After a two-year delay, Minnesota’s much hated 1989 sales tax rebate program for capital equipment purchases ended last week. The change is a major coup for small businesses and the Minnesota Chamber of Commerce, which lobbied hard for legislators to rescind a law many considered an unnecessary hardship.
According to the Minnesota Department of Revenue, about 2,000 factories spend $4 billion each year on new equipment and repair parts and then shell out $270 million for a sales tax they eventually get back. Under the old law, Minnesota factories had to pay sales tax, file returns and wait months to get rebates on every piece of equipment bought or repaired.
The change makes newly purchased capital equipment, parts and repairs tax-exempt. As of Wednesday, businesses can simply give their equipment supplier an ST-3 certificate of exemption form.
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