SF 1027

Introduction - 94th Legislature (2025 - 2026)

Posted on 02/11/2025 09:11 a.m.

A bill for an act
relating to taxation; property; modifying property tax exemption for certain airport
property; amending Minnesota Statutes 2024, section 272.01, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 272.01, subdivision 2, is amended to read:

Subd. 2.

Exempt property used by private entity for profit.

(a) When any real or
personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is leased,
loaned, or otherwise made available and used by a private individual, association, or
corporation in connection with a business conducted for profit, there shall be imposed a
tax, for the privilege of so using or possessing such real or personal property, in the same
amount and to the same extent as though the lessee or user was the owner of such property.

(b) The tax imposed by this subdivision shall not apply to:

(1) property leased or used as a concession in or relative to the use in whole or part of
a public park, market, fairgrounds, port authority, economic development authority
established under chapter 469, municipal auditorium, municipal parking facility, municipal
museum, or municipal stadium;

(2) property of an airport owned by a city, town, county, or group thereof which is:

(i) leased to or used by any person or entity including a fixed base operator; and

(ii) used as a hangar for the storage deleted text begin or deleted text end new text begin , new text end repair new text begin , or manufacture new text end of aircraft or to provide
aviation goods, services, or facilities to the airport or general public;

deleted text begin the exception from taxation provided in this clause does not apply to:
deleted text end

deleted text begin (i) property located at an airport owned or operated by the Metropolitan Airports
Commission or by a city of over 50,000 population according to the most recent federal
census or such a city's airport authority; or
deleted text end

deleted text begin (ii) hangars leased by a private individual, association, or corporation in connection with
a business conducted for profit other than an aviation-related business;
deleted text end

(3) property constituting or used as a public pedestrian ramp or concourse in connection
with a public airport;

(4) new text begin except as provided in paragraph (f), new text end property constituting or used as a passenger
check-in area or ticket sale counter, boarding area, or luggage claim area in connection with
a public airport but not the airports owned or operated by the Metropolitan Airports
Commission or cities of over 50,000 population or an airport authority therein. Real estate
owned by a municipality in connection with the operation of a public airport and leased or
used for agricultural purposes is not exempt;

(5) property leased, loaned, or otherwise made available to a private individual,
corporation, or association under a cooperative farming agreement made pursuant to section
97A.135; or

(6) property leased, loaned, or otherwise made available to a private individual,
corporation, or association under section 272.68, subdivision 4.

new text begin (c) Except as provided in paragraph (f), the exception from taxation provided in paragraph
(b), clause (2), does not apply to:
new text end

new text begin (1) property located at an airport owned or operated by the Metropolitan Airports
Commission or by a city of over 50,000 population according to the most recent federal
census or such a city's airport authority; or
new text end

new text begin (2) hangars leased by a private individual, association, or corporation in connection with
a business conducted for profit other than an aviation-related business.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end Taxes imposed by this subdivision are payable as in the case of personal property
taxes and shall be assessed to the lessees or users of real or personal property in the same
manner as taxes assessed to owners of real or personal property, except that such taxes shall
not become a lien against the property. When due, the taxes shall constitute a debt due from
the lessee or user to the state, township, city, county, and school district for which the taxes
were assessed and shall be collected in the same manner as personal property taxes. If
property subject to the tax imposed by this subdivision is leased or used jointly by two or
more persons, each lessee or user shall be jointly and severally liable for payment of the
tax.

deleted text begin (d) deleted text end new text begin (e) new text end The tax on real property of the federal government, the state or any of its political
subdivisions that is leased, loaned, or otherwise made available to a private individual,
association, or corporation and becomes taxable under this subdivision or other provision
of law must be assessed and collected as a personal property assessment. The taxes do not
become a lien against the real property.

new text begin (f) Property of an airport that is:
new text end

new text begin (1) located at an airport owned or operated by a city of over 50,000 but under 150,000
in population according to the most recent federal census or such a city's airport authority;
new text end

new text begin (2) not owned or operated by the Metropolitan Airports Commission; and
new text end

new text begin (3) used as a hangar for the storage, repair, or manufacture of aircraft or to provide
aviation goods, services, or facilities to the airport or general public, or used as a passenger
check-in area or ticket sale counter, boarding area, or luggage claim area, shall have the tax
imposed by this subdivision calculated as follows: for property taxes payable in 2026 through
2037, the net tax capacity of such property shall be reduced by 50 percent.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with property taxes payable
in 2026.
new text end