East Grand Forks; refundable sales and use tax exemption for construction materials provided.

2025-2026 Regular Session Introduced by Steve Gander

Provides a temporary, refundable Minnesota sales tax exemption for construction materials used on the Civic Center Sports Complex and VFW Memorial Arena in East Grand Forks from No

Introduction and first reading, referred to Taxes

#citiesandtowns-specific #taxation-salesanduse

Purpose and intent

HF 2658 proposes a temporary, refundable exemption from Minnesota sales and use tax for construction materials used in specific projects in East Grand Forks. The bill targets the Civic Center Sports Complex and the VFW Memorial Arena, aiming to reduce the after-tax cost of materials and encourage development or renovation of these facilities. The exemption is refundable, meaning taxes paid can be recovered through a refund mechanism.

Key provisions and changes

Exemption scope

Applies to materials, supplies, and equipment used in the construction, reconstruction, upgrade, expansion, renovation, or remodeling of:
Civic Center Sports Complex
VFW Memorial Arena
Applies only to purchases made between November 30, 2025 and December 31, 2029.

Tax treatment and refund mechanics

The exemption is to be administered as if the standard Minnesota sales tax rate (as described in Minn. Stat. § 297A.62 and 297A.62, subds. 1 & 1a) applied, followed by a refund process aligned with the framework used for projects under Minn. Stat. § 297A.75, subd. 1, clause (17).
In practice, this means:
Tax is collected at the point of sale as usual.
The amount of tax paid would then be refunded to the project or purchaser under the stated refund mechanism.

Funding and appropriation

The refunds required by the exemption are to be paid from the state General Fund, via appropriation to the Minnesota Department of Revenue.

Effective date

The exemption becomes effective for qualifying sales and purchases made after November 30, 2025 and before December 31, 2029.

Affected parties and stakeholders

Primary beneficiaries

The City of East Grand Forks (specifically the Civic Center Sports Complex and the VFW Memorial Arena) and associated project developers/owners working on those facilities.

Tax administration

Minnesota Department of Revenue administers the refunds, using the existing refund framework referenced in the bill.

General taxpayers

The exemption is temporary and targeted; it does not alter ongoing tax policy beyond the specified window and project types.

Procedural and timeline notes

Introduction and status

HF 2658 was introduced in the 94th Legislature and referred to the House Taxes Committee on March 24, 2025.

Sunset window

The exemption applies only to projects initiated within a defined period (purchases after Nov 30, 2025 and before Dec 31, 2029), creating a built-in sunset.

Bottom-line impact

The bill would reduce the after-tax cost of construction materials for two East Grand Forks facilities by enabling a refundable sales and use tax exemption within a four-year window.

It relies on the existing state refund process to deliver the benefit, financed by General Fund appropriations.

The measure is narrowly targeted to specific facilities and a finite timeframe, with no broader statewide tax reform implied.

Bill