Refundable sales and use tax exemption for Blue Line Extension light rail transit line construction materials provided.

A bill for an act

relating to taxation; sales and use; providing a refundable exemption for

construction materials for the Blue Line Extension light rail transit line; amending

Minnesota Statutes 2024, section 297A.71, 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.71, is amended by adding a subdivision

to read:

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Subd. 55.

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Construction materials; Blue Line Extension light rail transit line.

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Materials

and supplies used or consumed in, and equipment incorporated into, the construction or

improvement of the Blue Line Extension light rail transit line and associated facilities

including, but not limited to, stations, park-and-ride facilities, and maintenance facilities,

are exempt. The tax must be imposed and collected as if the rate under section 297A.62,

subdivision 1, applied and then refunded in the manner provided in section 297A.75. Refunds

must not be applied for or issued until July 1, 2029, and thereafter.

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EFFECTIVE DATE.

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This section is effective for sales and purchases made after June

30, 2026.

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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) building materials, equipment, and supplies for the construction or improvement

of the Blue Line Extension light rail transit line and associated facilities exempt under

section 297A.71, subdivision 55.

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EFFECTIVE DATE.

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This section is effective for sales and purchases made after June

30, 2026.

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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),
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and
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(17),
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and (19),
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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; and

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

sustainable aviation fuel facility.

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EFFECTIVE DATE.

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This section is effective for sales and purchases made after June

30, 2026.

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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 for sales and purchases made after June

30, 2026.

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