Purpose

Provide a refundable exemption from sales and use tax for construction materials used in two Edina park projects, aiming to support development of Fred Richards Park and Braemar Park. The exemption would apply to materials purchased within a specific timeframe and would be refunded through the state tax system.

Main Provisions

• Exemption refund for construction materials
  • Materials and supplies used or consumed in and equipment incorporated into construction, reconstruction, upgrade, expansion, renovation, or remodeling for the two Edina projects are eligible for a sales and use tax exemption.
  • Eligible projects: development of Fred Richards Park (as identified in its Master Plan) and improvements to Braemar Park (as identified in its Master Plan).
  • Eligible purchases must occur after December 31, 2023 and before January 1, 2030.
• How the tax treatment works
  • The exemption is implemented as if the normal sales tax rate under Minnesota Statutes section 297A.62 (subdivisions 1 and 1a) applied, and then the tax is refunded in the same manner as refunds for other eligible projects under Minnesota Statutes section 297A.75 (subdivision 1, clause 17).
  • Refunds for eligible purchases would not be issued until after June 30, 2025.
• Funding for refunds
  • The money needed to pay these refunds is appropriated from the general fund to the commissioner of revenue.

Timing and Scope

• Geographic scope: City of Edina, Minnesota.
• Projects covered: Fred Richards Park Master Plan development and Braemar Park Master Plan improvements.
• Time window for purchases: after December 31, 2023 and before January 1, 2030.
• Refund timeline: refunds issued after June 30, 2025.

Significant Changes to Existing Law

• Creates a new, temporary, refundable sales tax exemption specifically for two Edina park-related construction projects.
• Requires an appropriation from the general fund to fund the refunds, administered by the commissioner of revenue.
• Applies the standard refund mechanism used for other eligible projects under Minnesota tax law, rather than creating a new separate process.

Impact Highlights

• Public policy goal: support park development in Edina by reducing the after-tax cost of construction materials.
• Fiscal impact: shifts some sales tax revenue to later refunds; the exact net effect depends on eligible purchases and the refund process.
• Administration: handled by the commissioner of revenue, with funding appropriated from the general fund.

Relevant Terms - sales and use tax, exemption, refundable exemption - construction materials, materials and supplies, equipment - incorporated into construction, reconstruction, upgrade, expansion, renovation, remodeling - City of Edina, Fred Richards Park Master Plan, Braemar Park Master Plan - Minnesota Statutes chapter 297A, section 297A.62, section 297A.75 - refunds, eligible purchases - appropriation, general fund, commissioner of revenue - after December 31, 2023; before January 1, 2030 - after June 30, 2025