HF 2247

as introduced - 88th Legislature (2013 - 2014) Posted on 02/25/2014 01:48pm

A bill for an act
relating to taxation; exempting public housing authorities from certain sales taxes;
making public housing authority payments in lieu of taxes optional rather than
mandatory; amending Minnesota Statutes 2012, section 469.040, subdivision 3;
Minnesota Statutes 2013 Supplement, section 297A.70, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2013 Supplement, section 297A.70, subdivision 2,
is amended to read:

Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, local governments, the University of Minnesota, state universities,
community colleges, technical colleges, state academies, the Perpich Minnesota Center for
Arts Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;

(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and

(6) public libraries, public library systems, multicounty, multitype library systems
as defined in section 134.001, county law libraries under chapter 134A, state agency
libraries, the state library under section 480.09, and the Legislative Reference Library.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
except for leases entered into by the United States or its agencies or instrumentalities;

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
297A.67, subdivision 2, except for lodging, prepared food, candy, soft drinks, and alcoholic
beverages purchased directly by the United States or its agencies or instrumentalities; or

(5) goods or services purchased by a local government as inputs to goods and
services that are generally provided by a private business and the purchases would be
taxable if made by a private business engaged in the same activity.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

(d) As used in this subdivision, "local governments" means cities, counties, deleted text begin and
deleted text end townships new text begin , public housing agencies, and housing and redevelopment authorities new text end .

(e) As used in this subdivision, "goods or services generally provided by a private
business" include, but are not limited to, goods or services provided by liquor stores, gas
and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
and laundromats. "Goods or services generally provided by a private business" do not
include housing services, sewer and water services, wastewater treatment, ambulance and
other public safety services, correctional services, chore or homemaking services provided
to elderly or disabled individuals, or road and street maintenance or lighting.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2014.
new text end

Sec. 2.

Minnesota Statutes 2012, section 469.040, subdivision 3, is amended to read:

Subd. 3.

deleted text begin Statement filed with assessor; percentage tax on rentals deleted text end new text begin Optional
payments in lieu of taxes new text end .

deleted text begin Notwithstanding the provisions of subdivision 1, after a housing
project or a housing development project carried on under sections 469.016 to 469.026 has
become occupied, in whole or in part, an authority shall file with the assessor, on or before
April 15 of each year, a statement of the aggregate shelter rentals of that project collected
during the preceding calendar year. Unless a greater amount has been agreed upon between
the authority and the governing body or bodies for which the authority was created, in
whose jurisdiction the project is located, five percent of the aggregate shelter rentals shall
be charged to the authority as a service charge for the services and facilities to be furnished
with respect to that project. The service charge shall be collected from the authority in
the manner provided by law for the assessment and collection of taxes. The amount so
collected shall be distributed to the several taxing bodies in the same proportion as the tax
rate of each bears to the total tax rate of those taxing bodies. deleted text end The governing body or bodies
deleted text begin for which the authority has been created, deleted text end in whose jurisdiction the project is located deleted text begin , deleted text end may
agree with the authority for deleted text begin the payment of a service charge deleted text end new text begin payments in lieu of taxes new text end for a
housing project or a housing development project deleted text begin in an amount greater than five percent of
the aggregate annual shelter rentals of any project, deleted text end upon the basis of shelter rentals or upon
another basis deleted text begin agreed upon deleted text end . The deleted text begin service charge deleted text end new text begin payments new text end may not exceed the amount which
would be payable in taxes were the property not exempt. deleted text begin If such an agreement is made,
the service charge so agreed upon shall be collected and distributed in the manner above
provided. If the project has become occupied, or if the land upon which the project is to be
constructed has been acquired, the agreement shall specify the location of the project for
which the agreement is made. "Shelter rental" means the total rentals of a housing project
exclusive of any charge for utilities and special services such as heat, water, electricity, gas,
sewage disposal, or garbage removal. "Service charge" means payment in lieu of taxes.
The records of each project shall be open to inspection by the proper assessing officer.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2015.
new text end