SF 297

Introduction - 94th Legislature (2025 - 2026)

Posted on 01/28/2025 11:35 a.m.

A bill for an act
relating to taxation; sales and use; modifying the exemption for land clearing
equipment; amending Minnesota Statutes 2024, section 297A.68, subdivisions 3,
40.

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

Section 1.

Minnesota Statutes 2024, section 297A.68, subdivision 3, is amended to read:

Subd. 3.

Materials used in providing certain taxable services.

(a) Materials stored,
used, or consumed in providing a taxable service listed in section 297A.61, subdivision 3,
paragraph (g), clause (6), intended to be sold ultimately at retail are exempt.

(b) This exemption includes, but is not limited to:

(1) chemicals, lubricants, packaging materials, seeds, trees, fertilizers, and herbicides,
if these items are used or consumed in providing the taxable service;

(2) chemicals used to treat waste generated as a result of providing the taxable service;

(3) accessory tools, equipment, and other items that are separate detachable units used
in providing the service and that have an ordinary useful life of less than 12 months; and

(4) fuel, electricity, gas, and steam used or consumed in the production process, except
that electricity, gas, or steam used for space heating, cooling, or lighting is exempt if (i) it
is in excess of average climate control or lighting, and (ii) it is necessary to produce that
particular service.

(c) This exemption does not include machinery, equipment, implements, tools,
accessories, appliances, contrivances, furniture, and fixtures used in providing the taxable
service.

new text begin (d) This exemption does not apply to any accessory tools, equipment, and other items
that are separate detachable units that have an ordinary useful life of less than 12 months
that are used in providing landscaping, gardening, or lawn care services.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2025.
new text end

Sec. 2.

Minnesota Statutes 2024, section 297A.68, subdivision 40, is amended to read:

Subd. 40.

Land clearing.

Tree, bush, shrub, and stump removal are exempt when sold
to contractors or subcontractors as part of a land clearing contract. For purposes of this
subdivision, "land clearing contract" means a contract for the removal of trees, bushes, and
shrubs, including the removal of roots and stumps, to develop new text begin :
new text end

new text begin (1) new text end a site deleted text begin . This exemption does not apply to land clearing of deleted text end new text begin ; or
new text end

new text begin (2) new text end a portion of a site to allow for remodeling, improvement, or expansion of an existing
structure.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2025.
new text end