Brown County will be one of at least 40 Minnesota counties to adopt the new $10 wheelage tax to fund local transportation needs. The deadline for counties to decide whether to impose the tax was Thursday.
The wheelage tax was passed by the Minnesota Legislature earlier this year.
After Jan. 1, 2014, the tax will be collected when license tabs are renewed.The Driver and Vehicle Services department of the Minnesota Department of Public Safety is the entity to officially collect the tax. The funds are then returned to individual counties in an established fund. These monies can only used for local transportation or road projects, but there is flexibility in which projects they chose to pay for.
The tax does not apply to motorcycles or trailers.
The wheelage tax was adopted by Brown, Watonwan, Cottonwood and Renville counties. Projections indicate annual collections of $286,000 for Brown, $175,000 for Renville, $122,670 for Cottonwood and $114,000 for Watonwan.
Blue Earth, Nicollet and Redwood counties chose not to adopt the wheelage tax. Blue Earth would have generated $505,000 per year, Nicollet would have generated $260,000 and Redwood would have generated $174,000.
The administrative cost of the state collecting the wheelage tax in approximately 5 cents per $10 collected.
Looking into the future, counties that did not adopt the wheelage tax still have the option to do so. But, it will not be implemented until the start of the next year. Counties also have the option to increase the wheelage tax up to a maximum of $20 per tab per year.
Half-cent sales tax
Another local funding option passed this legislative session was a one-half cent sales tax for the county, which can now be passed by resolution.
Previously only allowed in select metro cities, the tax can only be applied toward the capital costs of specific transportation projects, paying the cost of transit projects, capital costs of creating safe routes for school programs and payment of transit operating costs. For most out-state counties, the tax would go towards road repair projects.
Because motor vehicles are not included in the taxable items under the sales tax, the wheelage tax does not overlap. The sales tax expires when the designated project is completed or when the terms of the sales tax are completed.
At this point, no county in the region has adopted the one-half cent sales tax. The situation may be due to the sales tax not having the time limit of the wheelage tax.
The sales tax can be adopted by a county every 90 days, or every quarter. There can only be one of these sales taxes at any given time.
If regional counties adopted the sales tax, they are estimated to generate the following funds in 2014: $7.431 million for Blue Earth, $1.595 million for Brown, $1.2 million for Nicollet, $944,642 for Redwood, $539,592 for Renville, $447,554 for Cottonwood and $410,464 for Watonwan.
(Josh Moniz can be e-mailed at firstname.lastname@example.org)