Refundable sales and use tax exemption created for certain items and services purchased to repair property damage caused by natural disasters.

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:

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Subd. 41.

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Repairs following a natural disaster.

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(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:

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(i) windows;

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(ii) doors;

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(iii) siding materials;

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(iv) insulation;

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(v) trusses, shingles, and other roofing materials;

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(vi) power generators;

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(vii) equipment used for sandbagging;

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(viii) replacement parts for pumps, valves, and other small equipment;

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(ix) plywood; and

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(x) tree removal and other services related to hauling debris.

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(b) The exemption under this subdivision applies only if:

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(1) a natural disaster is declared by the federal government, or by a local official under

section 12.29; and

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(2) the purchase is made within two years of the disaster declaration.

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(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.

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EFFECTIVE DATE.

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This section is effective retroactively for sales and purchases

made after May 31, 2025.

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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
;
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and
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(18) building materials, equipment, and supplies for constructing, remodeling, or

improving a sustainable aviation fuel facility exempt under section
297A.71, subdivision

54
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.
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; and
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(19) materials and services for repairs and remediation of damage caused by a natural

disaster exempt under section 297A.67, subdivision 41.

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EFFECTIVE DATE.

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This section is effective retroactively for sales and purchases

made after May 31, 2025.

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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;
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and
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(10) for subdivision 1, clause (18), the applicant must be the owner or developer of the

sustainable aviation fuel facility
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.
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; and
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(11) for subdivision 1, clause (19), the applicant must be the owner of the damaged

property.

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EFFECTIVE DATE.

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This section is effective retroactively for sales and purchases

made after May 31, 2025.

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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
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(18)
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(19)
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, 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
.

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EFFECTIVE DATE.

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This section is effective retroactively for sales and purchases

made after May 31, 2025.

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Sec. 5.
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SALES TAX REFUNDS FOR EXEMPT PURCHASES TO REPAIR

PROPERTY DAMAGE CAUSED BY NATURAL DISASTERS.
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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.

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EFFECTIVE DATE.

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This section is effective the day following final enactment.

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