SF5095

Purpose

• Create a temporary, refundable sales and use tax exemption for construction materials used in a specific Cottage Grove infrastructure project. The goal is to reduce project costs by allowing a refund of sales tax paid on eligible materials and equipment.

Main Provisions

• Exemption and refund for the TH 6180th Street Rehabilitation Project (from Highway 61 to Ideal Avenue South) in Cottage Grove:
  • Materials and supplies used or consumed in, and equipment incorporated into, the rehabilitation project are exempt from sales and use tax if purchased after March 31, 2026 and before January 1, 2028.
  • The tax is collected as if the rate under Minnesota Statutes section 297A.62 subdivisions 1 and 1a applied, and then refunded in the same manner provided for projects under Minnesota Statutes section 297A.75 subdivision 1 clause 17.
• Funding mechanism:
  • The refunds for these purchases are paid from the general fund to the commissioner of revenue.

Timing and Scope

• Eligible purchases must occur within the specified window: after March 31, 2026 and before January 1, 2028.
• Applies specifically to the construction materials, supplies, and equipment used in the Cottage Grove project described above.

Administration and Process

• Refunds follow the state’s existing refund procedures for projects described in 297A.75 subdivision 1 clause 17.
• The commissioner of revenue administers the refunds, funded from the general fund.

Financial Impact and Funding

• The general fund provides the money to pay the refunds; there is an appropriation to the commissioner of revenue to process and issue refunds.

Significance and Context

• This is a targeted, temporary tax relief measure aimed at lowering the cost of a specific local infrastructure project in Cottage Grove by refunding the sales tax paid on eligible construction materials and equipment.

---

Relevant Terms - Cottage Grove - sales tax exemption - refundable exemption - construction materials - TH 6180th Street Rehabilitation Project - Highway 61 - Ideal Avenue South - Minnesota Statutes chapter 297A - 297A.62 subdivisions 1 and 1a - 297A.75 subdivision 1 clause 17 - refunds - general fund - commissioner of revenue - appropriation