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Senate committee advances bill to let specialty pharmacies seek MN Care drug-tax refunds quarterly
Summary
The Minnesota Senate Health and Human Services Committee recommended passage of Senate File 2815, which would let pharmacies apply for refunds of the 1.8% Minnesota Care legend drug tax on a quarterly basis instead of annually; the measure was passed by the committee and referred to the Taxes Committee.
The Minnesota Senate Health and Human Services Committee on April 3 recommended passage of Senate File 2815, a bill from Senator Weber to allow quarterly refunds of the Minnesota Care legend drug tax for pharmacies that remit the 1.8% provider tax on prescription drugs.
The change is intended to reduce cash-flow pressure on pharmacies that collect the tax from wholesalers but primarily dispense medications to out-of-state patients. ‘‘The amounts withheld create a significant cash flow burden on our company until the tax can be trued up upon annual filing,’’ Randy Shindelar, chief financial officer for A Stroop Companies and Sterling Specialty Pharmacy, told the committee. He said Sterling Specialty’s Mendota Heights facility had $1,510,000 withheld in 2024 while its net Minnesota tax obligation was about $42,000; the $1,470,000 difference was refunded annually under current law.
Senator Weber, the bill author and a co‑authoring group that includes Senators Ottke, Klein and Carlson, said the proposal preserves the substance of existing law (citing section 295.52) while changing the timing of refunds. Committee members asked about fiscal impacts; Senator Whitver reported the Department of Revenue provided a revenue estimate showing no net cost to the state.
After questions, the committee approved a motion that Senate File 2815 be recommended to pass and be referred to the Committee on Taxes. The motion was adopted by voice vote.
If enacted, the bill would allow pharmacies that are due refunds under current statute to make refund requests quarterly rather than only at annual filing, returning withheld funds to affected businesses sooner. The committee record shows the Department of Revenue participated in developing the bill language with stakeholders.
Senate File 2815 now moves to the Senate Taxes Committee for further consideration.
