Construction materials sales and use tax exemption provided for projects financed through an act relating to capital investment.

This bill creates a sales tax exemption for construction materials purchased by contractors working on public projects funded by state money. It directly affects contractors, subcontractors, and builders who supply materials for eligible capital projects financed by the state of Minnesota or local governments. The key mechanism requires the state to collect the sales tax initially and then refund it after June 30, 2026, using funds from the general state budget. The exemption applies only to projects receiving direct appropriations or grants from bills enacted in 2026, and the tax refund process must follow existing procedures for similar public projects.