CHAPTER 5: TAX LEVIES AND THE BUDGETING PROCESS
05.01 TAXING AUTHORITIES AND DISTRICTS
Taxing Authorities
For the purposes of property taxation, a “taxing authority” includes all home rule and statutory cities,
towns, counties, school districts, and special taxing districts. Since taxes payable 2002 and the
implementation of the state general property tax, the state is also a taxing authority.
Property tax levy authority is scattered throughout Minnesota statutes and can be difficult to
exhaustively enumerate. The terms “taxing authority” and “taxing district” can also be confusing. Many
entities have direct levy authority and are special taxing districts. However, some entities do not have
direct taxing authority but can essentially levy through a city or county. Since the ultimate discretion
remains with the true taxing authority—the county or city—these entities are not taxing authorities and
may not necessarily be special taxing districts.
Taxing Districts
A taxing district can be distinguished from a taxing authority in that “district” describes the territory of
the levy and “authority” references the power to levy. These are not statutorily defined distinctions and
both refer to the associated entity to some degree. They are also largely synonymous for counties, cities,
towns, and school districts. Some differences can be meaningful, however, when it comes to special
taxing districts.
Special Taxing Districts
A special taxing district can include any other political subdivision of the state that has the power to
adopt and certify a property tax levy to the county auditor, as determined by the Department of Revenue.
For the purposes of property taxation and property tax state aids, the term “special taxing districts”
includes the following entities: 1
1. Watershed districts
2. Sanitary districts
3. Regional sanitary sewer districts
4. Regional public library districts
5. Park districts
6. Regional railroad authorities
7. Hospital districts
8. St. Cloud Metropolitan Transit Commission
9. Duluth Transit Authority
10. Regional development commission
11. Housing and redevelopment authorities
12. Port authorities
13. Economic development authorities
14. Metropolitan Council
15. Metropolitan Airports Commission
1
Minn. Stat. § 275.066.
TAXING AUTHORITIES AND DISTRICTS
UP TO DATE THROUGH 2015 SESSION
05.01 - 1
CHAPTER 5: TAX LEVIES AND THE BUDGETING PROCESS
16. Metropolitan Mosquito Control Commission
17. Morrison County Rural Development Financing Authority
18. Croft Historical Park District
19. East Lake County Medical Clinic District
20. Floodwood Area Ambulance District
21. Middle Mississippi River Watershed Management Organization
22. Emergency Medical Services Special Taxing Districts
23. A county levy for watershed management purposes
24. Southern St Louis County Special Taxing District, Chris Jensen Nursing Home
25. An airport authority
26. Any other political subdivision of the state, excluding counties, school districts, cities, and towns,
that has the power to adopt and certify a property tax levy to the county auditor, as determined by the
Department of Revenue
Special Taxing Districts Determined by the Department of Revenue
Item 26 of the defined list of special taxing districts under Minn. Stat. § 275.066 provides a catch-all that
is open to any other political subdivision with the power to levy as determined by the Department of
Revenue. The following entities qualify as special taxing districts on the basis that (a) they are deemed
to be political subdivisions of the state by the statute or law that created them, and (b) they have the
power to adopt and certify a property tax levy to the county auditor.
1. Park Museum Fund of the Minneapolis Park and Recreation Board
2. Nashwauk Area Ambulance District
3. Cross Lake Area Water and Sewer Board
4. Virginia Area Ambulance District
5. Becker County Economic Development Authority
6. Chisholm/Hibbing Airport Authority
7. Cedar Lake Area Water and Sanitary Sewer District
8. Banning Junction Area Water and Sanitary Sewer District
9. Moose Lake Fire Protection District
10. Cloquet Area Fire and Ambulance Special Taxing District
Implications of Authority vs. Special Taxing District Distinctions
Note that item 23 of the defined list of special taxing districts under Minn. Stat. § 275.066 exemplifies a
situation in which a special taxing district has been defined for what is not a taxing authority that is
separate from the county. This distinction means that this levy would be certified and represented on
proposed notices and tax statements as a levy of a special taxing district, but if it were absent from this
definition, it would have been reflected as part of the county levy. By defining this levy as a special
taxing district, however, there may be confusion as to whether this levy should be included in measuring
a county’s levy for calculating aid formulas or enforcing levy limits. These determinations will be made
by the Department of Revenue as issues arise.
Non-Taxing Districts
Service Districts
There are other types of districts not defined as special taxing districts that allow a county, city, or town
to levy at different levels for separate defined areas that may be subject to different service levels. These
TAXING AUTHORITIES AND DISTRICTS
UP TO DATE THROUGH 2015 SESSION
05.01 - 2
CHAPTER 5: TAX LEVIES AND THE BUDGETING PROCESS
districts are not considered taxing districts independent of the county, city, or town because they affect
the allocation of levies more than they describe a separate levying entity. Section 06.04 describes urban
and rural service districts and subordinate service districts in greater detail.
