Purpose

Provide a temporary, refundable sales and use tax exemption to support construction activity in Ely. Specifically, it targets the Ely Housing Redevelopment Authority’s workforce housing project Wilderness Escape in the City of Ely, aiming to encourage development and housing progress.

What the bill would do

• Create a refundable exemption from sales and use tax for certain construction materials, supplies, and equipment used in the Ely Housing Redevelopment Authority’s Workforce Housing Project Wilderness Escape.
• The exemption applies to materials purchased after April 30, 2026 and before January 1, 2028.
• The tax is treated as if the normal rate under Minnesota law would apply for calculation purposes, but a refund is available for the tax paid on those exempt items.
• Refunds are issued to the applicant, who must be the owner of the described development project.

Eligible items and project

• Materials, supplies, and equipment used or consumed in construction, reconstruction, upgrade, expansion, renovation, or remodeling of the Ely Housing Redevelopment Authority workforce housing project Wilderness Escape in the City of Ely.

How refunds work

• The refund equals the tax paid on the gross receipts of exempt items.
• If a contractor, subcontractor, or builder supplied the items, they must provide the applicant with a statement detailing the cost of exempt items and taxes paid.
• Refunds follow the procedures in Minnesota Statutes sections 289A.40 and 289A.50.
• Refunds for eligible purchases must not be issued until after June 30, 2026.

Application and documentation

• The applicant must provide sufficient information to allow the commissioner of revenue to verify the tax paid.
• The applicant must be the owner of the development project; contractors’ statements may be used to support the refund.

Timing and limitations

• Purchases must occur within the window from April 30, 2026 to January 1, 2028.
• The exemption is time-limited to that period, and refunds are not issued until after June 30, 2026.

Funding and appropriation

• The money needed to pay these refunds is appropriated to the commissioner of revenue.

Significance and impact

• This bill creates a targeted, time-limited tax incentive to promote construction and housing development in Ely by removing the burden of sales and use tax on eligible building materials for the specified project, with a structured process for refunds and verification.

Relevant Terms - Ely, Wilderness Escape, Ely Housing Redevelopment Authority, workforce housing project - City of Ely - sales and use tax exemption - refundable exemption - Minnesota Statutes chapter 297A - 297A.62, subdivision 1 - April 30, 2026 - January 1, 2028 - refunds - commissioner of revenue - appropriation - 289A.40 - 289A.50 - owner of the development project - contractor/subcontractor/builder statement - verified tax paid - refunds not issued until after June 30, 2026