SF1981

Purpose

Adjusts a sales and use tax exemption related to construction materials for a Ramsey water project, clarifying how the exemption works and when it applies.

What the bill covers

• Exemption from sales and use tax for materials, supplies, and equipment used in the construction, reconstruction, upgrade, expansion, renovation, or remodeling of:

  • a new water treatment plant, and
  • trunk water main improvements in the city of Ramsey.

• Eligibility window for purchases: only those bought after December 31, 2022 and before July 1, 2027 qualify.

How the tax and refunds work

• The exemption applies, but the tax is still collected as if the standard rate (under Minnesota Statutes section 297A.62, subdivisions 1 and 1a) applied, and then the tax is refunded in the same manner used for eligible projects under Minnesota Statutes section 297A.75, subdivision 1, clause 17.
• Refunds for eligible purchases may begin after June 30, 2023 and must be issued before July 1, 2027.

Scope and intent

• Applies specifically to materials, supplies, and equipment used in the Ramsey water project described above.
• Creates a targeted, temporary sales tax exemption with a prescribed refund process and timeframe.

Significance and changes to law

• codifies a time-limited exemption for construction materials tied to Ramsey’s water infrastructure projects,
• clarifies that the exemption operates through a tax-imposed-then-refunded process, using the existing refund framework in the state tax code (297A.62 and 297A.75),
• sets explicit purchase date window and refund period.

Effective dates (summary)

• Eligible purchases must occur in the window: after 12/31/2022 and before 7/1/2027.
• Refunds may be issued from after 6/30/2023 up to 7/1/2027.

Relevant Terms - sales and use tax - exemption - exemption refund - construction materials - materials and supplies - equipment - water treatment plant - trunk water main improvements - city of Ramsey - Minnesota Statutes 297A.62 - Minnesota Statutes 297A.75 - December 31, 2022 - July 1, 2027 - refund window - clause 17