There are a variety of other similar service districts, including:
 Fire protection districts in towns
 Ambulance service districts in towns
 Storm sewer improvement districts in cities or towns
 Lake improvement districts in counties
Non-Property Tax Service Districts
There are also service districts that impose a fee or service charge which is not a part of property tax
levies, even though some may have a basis on net tax capacity. Most notably, Chapter 428A of the
Minnesota Statutes allows cities to establish special service districts where special services are rendered
and paid from revenues collected from service charges. The key difference between this special service
district and the subordinate service districts for counties and towns is that these are service charges, not
property tax levies, even though they are based on net tax capacity and payable and collected in the
same manner as property taxes. The service charges are not included in computations of tax increments,
fiscal disparities, or any other law that applies to general ad valorem levies. The establishment of a new
special service district after June 30, 2028 requires special legislation.
Another example of non-property tax service districts are housing improvement districts.
Special Taxing Districts vs. Special Levies
It should be noted that special taxing districts are not the same as special levies, which are a defined set
of levies that are not subject to levy limits. Special taxing districts have not been subject to general levy
limits, which have mostly applied to counties and cities of 2,500 or more. 2
Organization Date of Special Taxing Districts
Special taxing districts organized on or before July 1 in a calendar year, or districts that were organized
in a prior year that have not previously levied, may certify a levy to the county auditor in that same year
for property taxes or special assessments to be payable in the following calendar year. These districts
must inform the county auditor of their intent to levy and provide a complete list of the tax parcels in the
district and a map showing the boundaries of the district. Special taxing districts organized after July 1
in a calendar year may not certify a levy of property taxes or special assessments until the following
calendar year. Any changes in the boundaries of a special taxing district must also be reported to the
county auditor by July 1 in order to levy within the new boundaries for taxes payable in the following
calendar year. 3
2
3
See Section 05.05 for more information on levy limits.
Minn. Stat. § 275.067.
TAXING AUTHORITIES AND DISTRICTS
UP TO DATE THROUGH 2015 SESSION
05.01 - 3
CHAPTER 5: TAX LEVIES AND THE BUDGETING PROCESS
Cross-County Jurisdictions
When a taxing authority spans county boundaries, a home county auditor is determined to calculate
levies for the taxing authority. In the case of school districts, the home county is the county in which the
administrative offices of the school district are located. 4 For other cross-county jurisdictions there is no
statutory direction for determining the home county, but it is usually the county with the most value for
that taxing district or where offices are located. The counties may come to an agreement or the
Department of Revenue will assign a home county. Levies should be certified by the jurisdictions to the
home county auditor. The home county auditor certifies proposed and final levies and local tax rates to
the other county auditor(s). The county auditors that are not the home county auditor must supply values
and other information necessary to calculate rates to the home county auditor.
For proposed tax notices, the home county auditor must estimate the levy or rate if the other county has
not certified the appropriate information, and the other county auditor must furnish an estimate to the
home county auditor, if requested by the home county auditor. 5
For final levies, if the home county auditor has not received from the other county auditor(s) the local
tax rate or net tax capacity by January 15, the home county auditor may levy taxes for the overlapping
district by estimating the local tax rate or the net tax capacity. A county auditor who has not furnished
the local tax rate or net tax capacity by January 15 must, on request, furnish the home county auditor of
an estimate of the tax capacities or the local tax rate. The auditor may request the assistance of the
county assessor in determining the estimate. Subsequent adjustments must be made after the correct
local tax rate or net tax capacity has been certified. 6
Auditors to Verify Tax Authority
Auditors are responsible for verifying the levy authority for each levy. If any authority certifies a greater
levy amount than is permitted by any limitation, the auditor shall extend only the amount of tax as
limited. 7
As a resource to assist county auditors in this function, the Department of Revenue has periodically
issued a “Blue Book” summarizing the levy authority provisions that it has found in statutes and
uncodified laws. This manual can be found on the Department of Revenue’s website, but it has not been
updated since 2000. It is recommended that county auditors prompt the certifying jurisdiction to provide
the auditor with the authority under which the levy is being assessed. Auditors may then be able to
verify the authority and check for any limitations that may apply.
State Codes
The Department of Revenue prescribes the codes to be used for state reporting for each taxing authority
and district. When a new special taxing district or any other taxing district is organized, the county
4
Minn. Stat. § 275.07, subd. 2.
Minn. Stat. § 275.065, subd. 1a.
6
Minn. Stat. § 275.08, subd. 2 to 4.
7
Minn. Stat. § 275.08, subd. 1.
5
TAXING AUTHORITIES AND DISTRICTS
UP TO DATE THROUGH 2015 SESSION
05.01 - 4
CHAPTER 5: TAX LEVIES AND THE BUDGETING PROCESS
should contact the Department of Revenue to be assigned the code that the district will use for reporting
proposed and final levies and for the state abstracts. The Department of Revenue should also be
contacted for the proper assignment of a code when taxing districts are merged or consolidated. State
codes are not reused and are very important when certifying state aids and credits.
TAXING AUTHORITIES AND DISTRICTS
UP TO DATE THROUGH 2015 SESSION
05.01 - 5