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SF160 (Legislative Session 94 (2025-2026))

Martin County West Independent School District sales and use tax exemption for construction materials authorization

Related bill: HF822

AI Generated Summary

Purpose

Provide a temporary, refundable sales and use tax exemption for construction materials used in building a new prekindergarten through 12th grade school in Martin County West Independent School District No. 2448.

Main Provisions

  • Exemption granted: Materials and supplies used or consumed and equipment incorporated into the construction of a new K-12 school building in Martin County West ISD No. 2448 are exempt from Minnesota sales and use tax.
  • Time window: Exemption applies to materials purchased after September 30, 2025 and before January 1, 2027.
  • Refund mechanism: The tax would be collected as if the standard rate under Minnesota law (as described in 297A.62(1) and 297A.62(1a)) applied, but then refunded to the project in the same manner used for other exempt projects (under 297A.75, subdivision 1, clause 17).
  • Eligible items: The exemption covers materials and supplies used or consumed and equipment incorporated into the construction.
  • Targeted project: Applies specifically to the construction of a new ISD No. 2448 school building (Martin County West).

Administration and Funding

  • Funding source for refunds: The amount necessary to pay these refunds is appropriated from the general fund to the commissioner of revenue.
  • Payment and refund process: Refunds follow the same process used for other projects that receive tax refunds under the referenced statutes.

Significance and Impact

  • Purpose and effect: This bill creates a targeted, temporary tax incentive to support the construction of a new K-12 school in a specific district by offsetting construction material tax costs.
  • Legal alignment: The exemption references and uses the existing tax structure and refund mechanisms found in Minnesota Statutes chapters 297A.62 and 297A.75.

Relationship to Existing Law

  • Creates a new special exemption within the state sales and use tax framework, operating under the same refund framework used for similar projects.
  • Key statutory references involved: Minnesota Statutes chapter 297A, including sections 297A.62 and 297A.75 (subdivision 1, clause 17).

What this bill seeks to accomplish

  • Provide financial relief for a specific school construction project by offsetting sales tax costs on building materials and equipment.
  • Ensure funding for the refunds through a general fund appropriation to support school infrastructure in the district.

Relevant Terms - refundable exemption - sales and use tax - construction materials - materials and supplies - equipment incorporated into construction - prekindergarten through grade 12 (K-12) - Martin County West Independent School District No. 2448 - ISD No. 2448 - Minnesota Statutes 297A.62 - Minnesota Statutes 297A.75 - general fund - commissioner of revenue - appropriation - clause 17 (of 297A.75 subdivision 1) - September 30, 2025 - January 1, 2027

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 16, 2025SenateActionIntroduction and first reading
January 16, 2025SenateActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Applies the 297A.62 rate to materials for the ISD 2448 project and refunds the tax under the existing 297A.75 refund mechanism."
      ],
      "removed": [],
      "summary": "This bill directs that the sales and use tax on construction materials used for a new prekindergarten through grade 12 school building in Independent School District No. 2448 (Martin County West) be collected under the rate provisions of Minnesota Statutes section 297A.62 (subdivisions 1 and 1a) and then refunded using the process provided in Minnesota Statutes section 297A.75, subdivision 1, clause 17.",
      "modified": [
        "Links the project-specific exemption to the existing rate and refund framework (297A.62 and 297A.75, subd. 1, cl. 17)."
      ]
    },
    "citation": "297A.62",
    "subdivision": "subdivisions 1 and 1a"
  },
  {
    "analysis": {
      "added": [
        "Explicit funding source for the refunds (general fund appropriation)."
      ],
      "removed": [],
      "summary": "This clause describes the refund mechanism for the exemption and specifies funding for those refunds via an appropriation from the general fund to the commissioner of revenue.",
      "modified": [
        "Incorporates an appropriation mechanism (subd. 2) to pay refunds under subdivision 1, clause 17."
      ]
    },
    "citation": "297A.75",
    "subdivision": "subdivision 1 clause 17"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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