The Greater Minnesota Business Expansion Sales Tax Refund Program provides tax benefits to businesses located in Greater Minnesota that increase employment. Qualifying businesses that meet job-growth goals may receive sales tax refunds for purchases made during a seven-year period.
Purchases and use of tangible personal property and taxable services made by a qualified business are eligible for a sales tax refund. The purchase must be made, and the property or service must be delivered, during the business’ certification period.
The purchase and use of construction materials and supplies for property improvements by a qualified business in Greater Minnesota are also eligible for a sales tax refund. This refund applies whether the purchases are made directly by the business or by a contractor.
The maximum sales tax refund amount for each qualifying business is based on the application material submitted to DEED, subject to a maximum of $2 million annually and $10 million over the seven-year certification period.
The program is jointly administered by DEED, which certifies qualifying businesses and ensures that job-creation goals are reached, and by the Minnesota Department of Revenue, which processes the sales tax refunds.
Sales tax refunds are provided by the Department of Revenue, with a maximum of $7 million in refunds available to all businesses in a single fiscal year. File for the refund using the Department of Revenue's Form ST11P.
To become certified to participate in the Greater Minnesota Business Expansion Sales Tax Refund Program, a business must meet the following qualifications:
1) Increase employment at the business’s facility by a minimum of two full time equivalent (FTE) employees or 10 percent of the current number of employees, whichever is greater, within three years.
2) Pay compensation, which includes wages and benefits not mandated by law, which on an annualized basis equals at least 120 percent of the federal poverty level for a family of four, to all employees at the business’ facility. For 2014, these amounts are $28,620 per year or $13.76 per hour.
3) Be in operation for at least one year within a city, or a county if an agricultural processing facility, in Greater Minnesota, which generally excludes the seven county metropolitan area (the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington). See Eligibility FAQs for more details.
Meet prevailing wage guidelines at the business’ facility if a construction or improvement project is undertaken and if the business is awarded $200,000 or more in sales tax refunds. See more about prevailing wage requirements.
In addition, the business must not be engaged primarily in:
Complete this initial assessment. If you can answer 'yes' to all the questions, you may be eligible.
Applications for the Greater Minnesota Business Expansion Sales Tax Refund Program are accepted until all funds for the fiscal year have been awarded.
Before you apply, complete this initial assessment to see if you are eligible to participate. If you can answer 'yes' to all the questions, you may apply.
Applying is a three-step process:
The application fee is $500 or 3 percent of the award, whichever is greater. Only businesses that receive an award pay the application fee.
Participate in a business subsidy public hearing if the award amount is $500,000 or more. DEED will hold hearings will be held on a regular basis.
Execute a Business Subsidy Agreement with DEED. Sales tax refund eligibility is valid for a seven-year period, beginning on the first day of the calendar month following DEED’s certification of the business.
Businesses certified to participate in the program must submit periodic reports to DEED:
No refunds will be provided until all the reports are submitted and approved by DEED.
A business is no longer eligible to qualify for the program if it:
With questions regarding business qualification and certification.
With questions related to the sales tax refund.
With questions related to prevailing wages.
Download the program fact sheet.