6.1. SR 05-07-2018 - Laserfiche WebLink

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Local Option Sales Tax Analysis for Elk River, MN 25 ESTIMATES OF PROJECTED SALES TAX REVENUE The table below shows sales tax revenue at one-eighth percent intervals up to half a percent. This is the highest taxation rate permitted by state law. The table also includes estimates for the tax dollars likely to be paid by year-round city residents, along with the estimates for tax dollars likely to be paid by non-residents. These estimates include all merchandise categories, based on the adjusted trade area analysis. Figure 5: Estimated Tax Proceeds Based on 2015 Sales Tax Data Dollars Dollars Total Paid By Paid By ESTIMATED Tax Elk River Non- TAX PROCEEEDS Proceeds Residents Residents @ 1/8th of a Percent $485,834 $264,602 $221,232 @ 1/4th of a Percent $971,668 $529,204 $442,464 @ 3/8ths of a Percent $1,457,501 $793,805 $663,696 @ 1/2 of a Percent $1,943,335 $1,058,407 $884,928 Total Taxable Sales: $388,667,017 The total sales figure of $389 million is based on 2015 Minnesota Department of Revenue data. There is a use tax component to this local option tax program. Consequently, two other likely sources of tax proceeds can be added to the estimated tax proceeds listed above: 1. For each one-eighth of a percent enacted, city officials can expect an estimated additional $19,200 in use (not sales) tax proceeds derived from city businesses purchasing products from out-of-state sources. (This is based on the 6.875 percent use tax rate applied to out-of- state purchases). 2. City officials can also anticipate additional use (not sales) tax proceeds, but there is no way to accurately estimate this number. The amount, however, will be from purchases made by local businesses in other Minnesota locations.