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HF1710 (Legislative Session 94 (2025-2026))

Fairmont; refundable sales and use tax exemption provided for construction materials.

Related bill: SF220

AI Generated Summary

Purpose

Create a temporary, refundable sales and use tax exemption for construction materials used in specific municipal projects in the City of Fairmont. The goal is to reduce the tax burden on materials, supplies, and equipment used in these projects and to support city construction efforts.

Main Provisions

  • Eligible projects in Fairmont:

    • UV biosolids project
    • Storage tank project
    • Public works building

  • Eligible items:

    • Materials and supplies used or consumed in the projects
    • Equipment incorporated into the projects
    • Applies to construction, reconstruction, upgrade, expansion, renovation, or remodeling

  • Purchase windows (when the exemption applies):

    • UV biosolids project: after September 11, 2024 and before January 11, 2027
    • Storage tank project: after January 1, 2025 and before June 2, 2026
    • Public works building: after May 31, 2021 and before March 8, 2024

  • How the exemption works (tax treatment):

    • The exemption is handled as a refundable process: the tax is imposed and collected as if the normal rate under Minnesota law (chapter 297A) applied, and then refunded in the same way as other refundable projects.

  • Refund timing:

    • Refunds for eligible purchases must not be issued until after June 30, 2025.

  • Funding for refunds:

    • The amount needed to pay these refunds is appropriated from the general fund to the commissioner of revenue.

Significance and Implications

  • This bill creates a targeted, temporary tax relief for specific Fairmont construction projects, using a refund mechanism rather than a straightforward exemption.
  • It requires state funding (general fund) to cover the refunds and specifies timing for when refunds will be issued.
  • It relies on existing tax statutes (Minnesota Statutes chapter 297A) to determine how the tax would be collected and then refunded.

Changes to Existing Law

  • Establishes a new, city-specific refundable exemption for certain construction materials and equipment used on designated Fairmont projects.
  • Adds a dedicated appropriation to fund the refunds.
  • Sets project-specific purchase windows and a delayed refund issuance timeline, integrating with existing refund processes under 297A.75.

Administration and Implementation Notes

  • The refunds are administered through the commissioner of revenue, using the general fund appropriation for payment.
  • The exemption interacts with existing sales and use tax rules under Minnesota Statutes chapter 297A (including 297A.62 and 297A.75).

Relevant Terms - sales and use tax - exemption - refundable exemption - materials and supplies - equipment - construction, reconstruction, upgrade, expansion, renovation, remodeling - UV biosolids project - storage tank project - public works building - City of Fairmont - Minnesota Statutes chapter 297A - 297A.62 - 297A.75 - refunds - commissioner of revenue - general fund - appropriation - June 30, 2025

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 27, 2025HouseActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Exemption for materials used in a UV biosolids project, a storage tank project, and a public works building in the city of Fairmont from sales and use tax, with purchase timing windows.",
        "Refund mechanism tied to the existing 297A framework (imposition and refund process described in 297A).",
        "General fund appropriation to the commissioner of revenue to pay refunds."
      ],
      "removed": [],
      "summary": "This bill creates a targeted sales and use tax exemption in the city of Fairmont for construction materials used in specified projects, authorized under Minnesota Statutes chapter 297A.",
      "modified": [
        "Imposes that the tax for these eligible purchases be treated as if the 297A.62 rate applied and then refunded in the same manner provided for projects under 297A.75."
      ]
    },
    "citation": "297A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Explicitly states that the tax application for eligible Fairmont projects uses the rate and structure described in 297A.62, subdivisions 1 and 1a."
      ],
      "removed": [],
      "summary": "The bill references the standard rate and refund structure under 297A.62 to apply to the Fairmont exemptions, with refunds processed under 297A.75, subd. 1, clause (17).",
      "modified": [
        "Refunds for these exemptions are aligned with 297A.75, subd. 1, clause (17)."
      ]
    },
    "citation": "297A.62",
    "subdivision": "subd. 1 and subd. 1a"
  },
  {
    "analysis": {
      "added": [
        "Refund timing for eligible purchases: refunds must not be issued until after June 30, 2025."
      ],
      "removed": [],
      "summary": "The bill references the refund provisions under 297A.75, subd. 1, clause (17), determining when refunds are issued for eligible purchases.",
      "modified": []
    },
    "citation": "297A.75",
    "subdivision": "subd. 1, clause (17)"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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