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HF3501 (Legislative Session 94 (2025-2026))

Refundable sales and use tax exemption created for certain items and services purchased to repair property damage caused by natural disasters.

Related bill: SF3744

AI Generated Summary

Purpose

  • Create a refundable sales tax exemption for certain items and services purchased to repair or remediate damage to property caused by a natural disaster.

What the bill does

  • Adds a new provision (Subdivision 41) to Minnesota Statutes to define and implement the disaster-related exemption.
  • Establishes that the exemption applies to specific repair materials and services after a natural disaster.

Eligible items and services

The exemption covers purchases used to repair or remediate disaster-damaged property for the following categories: - Windows - Doors - Siding materials - Insulation - Trusses, shingles, and other roofing materials - Power generators - Equipment used for sandbagging - Replacement parts for pumps, valves, and other small equipment - Plywood - Tree removal and other services related to hauling debris

Eligibility conditions and timing

  • The disaster must be officially declared by either the federal government or a local official under section 12.29.
  • The purchase must occur within two years of the disaster declaration.

Tax treatment and refund mechanism

  • The exemption is applied by treating the purchase as if the standard sales tax rates in Minnesota apply (as per section 297A.62) and then refund the tax under section 297A.75.
  • In other words, the tax is collected at the time of purchase and subsequently refunded through the state’s refund process.

Changes to existing law

  • Creates a new subdivision (Subd. 41) within Minn. Stat. 2024 section 297A.67 to establish the exemption.
  • Ties eligibility to disaster declarations and a two-year window.
  • Uses the existing tax collection-and-refund framework (section 297A.75) for the exemption.

Practical impact and limitations

  • Provides financial relief for individuals and businesses repairing property after a natural disaster by reducing tax costs on specified repair materials and services.
  • Limitations include: only applies to the listed items and services, only after a disaster is declared, and only within two years of that declaration.

Related references (context)

  • Disaster declarations: federal government or local official under section 12.29
  • Tax rate application and refunds: sections 297A.62 and 297A.75

Relevant Terms - refundable exemption - sales tax exemption - natural disaster - disaster declaration - section 12.29 - Minnesota Statutes 2024 section 297A.67 - Minnesota Statutes 2025 Supplement section 297A.75 - 297A.62 - 297A.75 - repairs - remediation - windows - doors - siding materials - insulation - trusses - roofing materials - power generators - sandbagging equipment - pumps - valves - plywood - debris hauling - local official - federal government - two years

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 19, 2026HouseActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Exemption for specified repair materials and services (e.g., windows, doors, siding, insulation, roofing, generators, debris removal, etc.) following a natural disaster."
      ],
      "removed": [],
      "summary": "This bill creates a sales tax exemption for items and services used to repair or remediate damage caused by a natural disaster, by revising Minnesota Statutes 2024 section 297A.67.",
      "modified": [
        "Defines eligibility window and conditions (disaster declaration by federal government or local official under section 12.29; purchases within two years of declaration).",
        "Links the exemption to the existing tax rate application framework and refund mechanism (as if rates under 297A.62 subdivisions 1 and 1a applied and then refunded per 297A.75)."
      ]
    },
    "citation": "297A.67",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references disaster declarations under Minnesota Statutes section 12.29 to determine eligibility for the exemption.",
      "modified": []
    },
    "citation": "12.29",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill relies on the refund mechanics in 297A.75 to administer the exemption, specifying that exempt purchases are to be treated as if the standard tax rate applies and then refunded under 297A.75.",
      "modified": [
        "Interprets the exemption’s tax treatment to conform with the refund process described in 297A.75."
      ]
    },
    "citation": "297A.75",
    "subdivision": "subd.1; subd.2; subd.3; subd.6; subd.7; subd.8"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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