HF 5401 Summary

• Adds a new sales and use tax exemption for nonprofit physical rehabilitation clinics organized under section 501(c)(3) that provide physical therapy, occupational therapy, or speech therapy services.

• Requires qualifying clinics to serve at least 50 percent of patients covered by medical assistance, MinnesotaCare, or home and community-based services programs, and provide at least 10,000 patient encounters annually with uninsured or public program-covered patients.

• Requires qualifying clinics to offer sliding scale payment for services and have no more than 15 percent of patients covered by private health insurance in the most recent calendar year.

• Exemption does not apply to certain items including food and beverages, building materials not used principally by the clinic, or motor vehicle leases.

• Effective date for sales and purchases made after June 30, 2024.