This bill introduces a refundable construction exemption for materials and supplies used in the construction of new multifamily residential housing specifically aimed at first-time homebuyers in Minnesota. It amends Minnesota Statutes 2024, section 297A.71, by adding a new subdivision that outlines the criteria for the exemption, which includes that at least one unit must be occupied by a first-time homebuyer after construction, and the purchase agreement must reflect the tax savings in the home’s price. The exemption is limited to taxes paid on the first $165,000 of costs for materials, supplies, and equipment, and it will expire on July 1, 2033. The bill also specifies that the tax on these purchases will be collected as if they were taxable and then refunded according to section 297A.75.

Additionally, the bill amends section 297A.75 to include the new exemption for multifamily residential housing in the list of items for which tax is collected as if taxable. It also updates the eligibility criteria for refunds to include the owner of the residential housing at the time of purchase of the construction materials. The effective date for these changes is set for sales and purchases made after June 30, 2025.

Statutes affected:
Introduction: 297A.71, 297A.75
1st Engrossment: 297A.71, 297A.75