Minnesota Enacts Changes to Qualified Business and Nonprofit Economic Development Corporation Exemptions

Effective July 1, 2017, the refundable sales tax exemption for qualified businesses in greater Minnesota cities is expanded to ten years for businesses that invest at least $200,000,000 over a ten-year period. Certification becomes effective the first day of the calendar month immediately following the date that the commissioner informs the business of the award of the benefit. The current exemption period for qualified business is seven years. A qualified business is entitled to a sales tax exemption, up to $5 million (previously $2 million) annually and $40 million (previously $10 million) during the total period of the agreement. Other requirements include that the business pledges to satisfy the minimum expansion requirements within 3 years of the agreement, the business must increase the number of full-time equivalent employees in greater Minnesota by 2 employees or 10% whichever is greater and that the commission determines that the business would not have expanded its operations in greater Minnesota without the tax incentives available.

Applicable retroactively to sales and purchases made after January 1, 2013, and before January 1, 2017, a refundable exemption is enacted for materials and supplies used or consumed in and equipment incorporated into the construction of a retail development consisting of retail space for a grocery store, fueling center, and other retail space by a federally exempt nonprofit economic development corporation, provided that the development is located in a city with no grocery store and the city is at least 20 miles from another city with a grocery store. Tax must have been paid and a refund claim must be filed by December 31, 2017. (Ch. 1 (H.F.1 a), First Special Session, Laws 2017)

Posted on June 19, 2017