Purpose of the Bill

The bill aims to provide a financial benefit, specifically a refundable tax exemption on sales and use tax, for certain construction projects related to research and development campuses in Minnesota. This is intended to encourage development and investment in these high-cost projects within the state.

Main Provisions

• Tax Exemption for R&D Campuses: The bill allows for a sales and use tax exemption on construction materials, supplies, and equipment for eligible projects.
• Eligibility Criteria: To qualify, the research and development campus must have at least 250,000 square feet of laboratory space. Additionally, the total construction costs for the project should be at least $200 million, and the work must be completed within 32 months.
• Refund Process: Despite the exemption, the sales tax must initially be paid at the standard rate. However, these taxes are refundable, effectively negating the tax burden for eligible projects.

Significant Changes to Existing Law

• This bill adds a new subdivision to existing Minnesota tax statutes, specifically tailored to projects meeting the criteria detailed above. It introduces a refund mechanism for sales taxes paid on construction materials, which is a new financial incentive for large-scale research and development facilities.
• The provision has a sunset clause, expiring on March 1, 2028, after which the initiative would need renewal or amendment to continue.

Relevant Terms

• Tax exemption
• Research and development campus
• Construction materials
• Laboratory space
• Refundable tax
• Sales and use tax