Hermantown’s Finance Department manages the financial affairs for the City. Responsibilites include providing financial information to the City Administrator and City Council regarding the fiscal affairs of Hermantown, assisting in the preparation of the annual budget and Capital Improvement Plan (CIP), monitoring expenditures for budget compliance, preparing financial reports, administering payroll, handling accounts payable and accounts receivable, utility billing, cashiering, purchasing, and overseeing the Management Information Systems.
What is the sales tax situation in Hermantown?
The City of Hermantown will move to a 1.5% Sales and Use Tax in 2023. Currently, Minnesota has a state sales tax of 6.875% and a 0.5% sales tax associated with St. Louis County. This leaves a total sales tax of 8.875 to be charged on eligible items in the city limits of Hermantown.
Local sales tax applies to retail sales made and taxable services provided within the local taxing area. The tax applies to the same items that are taxed by the Minnesota sales and use tax law.
Who is required to collect sales tax?
All retailers registered to collect Minnesota sales tax and doing business in an area with a local tax must be registered with the Minnesota Department of Revenue to collect the local tax. This includes sellers from outside of Hermantown who:
- Have an office, distribution, sales, sample, or warehouse location, or another place of business in the city limits of Hermantown either directly or by a subsidiary;
- Have a representative, agent, salesperson, canvasser, or solicitor in the city limits of Hermantown, on either a permanent or temporary basis, who operates under the authority of the retailer or its subsidiary for any purpose, such as repairing, selling, installing, or soliciting orders for the retailer’s goods or services or leasing tangible personal property in the city limits of Hermantown;
- Ship or deliver tangible personal property in the city limits of Hermantown; or
- Perform taxable services in the city limits of Hermantown.
Local tax of 1.5% applies to sales made or services performed in the city limits of Hermantown only. The addresses in the City of Hermantown have one of 4 zip codes (55810, 55811, 55814, and 55701). The City of Hermantown does not have its own zip code. To determine the correct sales tax, please use your 9-digit zip code. Retailers are required to use the 9 digits to calculate their sales tax rate correctly.
Review your invoices to ensure that you have not been overcharged.
Additional information on calculating and paying the Hermantown 1.0% sales and use tax can be found on the Minnesota Department of Revenues website at www.taxes.state.mn.us or call the City of Hermantown administrative office 218-729-3600.
What does Hermantown’s Sales Tax pay for?
The City’s Sales Tax pays the debt service for the construction and expansion of the City’s sewer trunkline, the Gov’t Services Building, and the Essentia Wellness Center.
Additionally, based on the results of the 2022 General Election, sales tax is also the funding mechanism for the three projects associated with the Community Recreation Initiative.
Who determines my property value in Hermantown?
The City of Hermantown contracts with the St. Louis County Assessor’s Office for assessing services.
Why are my property taxes higher than “so-and-so’s in XYZ city?”
Your particular property taxes are determined by the value of property, as well as city, county, and school tax rates. The amount of aid received by the city, county, and school also factor in. These vary from city to city and account for discrepencies in the amount of property taxes paid.
For example, Hermantown does not receive an Local Government Aid (LGA) and has to deliver a vast majority of its city-wide duties based on property taxes. Other neighboring cities who receive LGA have a far lower percentage of their annual budget based on property taxes.
Do high taxes translate into high spending?
The way to determine if a city is spending too high is to look at its actual expenditures and the services the city provides. Hermantown outlines its city-wide expenditures and services annually in its budget, which can be found to the left.