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SF1306 (Legislative Session 94 (2025-2026))

Benton County government center refundable exemption provision for certain construction materials

Related bill: HF471

AI Generated Summary

Purpose

To provide a temporary, refundable exemption from Minnesota sales and use tax for materials, supplies, and equipment used in constructing a county government center in the city of Foley (Benton County). The exemption is limited to purchases made within a specific time window and is funded by state appropriations.

What this bill would do (Main provisions)

  • Creates an exemption that is refundable: materials, supplies, and equipment used in the construction of the Benton County government center in Foley are exempt from sales and use tax, but the tax is collected at the time of purchase and then refunded.
  • Applies only to purchases made after March 31, 2025 and before January 1, 2030.
  • The refund process is to be handled in the same manner as refunds for other qualified projects under Minnesota law (as described in the referenced statutory provisions).
  • Refunds for eligible purchases cannot be issued until after June 30, 2025.
  • The amount needed to pay these refunds is appropriated from the general fund to the Minnesota Department of Revenue (the commissioner of revenue).

Scope and eligibility

  • Geographic/project scope: the county government center project located in the city of Foley, Benton County.
  • Eligible items: materials and supplies, along with equipment, that are used in and incorporated into the construction of the county government center.
  • Eligible period: purchases within the window from March 31, 2025 to December 31, 2029.

How the refund would work

  • Tax would be collected at the standard rate as if the normal sales tax applied.
  • The collected tax would then be refunded to the purchaser under the same processes used for other approved project refunds (per Minnesota Statutes guidance cited in the bill).
  • Refund timing: refunds would begin after June 30, 2025.

Funding and administration

  • The state would fund the refunds: the amount required to pay refunds is appropriated from the general fund to the commissioner of revenue.
  • The commissioner of revenue would administer the refunds following the applicable statutory process for project refunds.

Significant changes to existing law

  • Introduces a temporary, refundable sales and use tax exemption for a specific public works project (Benton County government center in Foley).
  • Establishes a new authorized expenditure (refunds) funded by the general fund, rather than a permanent exemption.
  • Aligns the project refund with existing refund mechanisms under Minnesota Statutes sections 297A.62 and 297A.75.

Implications and considerations

  • Fiscal impact: uses general fund money to pay future refunds, effectively subsidizing the construction costs for the county project.
  • Administrative: relies on existing project refund procedures, which may require coordination between the County, vendors, and the Department of Revenue.
  • Public policy: targeted relief for a public construction project within a defined time window and location.

Relevant Terms sales tax, use tax, exemption, refundable exemption, materials, supplies, equipment, construction, county government center, Foley, Benton County, Minnesota Statutes 297A.62, Minnesota Statutes 297A.75, refunds, project refunds, general fund, commissioner of revenue, eligibility window, March 31, 2025, January 1, 2030, June 30, 2025

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 13, 2025SenateActionIntroduction and first reading
February 13, 2025SenateActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "No new statutory text is added; the bill relies on existing 297A provisions."
      ],
      "removed": [],
      "summary": "This bill references the Minnesota Statutes in chapter 297A to provide a Benton County sales tax exemption for construction materials and a related refund mechanism, using existing framework to implement the exemption.",
      "modified": [
        "Applies existing rate provisions and refund procedures under 297A to provide refunds for eligible purchases after construction materials are used."
      ]
    },
    "citation": "297A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Reflects use of the 297A.62 rate as the basis for the exemption calculation."
      ],
      "removed": [],
      "summary": "The bill directs that the exemption be imposed and collected as if the rate under Minn. Stat. § 297A.62, subd. 1 applied.",
      "modified": []
    },
    "citation": "297A.62",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [
        "This clause provides the refund mechanism and timing for eligible purchases."
      ],
      "removed": [],
      "summary": "Refunds for eligible purchases are to be issued under the same manner provided for projects under Minn. Stat. § 297A.75, subd. 1, cl. 17, with refunds not issued until after June 30, 2025.",
      "modified": []
    },
    "citation": "297A.75",
    "subdivision": "subdivision 1 clause 17"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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