ST. PAUL - District 22A Rep. Joe Schomacker, R-Luverne, sat in session on the Minnesota House of Representatives Taxes Committee last week in support of HF351, a bill that would expand tax exemption for firefighting and EMS supplies.
Since 1991, local fire stations and ambulance services in Minnesota have been required to pay taxes on purchasing supplies. This limits the purchasing power of these services, which in rural areas could make a big difference.
In an interview Monday, Schomacker explained his support for the bill using the example of the Hardwick Fire Department, which recently bought a “new” fire truck. The truck was 20 years old. He guessed that if the fire department had not needed to pay taxes on the fire truck, perhaps it could have afforded a newer model.
Schomacker further illustrated his position by using the hypothetical example of a fire department with a $300,000 annual budget. If the department has to pay a 6.875 percent sales tax on its equipment, that means more than $20,000 of the budget must be spent on taxes instead of on life-saving supplies.
Another way to look at the tax - in order to pay it, taxes must be raised on individuals. Using the same hypothetical fire department, a local community may choose to re-appropriate that $20,000 back to taxpayers. Given that substantial difference, Schomacker said expanding exemptions will “absolutely help rural fire departments.”
The bill outlines new exemptions.
If the fire department is public, supplies must be bought by the department directly or by the Director of Public Safety on behalf of the department and must be for the purpose of fire extinguishing and prevention.
If it’s a volunteer fire department, the department must be registered as a non-profit organization under 501(c)(3) designation. The rule of thumb in this circumstance is that anything a local government would be exempt from paying tax on is exempt for the fire department.
All equipment used for stocking ambulances would be considered exempt from sales tax.
If the bill is approved and becomes law, it applies to all purchases made after June 30, 2019.