HF 2423

as introduced - 88th Legislature (2013 - 2014) Posted on 02/27/2014 03:33pm

A bill for an act
relating to taxation; sales and use; modifying the applicability of the exemption
for certain construction contracts; clarifying the exemption for sales to
government; amending Minnesota Statutes 2012, section 297A.71, subdivision 1,
by adding a subdivision; Minnesota Statutes 2013 Supplement, section 297A.70,
subdivision 2; repealing Minnesota Rules, part 8130.1200, subpart 3.

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 new text begin , on behalf of, or for use by new text end the following governments and political subdivisions, or
to new text begin , on behalf of, or for use by new text end 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:

deleted text begin (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;
deleted text end

deleted text begin (2) deleted text end new text begin (1) new text end 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;

deleted text begin (3) deleted text end new text begin (2) new text end 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;

deleted text begin (4) deleted text end new text begin (3) new text end 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

deleted text begin (5) deleted text end new text begin (4) new text end 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, and
townships.

(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 297A.71, subdivision 1, is amended to read:

Subdivision 1.

Scope.

new text begin (a) new text end The gross receipts from the sale of, and storage,
distribution, use, or consumption of the tangible personal property contained in this
section are specifically exempted from the taxes imposed by this chapter.

new text begin (b) new text end Building materials, equipment, and supplies and other items exempt under
this section are exempt regardless of whether purchased by the owner or a contractor,
subcontractor, or builder. new text begin Unless otherwise provided in this section, the exemption
on qualifying purchases may be claimed through the use of an exemption certificate
prescribed by the commissioner as defined in section 297A.72, or by applying for a refund
under section 297A.75.
new text end

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. 3.

Minnesota Statutes 2012, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 49. new text end

new text begin Construction materials; local government exemption. new text end

new text begin Building,
construction, or reconstruction materials used in constructing buildings or facilities used
principally by a school district or local government as defined under section 297A.70, and
materials used in the construction, reconstruction, repair, maintenance, or improvement of
public infrastructure of any kind, including, but not limited to, roads, bridges, culverts,
drinking water facilities, and wastewater facilities, are exempt.
new text end

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. 4. new text begin REPEALER.
new text end

new text begin Minnesota Rules, part 8130.1200, subpart 3, new text end new text begin is repealed.
new text end

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