SF 3744

Introduction - 94th Legislature (2025 - 2026)

Posted on 02/24/2026 09:43 a.m.

A bill for an act
relating to taxes; sales and use; creating a refundable exemption for certain items
and services purchased to repair property damage caused by natural disasters;
amending Minnesota Statutes 2024, section 297A.67, by adding a subdivision;
Minnesota Statutes 2025 Supplement, section 297A.75, subdivisions 1, 2, 3.

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

Section 1.

Minnesota Statutes 2024, section 297A.67, is amended by adding a subdivision
to read:

new text begin Subd. 41. new text end

new text begin Repairs following a natural disaster. new text end

new text begin (a) The sale of the following items or
service is exempt when the item or service is purchased to repair or remediate damage to
property caused by a natural disaster:
new text end

new text begin (i) windows;
new text end

new text begin (ii) doors;
new text end

new text begin (iii) siding materials;
new text end

new text begin (iv) insulation;
new text end

new text begin (v) trusses, shingles, and other roofing materials;
new text end

new text begin (vi) power generators;
new text end

new text begin (vii) equipment used for sandbagging;
new text end

new text begin (viii) replacement parts for pumps, valves, and other small equipment;
new text end

new text begin (ix) plywood; and
new text end

new text begin (x) tree removal and other services related to hauling debris.
new text end

new text begin (b) The exemption under this subdivision applies only if:
new text end

new text begin (1) a natural disaster is declared by the federal government, or by a local official under
section 12.29; and
new text end

new text begin (2) the purchase is made within two years of the disaster declaration.
new text end

new text begin (c) The tax on purchases exempt under this subdivision must be imposed and collected
as if the rates under section 297A.62, subdivisions 1 and 1a, applied and then refunded in
the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after May 31, 2025.
new text end

Sec. 2.

Minnesota Statutes 2025 Supplement, section 297A.75, subdivision 1, is amended
to read:

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the following
exempt items must be imposed and collected as if the sale were taxable and the rate under
section 297A.62, subdivision 1, applied. The exempt items include:

(1) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section 297A.71,
subdivision 14;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for veterans with a disability exempt under
section 297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

(6) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;

(7) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(8) equipment and materials used for the generation, transmission, and distribution of
electrical energy and an aerial camera package exempt under section 297A.68, subdivision
37;

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph
(a), clause (10);

(10) materials, supplies, and equipment for construction or improvement of projects and
facilities under section 297A.71, subdivision 40;

(11) enterprise information technology equipment and computer software for use in a
qualified data center, qualified large-scale data center, or qualified refurbished data center
exempt under section 297A.68, subdivision 42;

(12) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44, paragraphs (a) and (b);

(13) items purchased for use in providing critical access dental services exempt under
section 297A.70, subdivision 7, paragraph (c);

(14) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
44;

(15) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51;

(16) building materials, equipment, and supplies for qualifying capital projects under
section 297A.71, subdivision 52;

(17) building materials, equipment, and supplies for constructing, remodeling, expanding,
or improving a fire station, police station, or related facilities exempt under section 297A.71,
subdivision 53; deleted text begin and
deleted text end

(18) building materials, equipment, and supplies for constructing, remodeling, or
improving a sustainable aviation fuel facility exempt under section 297A.71, subdivision
54 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (19) materials and services for repairs and remediation of damage caused by a natural
disaster exempt under section 297A.67, subdivision 41.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after May 31, 2025.
new text end

Sec. 3.

Minnesota Statutes 2025 Supplement, section 297A.75, subdivision 2, is amended
to read:

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must
be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1), (2), and (13), the applicant must be the purchaser;

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a
joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (8), (11), and (14), the owner of the qualifying business;

(8) for subdivision 1, clauses (9), (10), (12), (16), and (17), the applicant must be the
governmental entity that owns or contracts for the project or facility;

(9) for subdivision 1, clause (15), the applicant must be the owner or developer of the
building or project; deleted text begin and
deleted text end

(10) for subdivision 1, clause (18), the applicant must be the owner or developer of the
sustainable aviation fuel facility deleted text begin . deleted text end new text begin ; and
new text end

new text begin (11) for subdivision 1, clause (19), the applicant must be the owner of the damaged
property.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after May 31, 2025.
new text end

Sec. 4.

Minnesota Statutes 2025 Supplement, section 297A.75, subdivision 3, is amended
to read:

Subd. 3.

Application.

(a) The application must include sufficient information to permit
the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor,
or builder, under subdivision 1, clauses (3) to (12) or (14) to deleted text begin (18) deleted text end new text begin (19) new text end , the contractor,
subcontractor, or builder must furnish to the refund applicant a statement including the cost
of the exempt items and the taxes paid on the items unless otherwise specifically provided
by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under
this section.

(b) An applicant may not file more than two applications per calendar year for refunds
for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after May 31, 2025.
new text end

Sec. 5. new text begin SALES TAX REFUNDS FOR EXEMPT PURCHASES TO REPAIR
PROPERTY DAMAGE CAUSED BY NATURAL DISASTERS.
new text end

new text begin Refunds for eligible purchases under Minnesota Statutes, section 297A.67, subdivision
41, must not be issued until after June 30, 2026. Notwithstanding the requirement of
Minnesota Statutes, section 297A.67, subdivision 41, paragraph (b), that purchases must
be made within two years of the disaster to be exempt, refunds for eligible purchases for
disasters declared between June 1, 2025, and January 31, 2026, may be issued for purchases
made through December 31, 2027, or two years after the disaster, whichever is later.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end