Bill to exempt more medical items from sales tax advances in Minnesota Senate

SAINT PAUL, Minn. — A Rochester lawmaker's bill to exempt more health care items from sales tax is progressing in the Minnesota Senate.

Senate File 268, chief authored by Sen. Carla Nelson, R-Rochester, was heard by the Senate Tax Committee on Wednesday, Jan. 22 and held over possible inclusion in an omnibus bill.

The proposed law would extend an existing sales tax exemption on certain durable medical devices — such as blood pressure monitors and glucose meters — to also include disposable, nondurable medical items that are prescribed by a health care provider.

Examples of medical items that are currently taxed, but would be exempt if the bill becomes law, include humidifiers and air purifiers, sharps containers, first aid kits, face masks, single-use bed pans and stocking donners.

The bill also extends this tax exemption to private health insurers, Nelson said. Current state law exempts eligible medical items from sales tax when purchased through Medicare or Medicaid/Medical Assistance.

"That's one of the issues, to make sure that we're treating Minnesotans the same on paying sales tax for the same product, whether their Medicare or Medicaid is paying their health plans or they have private health plans," Nelson said.

A Minnesota Department of Revenue analysis found that the proposed exemptions would reduce sales tax revenues by $1,180,000 in fiscal year 2026. That impact is anticipated to grow to nearly $1.5 million during fiscal year 2029.

"It'll be consumers who see the benefit," Nelson said.

Nelson said this bill is one part of a larger goal to reduce health care costs. Other efforts Nelson said she supports are keeping Minnesota's reinsurance program — which helps health insurers cover the cost of medical bills that exceed $50,000 — and tamping down the cost of prescription drugs by requiring insurers to pass savings from drug manufacturers' rebates down to patients.

"I have no problems with drug manufacturers giving rebates to make their drugs more affordable, but they need to make sure that those rebates go to the patients and not to the insurance companies," Nelson said.