HF869

Purpose

Provide a temporary, refundable exemption from Minnesota sales and use tax for construction materials used in certain building and renovation projects in Hills-Beaver Creek Independent School District No. 671.

Main Provisions

• Exemption/refund for Construction Materials
  • Materials, supplies, and equipment used in and incorporated into construction, reconstruction, upgrade, expansion, renovation, or remodeling of specific projects are exempt from sales and use tax.
  • The exemption applies only to purchases made after February 29, 2024 and before January 1, 2026.
• Eligible Projects in Hills-Beaver Creek ISD No. 671
  • A new elementary school and parking lot.
  • Repairs to a gymnasium.
  • Locker rooms.
  • A vehicle garage.
  • A bus garage building.
• Tax Treatment and Refund Process
  • Taxes are collected at the normal rate as if the exemption did not apply, and then refunded in the same manner used for other projects under the state’s refund rules.
  • The refund process follows Minnesota’s existing methods (referenced in statute sections dealing with refunds for certain projects).
• Funding for Refunds
  • The money needed to pay these refunds is appropriated from the state general fund to the commissioner of revenue.

Significance and Changes to Law

• Creates a targeted, temporary tax exemption specific to Hills-Beaver Creek ISD No. 671 for particular construction projects.
• Uses a refund mechanism (not an immediate at-point-of-sale exemption) and requires state funding via appropriation to cover refunds.
• Sets a defined time window for eligible purchases (Feb 29, 2024 to Jan 1, 2026).

Timeline and Administration

• Purchase window: after February 29, 2024 and before January 1, 2026.
• Administration: refunds processed through the commissioner of revenue using existing refund procedures.

What this bill aims to accomplish

• Lower the cost of building and upgrading facilities in the Hills-Beaver Creek Independent School District No. 671 by offsetting sales and use tax through a temporary, state-funded refund.

Relevant Terms sales and use tax, exemption, refundable exemption, construction materials, materials and supplies, equipment, construction, reconstruction, upgrade, expansion, renovation, remodeling, Hills-Beaver Creek Independent School District No. 671, new elementary school, parking lot, gymnasium, locker rooms, vehicle garage, bus garage, commissioner of revenue, general fund, appropriation, Minnesota Statutes, refund, 297A.62, 297A.75, clause for refunds.