HF159

Purpose

To provide a temporary sales and use tax relief for the materials used to build a new city hall in Burnsville. The bill creates a refundable exemption so that construction materials, supplies, and equipment used in building, upgrading, expanding, renovating, or remodeling the Burnsville city hall are not taxed, effectively reducing project costs.

Main Provisions

• Exemption scope: Materials, supplies, and equipment used or consumed in and incorporated into the construction, reconstruction, upgrade, expansion, renovation, or remodeling of the new Burnsville city hall are exempt from sales and use tax.
• Time window: The exemption applies to purchases made after December 31, 2024 and before January 1, 2029.
• Tax handling: The exemption is processed as if the tax rate under Minnesota Statutes section 297A.62 (subdivisions 1 and 1a) applied, and then refunded in the same manner used for certain projects under Minnesota Statutes section 297A.75 (subdivision 1, clause 17).
• Refund timing: Refunds for eligible purchases are not issued until after June 30, 2025.
• Funding: The money needed to pay these refunds is appropriated from the general fund to the Commissioner of Revenue.

Significant Changes to Existing Law

• Creates a temporary, targeted sales and use tax relief (a refundable exemption) specifically for the Burnsville city hall construction project.
• Modifies the application and timing of refunds for eligible purchases, tying them to the existing refund framework in Minnesota tax law.
• Establishes a general fund appropriation mechanism to fund the refunds, delegating payment administration to the Commissioner of Revenue.

Practical Effect

• Builders and suppliers working on Burnsville’s city hall project will face lower or no sales tax on qualifying materials and equipment within the stated timeframe, potentially lowering project costs.
• State revenue is affected temporarily due to the refund mechanism, with state funds providing the refunds to recipients after the specified date.

Relevant Dates (quick reference)

• Purchase window: January 1, 2025 through December 31, 2028 (inclusive)
• First eligible refunds: after June 30, 2025

Beneficiaries

• City of Burnsville (construction project)
• Vendors and suppliers supplying materials and equipment used in qualifying construction

Administrative/Fiscal

• State funding source: General Fund
• Responsible agency: Department of Revenue (Refunds administered by the Commissioner of Revenue)

Relevant Terms

• sales and use tax exemption
• refundable exemption
• construction materials and equipment
• Burnsville City Hall
• Minnesota Statutes 297A.62
• Minnesota Statutes 297A.75
• refund timing
• general fund appropriation
• Commissioner of Revenue