Effective Jan. 1, 1998, a single tax called the solid waste management tax will replace the 6.5 percent sales tax on municipal solid waste management services (SCORE tax) and the commercial/nonresidential garbage collection bills.
Don Williamson, owner of West Central Sanitation the company that serves Paynesville, said the new tax replaces an old method of payment and makes the process less complicated. “This is not a new tax.”
“Once a year, Paynesville residents would see an additional $2 fee on their bills every July,” Williamson explained. “This new tax will be spread out monthly, replacing that $2 yearly assessment.”
Residents pay the SCORE tax and an annual $2 assessment; nonresidential customers pay the SCORE tax and an assessment of 60 cents per cubic yard of collection capacity. Under the simplified, combined system, residents will pay a 9.75 percent tax on collection services and commercial/nonresidential genera-tors will pay 17 percent. Because the tax is a percentage of the service bill, the liability for tax generally will rise as the amount of waste generated rises. Most generators will pay the same amount of tax as under the current SCORE tax and solid waste generator assessment.
The tax is projected to raise about $44 million per year and will fund the state’s commitment to manage solid waste safely. Fifty percent or $22 million, whichever is greater, is dedicated to fund landfill cleanup and solid waste system activities that reduce pollution from existing landfills, and the remainder will support recycling and other projects.
“The tax is revenue neutral,” Williamson stressed. “It is not meant to raise more than what is needed. If more is raised, then the tax will be lowered.”
As an example, Williamson said a business with a small dumpster now pays $10 to have the dumpster emptied, plus sales tax and 60 cents per cubic yard (about $1.20), totalling about $11.85. Under the new system, that same business would probably only be spending about $11.70 per month because the expense is spread out more evenly throughout the year.
“This combined tax introduces a higher level of accountability and eliminates confusion about the tax’s purpose,” Art Dunn, acting director of the Minnesota Office of Environmental Assistance, said. “This change makes the garbage bill simpler, more equitable, and hopefully easier to understand. Overall, the tax reflects the costs associated with financing the solid waste system.”
“Collecting both the sales tax and generator assessment created compliance difficulties for local governments and waste haulers, confusion for residential and commercial waste generators, and administrative difficulties for state government,” George Hoyum, director, special taxes, Minnesota Department of Revenue, said.
The SCORE tax has been collected since 1989 when the Minnesota Legislature established a comprehensive, statewide waste reduction and recycling program. Based on recommendations of the select committee on recycling and the environment (SCORE), the SCORE sales tax funds projects that reduce the state’s reliance on landfills for waste disposal and improve recycling, source reduction, yard waste composting and waste education activities.
In 1993, the Legislature adopted the solid waste generator assessment, which funds a variety of important activities to protect Minnesota’s ground water resources. It also funds the Minnesota Closed Landfill Cleanup Program, the principal draw on the projected collections. It pays for construction, maintenance and cleanup costs at closed landfills as designated under state law.
Minnesota’s waste reduction and recycling program has dramatically improved the state’s overall recycling collection rate from less than nine percent in 1989 to more than 45 percent in 1996. In addition, the program raises source material reduction awareness and participation, management of problem materials, and toxic reduction.