Minneslate Logo

SF1184 (Legislative Session 94 (2025-2026))

Minneapolis-St. Paul International Airport renovation refundable tax exemption provision for construction materials

Related bill: HF1123

AI Generated Summary

Purpose

Provide a refundable sales tax exemption for construction materials, supplies, and equipment used in the MSP (Minneapolis–Saint Paul International) Airport renovation. The exemption is available to materials purchased by a contractor or subcontractor for building public infrastructure at the MSP airport, with a defined eligibility window and a future refund process.

Main Provisions

  • Exemption for construction-related purchases: Materials, supplies, and equipment that are used in and incorporated into the construction, reconstruction, repair, maintenance, or improvement of MSP Airport public infrastructure are exempt from Minnesota sales and use tax if bought after June 30, 2023 and before January 1, 2028.
  • Refund mechanism: The exempt amount is refunded. Taxes are collected as if the normal rate applied, then refunded using the same processes described for eligible projects under existing tax rules.
  • Eligibility to receive refunds: Purchase must be by a contractor or subcontractor working on MSP Airport public infrastructure projects.
  • Timing of refunds: No refunds may be paid before July 1, 2025.
  • Use of existing tax provisions: The refund follows the procedures and rates outlined in Minnesota Statutes sections 297A.62 (subdivisions 1 and 1a) and 297A.75 (subdivision 1, clause 17).

Scope and Limitations

  • Applies specifically to construction-related materials, supplies, and equipment used for MSP Airport public infrastructure projects.
  • Eligible purchases must occur within the defined period (after June 30, 2023 and before January 1, 2028).
  • Only refunds, not immediate exemptions, are provided; the exemption is effectively reversed through the refund process.

Timing and Sunset

  • Effective purchase window: July 1, 2023 through December 31, 2027.
  • First eligible refunds: May occur no earlier than July 1, 2025.
  • End of exemption window: January 1, 2028 (no new exemption after this date for purchases).

Funding and Administration

  • Funding source: Refunds are paid from the general fund.
  • Administration: The commissioner of revenue administers the refunds under the existing framework for tax refunds, aligning with the referenced statutory sections.

Significance and Change to Law

  • Creates a temporary, refundable sales tax exemption specifically for MSP Airport construction materials, shifting the tax into a refund process rather than an immediate exemption.
  • Aligns MSP project refunds with existing Minnesota tax refund procedures, integrating with current statutes (297A.62 and 297A.75).
  • Requires general fund appropriation to cover the projected refunds.

Relevant Terms - Minneapolis–St. Paul International Airport (MSP) - Sales tax exemption - Refundable exemption - Construction materials - Materials and supplies - Equipment - Public infrastructure - Construction, reconstruction, repair, maintenance, improvement - Contractor or subcontractor - Minnesota Statutes chapter 297A - 297A.62 (subdivisions 1 and 1a) - 297A.75 (subdivision 1, clause 17) - General fund appropriation - Commissioner of Revenue - Tax refund process - July 1, 2025 (earliest refund date) - January 1, 2028 (end of eligibility window) - Purchase window: after June 30, 2023 and before January 1, 2028

Bill text versions

Past committee meetings

  • Taxes on: February 20, 2025 09:00

Actions

DateChamberWhereTypeNameCommittee Name
February 10, 2025SenateActionIntroduction and first reading
February 10, 2025SenateActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Subdivision 1 establishing the exemption refund for materials purchased after June 30, 2023 and before January 1, 2028.",
        "Subdivision 2 appropriation of funds from the general fund to pay the refunds.",
        "Requirement that the tax be imposed and collected as if the rate under Minn. Stat. § 297A.62, subds. 1 and 1a applied, and then refunded as provided for projects under Minn. Stat. § 297A.75, subd. 1, clause 17."
      ],
      "removed": [],
      "summary": "This bill creates a temporary refundable sales tax exemption for construction materials used in and equipment incorporated into the construction, reconstruction, repair, maintenance, or improvement of public infrastructure at the Minneapolis-St. Paul International Airport, referencing Minnesota Statutes chapter 297A for tax imposition and refund mechanics.",
      "modified": []
    },
    "citation": "297A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Utilizes the current rate framework to apply the tax before refunding under the new exemption."
      ],
      "removed": [],
      "summary": "The bill references the existing tax rate structure under Minn. Stat. § 297A.62, subds. 1 and 1a, to define how the sales tax would be calculated prior to applying the exemption/refund mechanism for MSP Airport construction materials.",
      "modified": []
    },
    "citation": "297A.62",
    "subdivision": "subd. 1 and subd. 1a"
  },
  {
    "analysis": {
      "added": [
        "Reference to the refund mechanism under 297A.75 subd. 1, clause 17 to provide refunds for the exempt materials."
      ],
      "removed": [],
      "summary": "The bill uses Minn. Stat. § 297A.75, subd. 1, clause 17 as the existing authority governing refunds for projects, to provide refunds for the MSP Airport construction materials exemption.",
      "modified": []
    },
    "citation": "297A.75",
    "subdivision": "subd. 1, clause 17"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

Loading…