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HF3932 (Legislative Session 94 (2025-2026))

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

Related bill: SF3883

AI Generated Summary

Purpose

Provide a temporary sales and use tax exemption for construction materials used in two specific Washington County projects, with a process to refund the taxes collected.

Main Provisions

  • Exemption: Materials, supplies, and equipment used or consumed in the construction, reconstruction, upgrade, expansion, renovation, or remodeling of the Stafford Library Remodel project and the South Highway Shop project in Washington County are exempt from sales and use tax under Minnesota law.
  • Time window: The exemption applies only to purchases made after June 30, 2026 and before January 1, 2029.
  • Tax handling: The tax that would normally be collected is to be treated as if the standard rate under Minnesota Statutes section 297A.62, subdivisions 1 and 1a, applied, and then refunded in the same manner used for other eligible projects.
  • Refund timing: Refunds for eligible purchases must not be issued until after June 30, 2026.

Funding and Administration

  • Funding: The amount needed to pay refunds under this exemption is appropriated from the general fund to the commissioner of revenue.

Projects and Scope

  • Projects involved: Stafford Library Remodel project and the South Highway Shop project.
  • Location: Washington County.

Notable Changes to Law

  • Creates a targeted, temporary sales tax exemption for construction materials for two named projects in Washington County.
  • Establishes a refund mechanism rather than a permanent exemption, with processing aligned to existing refund procedures under Minnesota law (297A.75, subdivision 1).
  • Requires general-fund appropriation to cover the refunds, managed by the commissioner of revenue.

Practical Effect

  • Builders and suppliers for the Stafford Library Remodel and South Highway Shop in Washington County can avoid paying sales and use tax on eligible construction materials purchased within the specified period, with those taxes later refunded through the state’s refund process.

Relevant Terms - sales and use tax - exemption - construction materials - Stafford Library Remodel project - South Highway Shop project - Washington County - purchases after June 30, 2026 - before January 1, 2029 - refunds - commissioner of revenue - Minnesota Statutes chapter 297A - 297A.62 - 297A.75 - general fund appropriation - eligible purchases

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 05, 2026HouseActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Imposes a new exemption for eligible construction materials purchased after June 30, 2026 and before January 1, 2029."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill provides a temporary sales and use tax exemption for construction materials used in the Stafford Library Remodel and South Highway Shop projects in Washington County, referencing Minnesota Statutes chapter 297A for sales tax provisions and refunds.",
      "modified": [
        ""
      ]
    },
    "citation": "297A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "The tax is applied as if the rate under 297A.62(1) and (1a) applies, and then refunded under 297A.75, subd. 1, clause 17."
      ],
      "removed": [
        ""
      ],
      "summary": "The exemption applies as if the tax rate under Minn. Stat. § 297A.62, subdivisions 1 and 1a, were applied and then refunded under Minn. Stat. § 297A.75, subdivision 1, clause 17.",
      "modified": [
        ""
      ]
    },
    "citation": "297A.62",
    "subdivision": "subdivisions 1 and 1a"
  },
  {
    "analysis": {
      "added": [
        "Refunds for eligible purchases must not be issued until after June 30, 2026."
      ],
      "removed": [
        ""
      ],
      "summary": "Refunds for eligible purchases are handled under Minn. Stat. § 297A.75, subdivision 1, clause 17, consistent with the exemption mechanism described.",
      "modified": [
        ""
      ]
    },
    "citation": "297A.75",
    "subdivision": "subdivision 1, clause 17"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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