Tax panel considers creating a new exemption for school supplies

Every parent knows that kids can get expensive. But school teachers tend to say the same thing, when you consider how often they purchase school supplies for their students out of their own take-home pay.

Rep. Elliott Engen (R-White Bear Township) hopes that such a burden could be eased a bit by creating a sales tax exemption for school supplies. That’s the gist of HF331, which would create exemptions for a host of products that a child uses during a typical school day.

On Tuesday, the House Taxes Committee laid the bill over, as amended, for possible omnibus bill inclusion.

“This is a pro-family bill,” Engen said. “This is a pro-affordability bill. And this is a pro-education bill. We want to deliver money back into families’ pockets, and the easiest way to do that is to eliminate this regressive sales tax.”

Alec Williams, a policy researcher at We Make America, testifies before the tax committee March 24 against a bill sponsored by Rep. Elliott Engen, right, that would provide a sales and use tax exemption for all school supplies. (Photo by Andrew VonBank)

School supplies and book bags are generally taxable under the state’s sales and use tax, but the bill would remove them from the list of taxable items. Among those mentioned in the bill are binders, calculators, tape, chalk, paper products, glue, notebooks, markers, lunch boxes, pens, pencils, erasers, crayons, rulers and scissors, as well as backpacks having a retail price of $60 or less.

A revenue estimate indicates potential changes to the state’s tax code would reduce state revenues by $41.2 million in Fiscal Year 2027. It also estimates there were approximately 1.5 million school aged children in Minnesota in 2025, and that the average spending per child was $342.

“The budgetary cost of this bill outweighs its benefit to families,” said Alec Williams, a policy researcher with We Make MN, adding that his research shows the average Minnesota family would only save $11.89 per child with the tax exemption. He suggested that there are better ways to help teachers.

 “This might save them 7% on their school supplies,” he said. “But it doesn’t do anything about the 93% of out-of-pocket expenditures that we shouldn’t be making them cover in the first place.”

The committee’s co-chair, Rep. Aisha Gomez (DFL-Mpls), said that she found the list of potential tax-free products too expansive. “This is an expensive, gimmicky solution that doesn’t actually solve the problem that it sets out to solve.”

While Rep. Cheryl Youakim (DFL-Hopkins) said that the bill’s $41.2 million in lost revenue would be much better spent funding schools, Rep. Drew Roach (R-Farmington) praised the bill as “putting money back in the pockets of those who need it the most.”