Committee hears bill to allow quarterly refunds of MN Care legend-drug tax to ease cash-flow for specialty pharmacies

Senate Taxes Committee members on Thursday considered a change to the MN Care legend-drug tax refund process intended to ease cash-flow burdens for pharmacies that dispense large volumes of drugs shipped out of state.

Senate File 2815 (identified in committee as “Senate file 20 eight-fifteen”) would allow pharmacies to seek quarterly refunds for amounts withheld under the 1.8% MN Care legend-drug tax rather than waiting once per year. The bill’s sponsor, Senator Weber, said the language was negotiated with the Department of Revenue and affected businesses.

Randy Shindelar, chief financial officer of Astrid Companies and Sterling Specialty Pharmacy, told the committee his Mendota Heights specialty pharmacy ships roughly 98% of its prescriptions to patients outside Minnesota. He said wholesalers charge and remit the 1.8% tax on all purchases, then Sterling must wait to recover most of those amounts in an annual refund, creating a large working-capital burden; Astrid reported approximately $1.51 million withheld in 2024 while net tax obligation was roughly $42,000.

Shindelar said the business borrowed on an external credit facility to manage the timing mismatch and asked for a practical solution. The bill’s change—moving to quarterly refundability—was described as preserving the substance of the law while reducing cash-flow strain on businesses that primarily ship out of state. Senator Weber thanked agency staff for working on language; the committee laid the bill over for further consideration.

Ending: Committee members asked no follow-up questions requiring immediate revision; the bill was laid over for future action.