HF1248

HF1248 (Legislative Session 94 (2025-2026))

Sales and use tax exemption provisions modified for construction materials purchased by certain contractors.

Related bill: SF1724

AI Generated Summary

This bill proposes amendments to Minnesota's taxation laws, specifically regarding the sales and use tax exemption for construction materials purchased by contractors. Key provisions include:

Expanded Exemption: Contractors, subcontractors, and builders purchasing construction materials, supplies, and equipment for buildings or facilities primarily used by certain entities will be exempt from sales and use tax. These entities include:
- School districts
- Local governments
- Public hospitals and nursing homes
- County law libraries and public library systems
- Nonprofit groups
- Hospitals, outpatient surgical centers, and critical access dental providers
- Nursing homes and boarding care homes
Public Infrastructure Projects: Materials, supplies, and equipment used in the construction, repair, or maintenance of public infrastructure (such as roads, bridges, and water facilities) for school districts and local governments will also be exempt.
Refund Mechanism: While the tax will be initially imposed and collected at the standard rate, contractors will be eligible for a refund under an amended provision of Minnesota Statutes § 297A.75.

This bill seeks to reduce the financial burden on contractors working on public projects by allowing them to recover sales tax costs through an exemption and refund process.

Bill text versions

Introduction PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
February 19, 2025	House	Floor	Action	Introduction and first reading, referred to	Taxes
February 19, 2025	House	Floor	Action	Introduction and first reading, referred to	Taxes

Citations

[
  {
    "analysis": {
      "added": [
        "A new refund provision for contractors purchasing construction materials."
      ],
      "removed": [
        ""
      ],
      "summary": "The bill modifies refund provisions under section 297A.75.",
      "modified": [
        "Clarifies the process and conditions for obtaining refunds."
      ]
    },
    "citation": "297A.75",
    "subdivision": "subdivisions 1 and 2"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Revises definitions of entities qualifying for exemptions under section 297A.70 subdivision 2.",
      "modified": [
        "Clarifies definitions related to school districts and local governments."
      ]
    },
    "citation": "297A.70",
    "subdivision": "subdivision 2"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "The bill impacts nonprofit groups under section 297A.70 subdivision 4.",
      "modified": [
        "Adjustments made to nonprofit group exemption qualifications."
      ]
    },
    "citation": "297A.70",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Addresses exemptions for critical access providers under section 297A.70 subdivision 7.",
      "modified": [
        "Includes specific provisions for outpatient surgical centers and dental providers."
      ]
    },
    "citation": "297A.70",
    "subdivision": "subdivision 7"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Adds details regarding exemptions for nursing homes under section 297A.70 subdivision 18.",
      "modified": [
        "Defines boarding care homes in the context of exemption eligibility."
      ]
    },
    "citation": "297A.70",
    "subdivision": "subdivision 18"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "Expands definition and applicability for libraries under section 134.001.",
      "modified": [
        "Adjusts definitions for regional public library systems and multicounty multitype library systems."
      ]
    },
    "citation": "134.001",
    "subdivision": ""
  }
]