Watertown officials brief Tax Committee on proposed sales-tax exemption for water projects

Representative Ami Harder presented draft language for a proposal that would exempt construction materials for a Watertown water tower and water treatment facility from state sales tax and asked the committee to accept an informational hearing.

"The city of Watertown is a small community of around 4,700 people facing a significant construction cost for a large public project," said Michael Walters, mayor of Watertown, who asked the committee for an exemption on behalf of local taxpayers. Dan Tolsma, Watertown’s city administrator, also introduced the project and answered procedural questions.

Representative Harder described the bill’s two main components: (1) an exemption for materials and supplies used in construction, reconstruction, upgrades and renovations of a water tower and water treatment facility in Watertown; and (2) an appropriation to the Department of Revenue for a refund mechanism for the tax relief. Committee members treated the session as informational because a House File number had not been assigned; Representative Harder and Chair Davids agreed the measure would be laid over for formal consideration once a bill number is available.

The Department of Revenue told the committee it had no position at the informational hearing. Mayor Walters said Watertown needs the projects to meet tightening state regulations and accommodate growth; he also said the city’s fire department provides mutual aid to surrounding townships and that the exemption would lower the cost borne by Watertown taxpayers.