Purpose

To provide a temporary, refundable sales and use tax exemption for construction materials and equipment used in building a county government center in Foley, Benton County. The exemption applies to purchases made after March 31, 2025 and before January 1, 2030, and is designed to reduce the tax burden on the project. Refunds of the exempted tax are handled through existing refund processes and paid from the state’s general fund.

Main Provisions

• Exemption scope

  • Materials, supplies, and equipment used in and incorporated into the construction of a Benton County government center in Foley are exempt from sales and use tax under Minnesota law, provided they are purchased within the eligible time window (after March 31, 2025 and before January 1, 2030).

• Tax handling and refund

  • The tax on eligible purchases is calculated as if the standard rate under Minnesota Statutes section 297A.62 subdivisions 1 and 1a applied.
  • The tax collected is then refunded using the same process used for other approved projects under Minnesota Statutes section 297A.75 subdivision 1 clause 17.

• Timing of refunds

  • Refunds for eligible purchases must not be issued before June 30, 2025.

• Funding for refunds

  • The money needed to pay the refunds is appropriated from the general fund to the commissioner of revenue.

Significant Changes to Existing Law

• Creates a targeted, temporary refundable sales and use tax exemption for a specific public construction project (Benton County government center in Foley).
• Requires a state appropriation to fund the anticipated refunds, tying the exemption to general fund resources and the commissioner of revenue’s administration.

Practical Impact

• For the Benton County government center project in Foley, eligible construction materials and equipment purchased in the specified window could be exempt from sales tax, reducing project costs.
• The exemption operates as a tax collection-and-refund mechanism rather than an outright exemption at the point of sale.
• Public funding is allocated to cover anticipated refunds, affecting state budgeting for that period.

How It Would Work in Practice

• Purchases of eligible materials within the time window are taxed initially.
• The tax is refunded after processing under the specified statutory framework.
• The refunds are paid from the general fund by the commissioner of revenue, using the legislature’s appropriation.

Relationship to Existing Programs

• Ties into existing Minnesota refund mechanisms for project-based exemptions (297A.75, clause 17) and standard tax rate rules (297A.62, subdivisions 1 and 1a).

Effective Window

• Applies only to purchases after March 31, 2025 and before January 1, 2030, for the specified Benton County project.

Roles

• Purchases handled by vendors supplying materials, supplies, and equipment.
• Refunds administered by the commissioner of revenue, funded by a general fund appropriation.

Fiscal Note (Source of Funds)

• General fund appropriations are used to reimburse refunds to purchasers.

Relevant Terms - sales and use tax - refundable exemption - construction materials - county government center - Foley, Benton County - appropriation - general fund - commissioner of revenue - Minnesota Statutes 297A.62 - Minnesota Statutes 297A.75 - refunds - time window (March 31, 2025 to January 1, 2030)