SF455

Senate File No. 455 is a legislative bill proposing an amendment to the current Minnesota sales and use tax laws. This amendment aims to provide a tax exemption to certain nonprofit outpatient rehabilitation clinics for items purchased that are used in providing outpatient rehabilitation services.

To qualify for this exemption, a nonprofit physical rehabilitation clinic must meet several criteria: 1. It must be organized and operate for charitable purposes as defined under section 501(c)(3) of the Internal Revenue Code. 2. It should provide physical therapy, occupational therapy, or speech therapy. 3. At least 50% of its patients in the most recent calendar year must be covered by medical assistance or MinnesotaCare. 4. The clinic must have provided at least 10,000 patient encounters in the most recent calendar year to patients who are uninsured or qualify for medical assistance, MinnesotaCare, or a home and community-based services program. 5. The clinic must offer a sliding scale for payment for services. 6. It should have no more than 15% of its patients covered by private health insurance in the most recent calendar year.

The proposed tax exemption will not apply to certain products and services including the purchase of prepared food, candy, soft drinks, and to construction materials for facilities not used principally by qualifying clinics.

The goal of this bill is to support nonprofit clinics that play a crucial role in providing essential rehabilitation services to underserved populations, by reducing their operational costs through tax exemptions on necessary purchases.