Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Hospitality Sales Tax Exemption topic
No spam. Unsubscribe anytime.
Committee considers sales-tax exemption for food service equipment to aid hospitality industry
Summary
Senate File 34 would extend Minnesota—s capital equipment sales-tax exemption to food service equipment used by restaurants and related businesses; Hospitality Minnesota testified in support and members discussed whether an eight-year sunset should apply.
Senate File 34, presented Jan. 21 to the Minnesota Senate Taxes Committee by Senator Rest, would extend the state—s capital equipment sales-tax exemption to include food service equipment used by restaurants, catering services and similar hospitality operations.
Hannah Zinn, director of government relations for Hospitality Minnesota, testified the exemption would create tax equity between manufacturers and food service businesses, and said the industry faces high input costs and would benefit from lower upfront equipment costs and incentives for energy-efficient purchases. Zinn said hospitality supports more than 384,000 jobs in Minnesota and contributes billions in annual tax revenue.
Sponsor Senator Rest said the bill largely mirrors a 2023 proposal and makes only minor edits, chiefly reordering definitions and updating the effective date to 2025. Rest and supporters described the measure as an expansion of an existing tax expenditure rather than a new one; committee members questioned whether the bill should carry an eight-year sunset applied elsewhere to new tax expenditures.
Senator Klein asked whether the omission of an eight-year sunset in Senate File 34 was intentional. Rest responded that the exemption is an extension of an existing tax expenditure and therefore not subject to the new-expenditure sunset rule unless members choose to add one. Several senators, including Hochschild and Nelson, spoke in favor and framed the change as supportive of small and rural hospitality businesses struggling with inflation and the aftermath of pandemic-era closures.
A department fiscal estimate from March 2023 and the bill—s current estimate were described as similar; sponsor noted that the fiscal year 2025 estimate reflects only 11 months of collections because of the bill—s effective date. With no objections, the committee laid Senate File 34 over for possible inclusion.
No final vote on the underlying exemption was taken during the hearing.
