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HF 1227

Lakeville; refundable sales and use tax exemption provided for construction materials.

2025-2026 Regular Session Introduced by Jon Koznick and 1 co-sponsor

HF 1227 would create a refundable state sales tax exemption for eligible construction materials used in Lakeville projects, returning tax paid.

Introduction and first reading, referred to Taxes
#citiesandtowns-specific #taxation-salesanduse
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WeVote Research Nonpartisan
Bill Summary · HF 1227

Summary of HF 1227 (2025-2026) – Minnesota

Title

Lakeville; refundable sales and use tax exemption provided for construction materials.

Primary purpose and intent

HF 1227 proposes a refundable state sales and use tax exemption for certain construction materials used in Lakeville. The bill aims to reduce the cost of construction by excluding eligible materials from the state sales tax, with a mechanism to refund the tax paid. The focus is on materials used in construction projects within the city limits of Lakeville.

Key provisions and changes proposed

  • Exemption scope: The bill would authorize a refund of the state sales and use tax paid on eligible construction materials used in projects within Lakeville. The exemption applies to materials that would normally be subject to Minnesota state sales and use tax.
  • Refund mechanism: Taxpayers would be eligible to receive a refund for tax paid on qualified construction materials. The bill uses the term “refundable” to indicate that the tax is returned to the purchaser or project sponsor rather than merely exempted at the point of sale.
  • Geographic applicability: The exemption is tied to Lakeville, Minnesota, meaning only construction materials used in projects located in Lakeville would qualify for the refund.
  • Administration and administration-related requirements: While the text provided does not include specific administrative details, refundable exemptions typically require:
    • Documentation demonstrating material purchases and their use in Lakeville projects
    • Compliance with state tax filing and refund procedures
    • Potential caps, thresholds, or eligibility criteria (e.g., project type, size, or duration) as defined in the bill or subsequent fiscal notes
  • Sponsors: Co-sponsors listed are Jeff Witte and Jon Koznick, indicating bipartisan or cross-chamber support from the sponsors.

Who would be affected

  • Construction materials purchasers: Builders, developers, and property owners undertaking qualifying construction projects in Lakeville could seek refunds of state sales and use tax paid on eligible materials.
  • Construction industry businesses: Suppliers and contractors handling purchases of qualifying materials may experience changes in invoicing and documentation requirements to support refund claims.
  • City and local economy: If enacted, the exemption could influence construction activity within Lakeville by reducing after-tax costs, potentially stimulating development and related economic activity.

Procedural and timeline aspects

  • Current status: Introduction and first reading occurred on February 20, 2025, with referral to the Taxes committee.
  • Legislative process: As a House of Representatives bill, HF 1227 would proceed through the committee stage (Taxes) for consideration of policy, fiscal impact, and potential amendments, followed by votes in the House and, if approved, transmission to the Senate for its own consideration.
  • Fiscal notes and implementation: A refundable exemption would typically require a fiscal note estimating the state revenue impact and outlining administrative costs. The bill would define or necessitate administrative rules or guidance for processing refunds.

Notes

  • The summary is based on the bill title and stated purpose. The full text would provide precise eligibility criteria (e.g., qualifying materials, project types, refund caps, time limits, application procedures, and any sunset provisions).
  • As of the provided action history, no amendments or final determinations are available. Tracking updates would reveal any changes to scope, funding, or implementation details.

If you’d like, I can look up the full text or any fiscal notes to provide more precise eligibility criteria and estimated fiscal impact.

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

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