Ambulance and firefighting equipment tax exemption sought

A tax on a tax. It’s a phrase that came up frequently at Tuesday’s House Taxes Committee hearing.

Representatives from the fields of firefighting and emergency medical services said that taxes on the purchase of equipment are costing valuable public safety dollars.

Sponsored by Rep. Greg Davids (R-Preston), HF351 would expand the sales tax exemption for equipment bought by local fire departments to include purchases made on their behalf by the Department of Public Safety, and provide an exemption for equipping and resupplying ambulances and first responder vehicles.

It was laid over for possible omnibus bill inclusion. It has no Senate companion.

Rep. Greg Davids

Davids explained that the current taxing of such purchases is a holdover from the 1991 legislative session, when part of the solution to a large budget shortfall was to cut aid to local and county governments.

“Basically, the cities and counties asked their purchases to have sales tax on them that they’d keep as local government aid,” Davids said. “As we’ve gone through some better times, I’ve always had a problem with government taxing government. You have to raise taxes to pay a tax.

“Now the trucks and ambulances are exempt, but if you go to buy some extra equipment for them – which can be very expensive – there’s a sales tax on that.”

Moorhead Fire Chief Rich Duysen spoke of the 11 hazardous materials teams funded by the state’s Department of Public Safety.

“When we purchase things as a municipality, we don’t have to pay sales tax, but when the state purchases equipment for the 11 hazmat teams, they have to pay sales tax and, over the past three years, they’ve spent about $200,000 in sales tax. That’s $200,000 from the fire safety account that we could have spent on other equipment or other things to keep our public safe.”

Buck McAlpin, legislative consultant for the Minnesota Ambulance Association, said tight budgets and shrinking revenues for emergency medical services have contributed to two small rural ambulance services closing in 2018.