DEPARTMENT: Finance
FILE TYPE: Consent Action
TITLE
title
Approval Of Resolution Increasing Wheelage Tax Rate In Dakota County From $10 To $20 Per Year
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PURPOSE/ACTION REQUESTED
Approve a resolution increasing the wheelage tax rate in Dakota County from $10 to $20 per year, effective January 1, 2027.
SUMMARY
Minn. Stat. §163.051 authorizes the Board of Commissioners to levy, by resolution, a wheelage tax on each motor vehicle. By Resolution No. 06-250 (June 20, 2006), the Dakota County Board of Commissioners authorized a wheelage tax rate of $5 per year effective January 1, 2007.
During the 2013 legislative session, the Minnesota Legislature amended Minn. Stat. §163.051 to broaden the wheelage tax from metropolitan counties to all counties in the state and increased the allowable wheelage tax rate from $5 to $10 per vehicle, with a provision allowing counties to further increase the tax up to $20 beginning January 1, 2018. Per Minn. Stat. §163.051, the wheelage tax rate in Dakota County automatically increased from $5 to $10 effective January 1, 2014.
At the current rate of $10, Dakota County wheelage tax generates approximately $4.2 million per year. These funds are deposited in the County’s Transportation Fund and are used for highway purposes within the meaning of Minnesota Constitution, Article 14. A highway purpose is generally to “construct, improve and maintain public highways.”
Increasing the wheelage tax from $10 to $20 is estimated to generate an additional $4.2 million in revenue per year. This additional revenue would be used to support the costs of Transportation Department vehicles in the Fleet Capital Equipment Program (CEP), Transportation Department maintenance and operations costs, and the Transportation Capital Improvement Program (CIP).
RECOMMENDATION
recommendation
Staff recommends that the Dakota County Board of Commissioners adopt a resolution increasing the wheelage tax rate in Dakota County from $10 to $20 per year and have the state registrar of motor vehicles collect the same, effective January 1, 2027.
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EXPLANATION OF FISCAL/FTE IMPACTS
Increasing the wheelage tax from $10 to $20 is estimated to generate an additional $4.2 million in revenue per year. This additional revenue would be used to support the costs of Transportation Department vehicles in the Fleet Capital Equipment Program (CEP), Transportation Department and Physical Development Administration Department maintenance and operations costs, and the Transportation Capital Improvement Program (CIP). If approved, the anticipated additional revenue will be included in the County Manager’s Recommended 2027 Budget.
☐ None ☐ Current budget ☒ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
body
WHEREAS, Minn. Stat. §163.051 subdivision 1, provides, in part, that the Board of Commissioners of each county is authorized to levy by resolution a wheelage tax at the rate of up to $20 per year, in any increment of whole dollar, as specified by each county that authorizes the tax; and
WHEREAS, Minn. Stat. §163.051 further provides that the board may provide by resolution for collection of the wheelage tax by county officials or it may request that the tax be collected by the state registrar of motor vehicles, and the state registrar of motor vehicles shall collect such tax on behalf of the county if requested; and
WHEREAS, Minn. Stat. §163.051, subdivision 2, provides, in part, that the wheelage tax levied, if made collectible by the state registrar of motor vehicles, shall be certified by the county auditor to the registrar not later than August 1 in the year before the calendar year or years for which the tax is levied, and the registrar shall collect such tax with the motor vehicle taxes on the affected vehicles for such year or years; and
WHEREAS, Minn. Stat. §163.051 subdivision 4, provides that the treasurer of each county receiving proceeds from the wheelage tax is to deposit such proceeds in the county road and bridge fund, which moneys shall be used for purposes authorized by law which are highway purposes within the meaning of the Minnesota Constitution, article 14; and
WHEREAS, the Dakota County Board of Commissioners desires to implement an increase in the wheelage tax from $10 to $20 and have the state registrar of motor vehicles collect the same.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes and imposes a wheelage tax as provided in Minn. Stat. §163.051 of $20 per year on each motor vehicle, except a vehicle exempt from the tax as defined in Minn. Stat. §163.051, subdivision 1(c), which is kept in Dakota County when not in operation and is subject to annual taxation and registration under Minnesota Statutes, chapter 168; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby requests that the wheelage tax be collected at the rate of $20 by the state registrar of motor vehicles, as provided for in Minn. Stat. §163.051, subdivision 2; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby directs the County Manager to certify the wheelage tax rate of $20 to the state registrar of motor vehicles before August 1, 2026, and that the tax be effective January 1, 2027.
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PREVIOUS BOARD ACTION
06-250; 6/20/06
ATTACHMENTS
Attachment: None.
BOARD GOALS
☐ Thriving People ☐ A Healthy Environment with Quality Natural Resources
☐ A Successful Place for Business and Jobs ☒ Excellence in Public Service
CONTACT
Department Head: Will Wallo
Author: Will Wallo