This 'Good Question' comes from Candace Seidl, who e-mailed to ask why sales tax do not apply to fares.
Similar to cab fares or parking fees, sales taxes are not charged on transit fares. Generally speaking, such services are not taxed in Minnesota.
While sales taxes do not apply to fares, they are a common source of revenue for transit agencies across the country and are an important source of revenue for Metro Transit.
Nearly half of Metro Transit’s operating revenue comes from the Motor Vehicle Sales Tax, which applies to new and used car sales. The Counties Transit Improvement Board, which provides around 7 percent of Metro Transit’s operating revenue, is funded by a $20 motor vehicle sales tax and a quarter-cent sales tax that has been levied in Anoka, Dakota, Hennepin, Ramsey and Washington counties since 2008.
Metro Transit’s other sources of revenue include customer fares, state and regional funding and federal grants.
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