1.1 A bill for an act
1.2 relating to taxation; sales and use; modifying exemption provisions for construction
1.3 materials by certain contractors; adding a refund provision; amending Minnesota
1.4 Statutes 2024, sections 297A.71, by adding a subdivision; 297A.75, subdivisions
1.5 1, 2, 3.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 297A.71, is amended by adding a subdivision
1.8to read:
1.9 Subd. 55.Construction materials purchased by contractors; exemption for certain
1.10entities.(a) Building, construction, or reconstruction materials, supplies, and equipment
1.11purchased by a contractor, subcontractor, or builder and used or consumed in or incorporated
1.12into buildings or facilities used principally by the following entities are exempt:
1.13 (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c);
1.14 (2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d);
1.15 (3) hospitals and nursing homes owned and operated by political subdivisions of the
1.16state, as listed in section 297A.70, subdivision 2, paragraph (a), clause (3);
1.17 (4) county law libraries under chapter 134A and public libraries, regional public library
1.18systems, and multicounty, multitype library systems as defined in section 134.001;
1.19 (5) nonprofit groups, as defined under section 297A.70, subdivision 4;
1.20 (6) hospitals, outpatient surgical centers, and critical access dental providers, as defined
1.21under section 297A.70, subdivision 7; and
1Section 1.
REVISOR EAP/ES 25-0329502/06/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 618
NINETY-FOURTH SESSION
Authored by Swedzinski02/13/2025
The bill was read for the first time and referred to the Committee on Taxes 2.1 (7) nursing homes and boarding care homes, as defined under section 297A.70,
2.2subdivision 18.
2.3 (b) Materials, supplies, and equipment used in the construction, reconstruction, repair,
2.4maintenance, or improvement of public infrastructure of any kind including but not limited
2.5to roads, bridges, culverts, drinking water facilities, and wastewater facilities purchased by
2.6a contractor or subcontractor of the following entities are exempt:
2.7 (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c); or
2.8 (2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d).
2.9 (c) The tax on purchases exempt under this subdivision must be imposed and collected
2.10as if the rate under section 297A.62, subdivision 1, applied, and then refunded in the manner
2.11provided in section 297A.75.
2.12 EFFECTIVE DATE.This section is effective for sales and purchases made after June
2.1330, 2025.
2.14 Sec. 2. Minnesota Statutes 2024, section 297A.75, subdivision 1, is amended to read:
2.15 Subdivision 1.Tax collected.The tax on the gross receipts from the sale of the following
2.16exempt items must be imposed and collected as if the sale were taxable and the rate under
2.17section 297A.62, subdivision 1, applied. The exempt items include:
2.18 (1) building materials for an agricultural processing facility exempt under section
2.19297A.71, subdivision 13;
2.20 (2) building materials for mineral production facilities exempt under section 297A.71,
2.21subdivision 14;
2.22 (3) building materials for correctional facilities under section 297A.71, subdivision 3;
2.23 (4) building materials used in a residence for veterans with a disability exempt under
2.24section 297A.71, subdivision 11;
2.25 (5) elevators and building materials exempt under section 297A.71, subdivision 12;
2.26 (6) materials and supplies for qualified low-income housing under section 297A.71,
2.27subdivision 23;
2.28 (7) materials, supplies, and equipment for municipal electric utility facilities under
2.29section 297A.71, subdivision 35;
2Sec. 2.
REVISOR EAP/ES 25-0329502/06/25 3.1 (8) equipment and materials used for the generation, transmission, and distribution of
3.2electrical energy and an aerial camera package exempt under section 297A.68, subdivision
3.337;
3.4 (9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph
3.5(a), clause (10);
3.6 (10) materials, supplies, and equipment for construction or improvement of projects and
3.7facilities under section 297A.71, subdivision 40;
3.8 (11) enterprise information technology equipment and computer software for use in a
3.9qualified data center exempt under section 297A.68, subdivision 42;
3.10 (12) materials, supplies, and equipment for qualifying capital projects under section
3.11297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);
3.12 (13) items purchased for use in providing critical access dental services exempt under
3.13section 297A.70, subdivision 7, paragraph (c);
3.14 (14) items and services purchased under a business subsidy agreement for use or
3.15consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
3.1644;
3.17 (15) building materials, equipment, and supplies for constructing or replacing real
3.18property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51;
3.19 (16) building materials, equipment, and supplies for qualifying capital projects under
3.20section 297A.71, subdivision 52; and
3.21 (17) building materials, equipment, and supplies for constructing, remodeling, expanding,
3.22or improving a fire station, police station, or related facilities exempt under section 297A.71,
3.23subdivision 53.; and
3.24 (18) building construction or reconstruction materials, supplies, and equipment purchased
3.25by an entity eligible under section 297A.71, subdivision 55.
3.26 EFFECTIVE DATE.This section is effective for sales and purchases made after June
3.2730, 2025.
3.28 Sec. 3. Minnesota Statutes 2024, section 297A.75, subdivision 2, is amended to read:
3.29 Subd. 2.Refund; eligible persons.Upon application on forms prescribed by the
3.30commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must
3.31be paid to the applicant. Only the following persons may apply for the refund:
3Sec. 3.
REVISOR EAP/ES 25-0329502/06/25 4.1 (1) for subdivision 1, clauses (1), (2), and (13), the applicant must be the purchaser;
4.2 (2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;
4.3 (3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
4.4provided in United States Code, title 38, chapter 21;
4.5 (4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
4.6property;
4.7 (5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;
4.8 (6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a
4.9joint venture of municipal electric utilities;
4.10 (7) for subdivision 1, clauses (8), (11), and (14), the owner of the qualifying business;
4.11 (8) for subdivision 1, clauses (9), (10), (12), (16), and (17), the applicant must be the
4.12governmental entity that owns or contracts for the project or facility; and
4.13 (9) for subdivision 1, clause (15), the applicant must be the owner or developer of the
4.14building or project.; and
4.15 (10) for subdivision 1, clause (18), the applicant must be the entity eligible under section
4.16297A.71, subdivision 55.
4.17 EFFECTIVE DATE.This section is effective for sales and purchases made after June
4.1830, 2025.
4.19 Sec. 4. Minnesota Statutes 2024, section 297A.75, subdivision 3, is amended to read:
4.20 Subd. 3.Application.(a) The application must include sufficient information to permit
4.21the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor,
4.22or builder, under subdivision 1, clauses (3) to (12) or (14) to (17) (18), the contractor,
4.23subcontractor, or builder must furnish to the refund applicant a statement including the cost
4.24of the exempt items and the taxes paid on the items unless otherwise specifically provided
4.25by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under
4.26this section.
4.27 (b) An applicant may not file more than two applications per calendar year for refunds
4.28for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
4.29 EFFECTIVE DATE.This section is effective for sales and purchases made after June
4.3030, 2025.
4Sec. 4.
REVISOR EAP/ES 25-0329502/06/25