State Fair lawn parking under tax scrutiny

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In the eyes of many residents on the east side of the Minnesota State Fairgrounds, a certain state agency should keep its hands off a neighborhood tradition.

The Minnesota Department of Revenue is dunning those who sell parking space on their lawns during the fair for sales tax on those earnings, in some cases going back six years. Residents on Canfield Avenue, Arona Street, Midway Parkway and Simpson Street are among those known to have been contacted.

The reaction? “It varies greatly,” said David Delaney, a revenue tax supervisor in the Sales and Use Tax Division. “Many people are upset about the sales tax law applying to State Fair parking, but others have been cooperative and very courteous. The department’s primary objective is to encourage voluntary compliance by working with homeowners to help them understand the tax laws and by making paying taxes as easy as possible.”

While those people the Park Bugle talked to don’t necessarily dispute that the income is subject to tax, they don’t think it’s right to collect it, though nobody would say so for attribution.

Some feel they are performing a public service; others say the parking fees are a form of compensation for the noise and hassle associated with living close to the fairgrounds. For seniors on a fixed income, it’s a way to generate a little extra cash; for younger people, the opportunity to defray school expenses.

“I work my tail off during the fair; it’s the hardest money I’ve ever made,” said a Simpson Street resident. “I’ve said for years all the parkers should boycott one year and hear from the public about the horrible parking situation. Then maybe the naysayers would change their tune.”

Another thing people don’t like to talk about is how much money can be made during the fair. With the ebb and flow of traffic and fees ranging from $5 to $20 per space on any given day, that’s somewhat difficult to estimate. But it’s probably safe to say that somebody close to Snelling Avenue with space for 10 cars can take in several thousand dollars during the 12-day run.

For the record, the Department of Revenue provides this background: In August 2000, a letter was sent to all homeowners within a four-block radius of the fairgrounds, informing them that lawn parking during the fair was subject to sales tax. In August 2010, department staff visited residents in person to provide information about tax liability and how to comply. And following that year’s fair, letters were sent to addresses where it had been observed that fees were being charged. About 10 percent of the recipients responded.

This past September, about 80 letters were sent to households that did not answer the earlier communication and about 60 percent of those recipients got in touch with the Department of Revenue by its Oct. 1 deadline. The department acknowledges that it may have missed some lawn parkers.

“We are reviewing our outreach and education efforts to ensure that the information taxpayers need to voluntarily comply is widely available,” Delaney said.

This underground economy of sorts dates back at least to the 1930s, when the going rate for parking on lawns along Snelling was 25 cents per car. Demand grew in the 1940s as State Fair crowds grew and on-street parking became harder to find.

By the mid-1970s, lawn parking was commonplace as far east as Hamline Avenue, although that began to change with the advent of the State Fair’s Park & Ride program. Gradually, fairgoers warmed to the notion of parking for free in a remote lot and busing, again for free, to the fairgrounds. According to Brienna Schuette, the State Fair’s marketing and communications manager, about 500,000 people rode the shuttles to and from the fair in 2011, the most recent year for which records are available.

Lawn parking has contracted back toward Snelling, but there are still plenty of people doing it. And unhappy as they may be about paying sales tax, nobody told the Park Bugle flat out that they were getting out of the business.

Roger Bergerson is a freelance writer and local historian who lives in Como Park.