S.F. No. 5421 Summary

• Adds a new exemption to Minnesota sales and use tax for nonprofit physical rehabilitation clinics providing outpatient rehabilitation services, effective for sales after June 30, 2024.

• Requires qualifying clinics to be organized as charitable 501(c)(3) entities and provide physical therapy, occupational therapy, or speech therapy services.

• Requires clinics to have at least 50 percent of patients covered by medical assistance, MinnesotaCare, or home and community-based services programs, and no more than 15 percent of patients covered by private health insurance.

• Requires clinics to provide at least 10,000 annual patient encounters with uninsured patients or those covered by medical assistance programs, and must offer sliding scale payment options.

• Exemption excludes prepared food, candy, soft drinks, building materials, motor vehicle leases, and purchases by affiliated clinics or offices not operating as rehabilitation facilities.