State sales tax to rise

Published 10:15 am Tuesday, June 30, 2009

The Minnesota sales tax will increase Wednesday when a constitutional amendment to raise money for the outdoors and the arts takes effect.

State general sales taxes will be going up 0.375 percent on July 1, a result of the Legacy Amendment, passed by 56 percent of Minnesota voters last November. In Austin, the current sales tax level is 7 percent — 0.5 percent higher than the state level due to a past referendum — and will become 7.375 percent Wednesday.

Austin Administrative Services Director Tom Dankert said the city will not see an increase in revenue when the tax rate goes up because of Austin’s already-higher rate, which went into effect in 2007 to help with flood control. However, the city will face additional costs for any purchases previously subject to the 6.5 percent rate.

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The increased tax rate is scheduled to last for 25 years. A majority of the extra revenue is slated to go toward preserving and restoring various natural habitats, water sources, and parks and trails. About 20 percent will go to arts programs, arts education and heritage preservation.