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HF 978

Sales and use tax exemption for grain bins and related construction materials and supplies and tractor tires provided.

2025-2026 Regular Session Introduced by Keith Allen and 4 co-sponsors

Minnesota HF 978 would exempt from sales/use tax grain bins, related construction materials, and tractor tires used in farming.

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#agricultureandagriculturedepartment #taxation-salesanduse
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Bill Summary · HF 978

Summary of HF 978 (Minnesota, 2025-2026 Session)

Overview

HF 978 seeks to modify Minnesota’s sales and use tax by providing an exemption for certain agricultural-related purchases. Specifically, the bill would exempt grain bins, related construction materials and supplies, and tractor tires from sales and use taxes. The measure is sponsored by multiple legislators and received its first reading and referral to the Taxes committee in February 2025. An additional sponsor was added later in April 2025.

Purpose and Intent

  • To reduce the after-tax cost of acquiring equipment and materials used in grain storage and farming operations.
  • To support agricultural producers by lowering capital and operating costs associated with grain storage infrastructure and essential farming equipment.
  • To align tax policy with the needs of Minnesota farmers and the agricultural sector.

Key Provisions (Proposed Changes)

  • Sales and Use Tax Exemption for Grain Bins: Grain bins would be exempt from Minnesota sales and use taxes at the point of purchase.
  • Exemption for Related Construction Materials and Supplies: Construction materials and supplies specifically used for grain bin projects would also be exempt. This may cover items such as structural components, fasteners, siding, roofing, and other materials necessary to construct or upgrade grain storage facilities.
  • Exemption for Tractor Tires: Tractor tires purchased for agricultural use would be exempt from sales and use taxes.
  • Scope and Administration: The bill would define eligible purchasers (likely farmers or farming operations) and establish the application of the exemption within the state sales/use tax framework. It may include compliance or documentation requirements typical of tax exemptions.

Note: The exact language for eligibility criteria (e.g., definition of “grain bin,” “construction materials,” or “agricultural use”) and administrative details (timing, sunset provisions, or thresholds) is not provided in the summary. The bill would be implemented through the existing tax statute framework if enacted.

Who Is Affected

  • Primary Beneficiaries: Agricultural producers and farming operations engaged in grain storage and handling, and those purchasing tractor tires for farm use.
  • Businesses/ Vendors: Retailers and suppliers of grain bins, construction materials for grain storage facilities, and tractor tires would engage in tax-exempt transactions when selling to eligible customers.
  • Local Tax Administration: State tax authorities would administer and enforce the exemption, including verification of eligibility and compliance.

Procedural and Timeline Aspects

  • Introduction and Referral: Introduced and referred to the House Taxes Committee on February 17, 2025.
  • Sponsor Notes: Co-sponsors include John Huot, Keith Allen, Paul Anderson, John Burkel, and Chris Swedzinski. An additional author (Sexton) was added on April 10, 2025.
  • Next Steps: The bill would proceed through committee discussion, potential amendments, and, if advanced, floors of the House and Senate, followed by gubernatorial action to become law.

Potential Impact

  • Economic Impact: Reduction in upfront cost for grain storage infrastructure and farm equipment, potentially encouraging investment in grain handling capacity and maintenance.
  • Budgetary Considerations: Tax exemptions reduce state revenue from sales and use taxes; the Department of Revenue would need to estimate and monitor revenue impact and enforcement costs.
  • Agricultural Outcomes: May support farm productivity and storage efficiency, potentially affecting grain marketing and supply chain dynamics within Minnesota.

If you’d like, I can tailor this summary to include estimated fiscal impact or potential sunset or sunset provisions once the bill’s full text is available.

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

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