How will Willmar's half-percent local sales tax be applied? And how will it be collected once it goes into effect after midnight today?
The local-option sales tax must be collected by all retailers who do business in Willmar and are registered to collect the state sales tax. This includes businesses whose headquarters may be outside Willmar but who have a place of business -- such as an office, warehouse or distribution center -- or a company representative in Willmar. It also applies to anyone who performs taxable services in Willmar or delivers personal property to Willmar.
The half-percent sales tax will be tacked on to any purchase to which the state's 6.5 percent sales tax already applies. This long and eclectic list includes car washes, home remodeling, dry cleaning, liquor and utility bills. A package of ground beef from the supermarket is exempt from the sales tax -- but grocery-store items such as paper towels, pet food, marshmallows and chocolate chips are not (the latter two are classified as candy and hence are taxable).
Customers typically will pay the extra one-half percent at the cash register.
All sales tax money is collected by the Minnesota Department of Revenue, but the local sales tax is reported separately so that it can be disbursed to the city.
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What if you buy something in Willmar but live outside the city? Willmar's local sales tax applies to you too, if you are receiving taxable services in Willmar or are taking possession of a purchased item in Willmar. It doesn't apply, however, to items that are delivered to customers out of town.
For instance, if you buy a new couch in Willmar and load it into your vehicle to take it home, you pay the local sales tax; if you buy the couch in Willmar but have the furniture store deliver it to your home in another city, you don't have to pay the local sales tax.
Internet shoppers aren't off the hook either. If you live in Willmar and buy something online, over the phone or from any business and aren't charged the Willmar sales tax, you must pay a use tax at the same rate as the sales tax.
