Purpose of the Bill

The aim of this bill is to update the tax exemption process for materials used in constructing agriculture processing facilities in Minnesota, specifically those with a substantial capital investment.

Main Provisions

• Exemption for Materials: The bill allows for sales and use tax exemptions on building materials and supplies used for constructing agriculture processing facilities.
• Capital Investment Requirement: To qualify for this exemption, the total capital investment in the facility must exceed $100 million.
• Definition of Facility: The agriculture processing facility is defined as infrastructure used primarily for processing or producing products from agricultural crops. This includes waste and residues but excludes livestock products (except for milk and poultry products) and wood products.
• Limited Land Definition: The exemption applies to land hosting these facilities, including surrounding land used for storage or other directly related activities, but not land used for growing crops.
• Tax Reimbursement Process: Taxes must initially be paid as usual, but they are eligible for refund according to specific procedures, indicating a system of paying first and then claiming back the taxes.

Significant Changes to Existing Law

• The bill modifies previous tax law by extending the tax exemption rules to cover more specific and high-investment projects in agriculture processing facilities.
• It narrows down the application of the tax exemption to projects with a much higher capital investment threshold, ensuring that only significant projects benefit.

Relevant Terms

agriculture processing facilities, tax exemption, sales and use tax, building materials, capital investment, tax refund, agricultural crops, livestock products, poultry products.