Nelson bill to exempt medical-related purchases from sales tax receives first hearing

A bill authored by Senator Carla Nelson (R-Rochester) to make more medical supplies affordable for Minnesotans was heard in the Senate Taxes Committee on Wednesday.

“Healthcare costs are a growing concern for families across Minnesota,” Senator Nelson said. “This bill provides relief where it’s needed most — on the essential items that keep people healthy. This is a common-sense step to reduce costs for patients and providers, and I’m optimistic we can get this included in this year’s comprehensive tax bill later in session.”

The bill, Senate File 268, aims to make healthcare more affordable by eliminating sales taxes on more essential medical supplies. Families managing illnesses or injuries would face reduced out-of-pocket costs, and healthcare providers would save on the supplies needed for patient care.

Currently, medical items like drugs, medical devices, and some durable equipment like prosthetics are exempt from sales tax. In addition, some of these purchases — like accessories and supplies — are exempt only if purchased through Medicare or Medicaid.

This bill proposes two changes:

1. A new exemption for “Health Care Materials”

  • Nondurable, disposable medical items prescribed by doctors would become exempt from sales tax.
  • This change targets supplies that are primarily and customarily used to serve a medical purpose

2. More exemptions for private health insurance purchases

  • Items covered by private health insurance plans (but that are not already exempt) would also qualify for the exemption, extending the same relief to a broader range of purchases.

The proposal was laid over for possible inclusion in a larger tax bill later this session.