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HF1248 (Legislative Session 94 (2025-2026))

Sales and use tax exemption provisions modified for construction materials purchased by certain contractors.

Related bill: SF1724

AI Generated Summary

This bill proposes amendments to Minnesota's tax code to modify sales and use tax exemptions for construction materials purchased by certain contractors. Specifically, it expands tax exemptions and establishes a refund provision for materials, supplies, and equipment used in projects for certain public and nonprofit entities.

Key provisions include:

  1. Exemptions for Construction Materials:

    • Contractors, subcontractors, and builders purchasing materials for constructing or renovating buildings used primarily by certain entities would be exempt from sales and use tax.
    • These entities include:
      • School districts
      • Local governments
      • Hospitals and nursing homes operated by political subdivisions
      • County law libraries and public library systems
      • Nonprofit organizations
      • Hospitals, outpatient surgical centers, and critical access dental providers
      • Nursing homes and boarding care homes

  2. Exemptions for Public Infrastructure Projects:

    • Materials and supplies purchased for constructing or renovating public infrastructure (such as roads, bridges, and water treatment facilities) by contractors working for school districts or local governments are also exempt.

  3. Tax Collection and Refund Mechanism:

    • The tax on exempt purchases must initially be applied and collected as if the standard rate applies.
    • A refund process is established under Minnesota Statutes section 297A.75, allowing eligible entities to claim back taxes paid.

The bill was introduced in the Minnesota House of Representatives and referred to the Committee on Taxes for further consideration.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 19, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Adds new categories of entities eligible for tax exemption under this section."
      ],
      "removed": [
        "None"
      ],
      "summary": "The bill refers to exemptions for certain entities related to the purchase of construction materials, supplies, and equipment under section 297A.70.",
      "modified": [
        "Clarifies the definition and application of tax exemptions for various subdivisions."
      ]
    },
    "citation": "297A.70"
  },
  {
    "analysis": {
      "added": [
        "Inclusion of library systems under entities eligible for exemptions."
      ],
      "removed": [
        "None"
      ],
      "summary": "This section defines public library systems relevant to the bill's context of exemptions.",
      "modified": [
        "Clarification of what constitutes a library system for exemption purposes."
      ]
    },
    "citation": "134.001"
  }
]

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