Sales and use tax exemption provided for local governments on the purchase of motor vehicle leases and construction materials when purchased by a contractor or subcontractor.

This bill would exempt local governments in Minnesota from paying sales and use taxes when they purchase motor vehicle leases or construction materials through contractors or subcontractors. The exemption applies specifically to cities, counties, townships, special districts, and their instrumentalities, but excludes certain businesses like liquor stores and utilities from receiving this tax break. The law would take effect for purchases made after June 30, 2026, and amends existing state tax statutes to clarify these exemptions.