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HF 5011

Certain sales and use tax exemptions repealed, changes to deposit of revenues made, and conforming changes made.

2025-2026 Regular Session Introduced by Samantha Sencer-Mura

Minnesota would divert most aircraft sales tax revenues to education and constitutional deposits, with DOT potentially collecting aircraft tax under an agreement starting after Jun

Introduction and first reading, referred to Taxes
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Bill Summary · HF 5011

Summary of HF 5011 (2025-2026) – Minnesota

Aimed at modifying sales and use tax treatment for aircraft, repealing certain exemptions, and changing revenue deposits and conforming provisions.

Overall purpose

  • Repeal specific sales and use tax exemptions related to aircraft and aviation equipment.
  • Establish a new framework for how aircraft-related tax revenue is deposited and used.
  • Create an agreement mechanism allowing the Department of Transportation to collect sales tax on aircraft in coordination with the Department of Revenue.
  • Align statutory provisions with the Minnesota Constitution regarding certain tax deposits.

Key provisions and changes

1) Deposit of revenues for aircraft taxes (new Subdivision 4b to § 297A.82)
- Revenue from the sale or purchase of an aircraft taxed under Minnesota’s sales tax must be deposited into the state treasury and credited to the Commissioner of Education for uses authorized under § 126C.44, subdivisions 4(2)(5)(6)(8)(9).
- For purposes of this subdivision, “revenue” does not include revenue (including interest and penalties) from the sales tax imposed under § 297A.62, subd. 1a. That revenue must be deposited as otherwise prescribed by the Minnesota Constitution, Art. XI, § 15.
- Effective date: sales and purchases after June 30, 2026.

2) Agreement for tax collection by the Department of Transportation (new Sec. 2)
- The Commissioner of Transportation may enter into an agreement with the Commissioner of Revenue.
- If approved by both, the Commissioner of Transportation will collect the sales tax on aircraft from those required to register or license aircraft in Minnesota.
- The Transportation Commissioner acts as an agent of the Department of Revenue and must follow applicable rules not inconsistent with the aircraft tax provisions.
- Effective date: sales and purchases after June 30, 2026.

3) Repeal of certain exemptions (Sec. 3)
- Repeals Minnesota Statutes 2024, § 297A.82, subdivisions 4 and 4a.
- Effective date: for sales and purchases after June 30, 2026.
- Background context (from Appendix): previously, Subdiv. 4 and 4a contained various exemptions related to aircraft, flight equipment, and deposits to the State Airports Fund. The repeals remove several of these exemptions and shift deposit rules as described above.

Who/what is affected

  • Aircraft purchasers and sellers: their sales tax treatment will change, including which revenues from aircraft sales go to education funding versus constitutionally restricted deposits.
  • Aviation industry entities (airlines, aircraft dealers, flight equipment suppliers): potential changes in tax collection responsibility, especially if the DOT acts as an agent for the revenue collection.
  • Minnesota Department of Education and the State Airports Fund: potential changes in how funds from aircraft-related taxes are allocated and deposited.
  • State government operations: tax administration adjustments as new collection and deposit mechanisms are implemented.

Procedural and timeline aspects

  • Effective date for the main changes and repeals: sales and purchases after June 30, 2026.
  • Administrative changes will involve coordination between:
    • Minnesota Department of Revenue (tax administration)
    • Minnesota Department of Transportation (potential collector as per agreement)
    • Minnesota Department of Education (allocation of certain tax revenues)
  • The bill enacts a new subdivision (4b) on deposits, adds an authorization for inter-agency agreement (Sec. 2), and repeals existing exemptions (Sec. 3).

Notes for readers

  • The bill emphasizes earmarking and directing certain aircraft-related tax revenue to specific state uses, while treating other aircraft tax revenue under constitutional deposit rules.
  • If enacted, expect administrative rulemaking and inter-agency agreements to define operational details, including compliance, reporting, and audit processes for aircraft purchases and registrations.

If you’d like, I can provide a side-by-side comparison with current law (pre-2026) to highlight all substantive shifts.

Compiled from official sources — confirm details with the bill’s official record.

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