Minneslate Logo

SF167 (Legislative Session 94 (2025-2026))

Watertown sales tax exemption for construction materials authorization

Related bill: HF456

AI Generated Summary

Purpose

  • Create a temporary, refundable sales and use tax exemption for construction materials and equipment used in two specific projects in the City of Watertown: a new water tower and a wastewater treatment facility.

What the bill covers (Main provisions)

  • Exemption/refund for eligible materials
    • Materials and supplies used or consumed in and equipment incorporated into:
    • Construction of a new water tower, and
    • Construction of a wastewater treatment facility
    • These materials must be purchased within specified dates:
    • Water tower: after April 30, 2024 and before February 1, 2026
    • Wastewater treatment facility: after February 28, 2022 and before July 1, 2025
    • The exemption is handled as a refund: the tax is collected as if the normal rate applied, then refunded in the same manner used for other Watertown projects under the state refund process.
    • Refunds for eligible purchases cannot be issued until after June 30, 2025.
  • Funding for refunds
    • The money needed to make these refunds is appropriated from the general fund to the commissioner of revenue.

How the refund works (Tax administration)

  • Tax is imposed and collected at the usual rate, but the amount is refunded to the purchaser.
  • Refunds follow the same process used for other projects under Minnesota Statutes section 297A75, subdivision 1.
  • Administration and timing follow state rules for refunds, with a specific refund eligibility date of after June 30, 2025.

Timing and eligibility details

  • Target projects and time windows:
    • Water tower project materials must be bought within the April 30, 2024 to February 1, 2026 window.
    • Wastewater treatment facility materials must be bought within the February 28, 2022 to July 1, 2025 window.
  • The exemption is not automatic at purchase; refunds are needed to realize the exemption.

Significance and potential impact

  • Creates a temporary, targeted reduction in upfront project costs for Watertown by deferring state sales tax through a refund.
  • Shifts the financial flow from immediate tax collection to a later refund funded by state dollars (general fund).
  • Applies only to specific construction projects in Watertown and within the defined purchase windows.

Relevant Terms

  • Watertown, City of Watertown
  • sales tax exemption, refundable exemption
  • construction materials, materials and supplies, equipment
  • construction, reconstruction, upgrade, expansion, renovation, remodeling
  • water tower, wastewater treatment facility
  • refunds, refund process
  • Minnesota State Statutes: 297A (chapter), 297A62, 297A75
  • commissioner of revenue
  • general fund, appropriation
  • purchase windows: after April 30, 2024; before February 1, 2026; after February 28, 2022; before July 1, 2025
  • timing: refunds issued after June 30, 2025

Relevant Terms section - Watertown - sales tax exemption - refundable exemption - construction materials - equipment incorporated into construction - water tower - wastewater treatment facility - refunds - general fund - commissioner of revenue - Minnesota Statutes 297A, especially sections 297A62 and 297A75 - purchase timing windows (dates provided in the bill)

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 16, 2025SenateActionIntroduction and first reading
January 16, 2025SenateActionReferred toTaxes
February 03, 2025SenateActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references Minnesota Statutes chapter 297A governing sales and use tax and refunds, used to implement a refundable exemption for Watertown construction projects. No changes to the existing statute are enacted.",
      "modified": []
    },
    "citation": "297A",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references the rate under Minnesota Statutes section 297A.62, subdivisions 1 and 1a, to be applied for the exemption and then refunded under the existing framework.",
      "modified": []
    },
    "citation": "297A.62",
    "subdivision": "subdivisions 1 and 1a"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references Minnesota Statutes section 297A.75, subdivision 1, clause 17, for the refunds mechanism used for eligible purchases.",
      "modified": []
    },
    "citation": "297A.75",
    "subdivision": "subdivision 1 clause 17"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

Loading…