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HF159 (Legislative Session 94 (2025-2026))

Burnsville; refundable sales and use tax exemption provided for construction materials for a city hall.

Related bill: SF1425

AI Generated Summary

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

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 10, 2025HouseActionIntroduction and first reading, referred toTaxes
February 17, 2025HouseActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Temporary exemption for Burnsville city hall construction materials under 297A; purchases between 12/31/2024 and 1/1/2029."
      ],
      "removed": [],
      "summary": "Temporary Burnsville city hall construction materials sales tax exemption; uses 297A framework.",
      "modified": [
        "No direct change to 297A; relies on existing exemption/refund framework."
      ]
    },
    "citation": "297A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill requires the tax to be imposed as if the 297A.62 rate with subdivisions 1 and 1a applied, then refunded under 297A.75.",
      "modified": [
        "Uses the 297A.62 rate application to a temporary exemption; does not create new tax rate; matches existing refund method."
      ]
    },
    "citation": "297A.62",
    "subdivision": "subd. 1 and 1a"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Refunds for eligible purchases must follow 297A.75's refunds mechanism; refunds are not issued until after June 30, 2025.",
      "modified": [
        "Specifies refunds under 297A.75, with a delay until after June 30, 2025."
      ]
    },
    "citation": "297A.75",
    "subdivision": "subd. 1, clause 17"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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