SF2854

Purpose of the Bill

The purpose of this bill is to provide tax incentives for the construction of large research and development (R&D) campuses in Minnesota. It aims to encourage investment in such facilities by offering a financial benefit in the form of a sales and use tax exemption.

Main Provisions

• Refundable Tax Exemption: The bill introduces a refundable exemption from sales and use taxes for materials, supplies, and equipment used in constructing or improving R&D campuses.
• Eligibility Criteria: To qualify for this exemption, the R&D campus must include a laboratory space of at least 250,000 square feet and have a construction cost of at least $200 million within a period of 32 months.
• Project Types Included: This exemption also applies to customer experience centers and related facilities located on the site of the R&D campus.

Significant Changes to Existing Law

• Additional Subdivision: The bill amends Minnesota Statute 297A.71 by adding a new subdivision specifically for R&D campuses.
• Refund System: Although the tax will initially be imposed and collected, it will be refunded following the existing procedures outlined in Minnesota Statute 297A.75, which is consistently used for similar large-scale projects.
• Expiration Date: The provision for this tax exemption is temporary and is set to expire on March 1, 2028.

Relevant Terms

• Sales and use tax exemption
• Research and development campuses
• Laboratory space requirements
• Construction cost eligibility
• Refundable tax mechanism