HF5026
Sales and use tax exemption for nonprofit carshare organizations created.
Legislative Session 94 (2025-2026)
Related bill: SF5201
AI Generated Summary
Purpose
- The bill creates a sales tax exemption for purchases by nonprofit carshare organizations when the items are used to provide carshare services.
- A nonprofit carshare organization is defined as a nonprofit whose primary purpose is to provide carshare services and that is exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code.
- The exemption applies to items purchased by the nonprofit carshare organization for use in delivering carshare services, with an exception noted under paragraph b (not shown in the provided text).
- The exemption does not apply to certain items, specifically: prepared food, candy, soft drinks, alcoholic beverages, and taxable cannabis products.
Main Provisions
- Creates a new subdivision (Subdivision 22) under Minnesota Statutes 2024 section 297A.70.
- Establishes a sales tax exemption for purchases by nonprofit carshare organizations when the items are used to provide carshare services.
- Defines the qualifying entity as a nonprofit carshare organization meeting the 501(c)(3) requirement.
- Includes stated exclusions to the exemption for certain categories of products (prepared foods, candy, soft drinks, alcoholic beverages, taxable cannabis products).
Definitions
- Nonprofit carshare organization: a nonprofit whose primary purpose is to provide carshare services and that is exempt from federal taxation under 501(c)(3) of the Internal Revenue Code.
- Carshare services: the activities carried out by the nonprofit to provide vehicle-sharing options to the public.
Exclusions and Limitations
- The exemption does not apply to sales of prepared food, candy, soft drinks, alcoholic beverages, or taxable cannabis products (as defined in related statutes).
- The text references an exception under paragraph b, which is not fully shown in the excerpt; the exemption may have additional limitations described there.
Significance and Potential Impact
- Purpose: Align Minnesota tax policy with nonprofit carsharing activities by removing sales tax on purchases used to operate carsharing programs.
- Practical effect: Lower operating costs for eligible nonprofit carshare organizations, potentially supporting expanded access to carsharing.
- Scope: Limited to purchases used to provide carshare services by qualifying nonprofit organizations; does not apply to the listed restricted product categories.
Relevant Terms - sales tax exemption - nonprofit carshare organization - carshare services - Minnesota Statutes 2024 section 297A.70 - subdivision 22 - 501(c)(3) of the Internal Revenue Code - prepared food - candy - soft drinks - alcoholic beverages - taxable cannabis products - 297A.67 subdivision 2 - 295.81 subdivision 1 paragraph r - exception under paragraph b (referenced).
Relevant Terms - nonprofit carshare organization - sales tax exemption - carshare services - 501(c)(3) - prepared food - candy - soft drinks - alcoholic beverages - taxable cannabis products - Minnesota statute references (297A.70, 297A.67, 295.81)
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| April 20, 2026 | House | Action | Introduction and first reading, referred to | Taxes |
Citations
[
{
"analysis": {
"added": [
"Adds Subd. 22 to 297A.70 establishing a sales tax exemption for purchases by nonprofit carshare organizations used in providing carshare services.",
"Defines 'nonprofit carshare organization' as a nonprofit organization primarily providing carshare services and exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code."
],
"removed": [],
"summary": "This bill adds Subdivision 22 to Minnesota Statutes, section 297A.70, creating a sales tax exemption for purchases by nonprofit carshare organizations when the items are used to provide carshare services. It defines 'nonprofit carshare organization' as a nonprofit organization primarily providing carshare services and exempt from federal taxation under the Internal Revenue Code (501(c)(3)). The exemption includes a notable exception: the exemption does not apply to certain items listed in paragraph b (e.g., prepared foods, candy, soft drinks, alcoholic beverages, and taxable cannabis products) defined elsewhere in the statutes.",
"modified": [
"Incorporates an exception framework (paragraph b) that limits the exemption for specific items (e.g., prepared foods, cannabis products) as defined in other sections."
]
},
"citation": "297A.70",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "This reference notes the definition of items—such as prepared foods, candy, soft drinks, and alcoholic beverages—used to determine which purchases are exempt. It is cited to identify items that are not eligible for the exemption when purchased by a nonprofit carshare organization.",
"modified": []
},
"citation": "297A.67",
"subdivision": "Subd. 2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Defines 'taxable cannabis products' as part of the exemption's exceptions referenced in paragraph b, which delineates items not eligible for the exemption.",
"modified": []
},
"citation": "295.81",
"subdivision": "Subd. 1, paragraph r"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites the federal tax-exemption standard (501(c)(3)) used to qualify the nonprofit carshare organization for the state exemption.",
"modified": []
},
"citation": "26 U.S.C. § 501(c)(3)",
"subdivision": ""
}
]Progress through the legislative process
In Committee