HF 1743

as introduced - 88th Legislature (2013 - 2014) Posted on 04/10/2013 11:04am

A bill for an act
relating to taxation; gross revenues and gross receipts; imposing a sports
memorabilia tax; expanding the sales tax to rentals of certain suites and box seats;
amending Minnesota Statutes 2012, sections 297A.61, subdivision 3; 297E.021,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 295.

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

Section 1.

new text begin [295.61] SPORTS MEMORABILIA GROSS RECEIPTS TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given, unless the context clearly indicates otherwise.
new text end

new text begin (b) "Commissioner" means the commissioner of revenue.
new text end

new text begin (c) "Sale" means a transfer of title or possession of tangible personal property,
whether absolutely or conditionally.
new text end

new text begin (d) "Sports memorabilia" means items available for sale to the public that are sold
under a license granted by any professional sports league or a team that is a franchise of a
professional sports league, or an affiliate or subsidiary of a league or a team, including:
new text end

new text begin (1) one-of-a-kind items related to sports figures, teams, or events;
new text end

new text begin (2) trading cards;
new text end

new text begin (3) photographs;
new text end

new text begin (4) clothing;
new text end

new text begin (5) sports event licensed items;
new text end

new text begin (6) sports equipment; and
new text end

new text begin (7) similar items.
new text end

new text begin (e) "Wholesale" or "sale at wholesale" means a sale to a retailer, as defined in section
297A.61, subdivision 9, for the purpose of reselling the property to a third party.
new text end

new text begin (f) "Wholesaler" means any person making wholesale sales of sports memorabilia
to purchasers in the state.
new text end

new text begin Subd. 2. new text end

new text begin Imposition. new text end

new text begin A tax is imposed on each sale at wholesale of sports
memorabilia equal to ten percent of the gross revenues from the sale.
new text end

new text begin Subd. 3. new text end

new text begin Estimated payments; annual return. new text end

new text begin (a) Each wholesaler must make
estimated payments of the tax for the calendar year to the commissioner in quarterly
installments by April 15, July 15, October 15, and January 15 of the following calendar
year. Estimated tax payments are not required if the tax for the calendar year is less than
$500. An underpayment of estimated installments bears interest at the rate specified in
section 270C.40, from the due date of the payment until paid or until the due date of the
annual return at the rate specified in section 270C.40. An underpayment of an estimated
installment is the difference between the amount paid and the lesser of (1) 90 percent of
one-quarter of the tax for the calendar year, or (2) the tax for the actual gross revenues
received during the quarter.
new text end

new text begin (b) A taxpayer with an aggregate tax liability of $10,000 or more during a fiscal
year ending June 30, must remit all liabilities by funds transfer as defined in section
336.4A-104, paragraph (a), in the next calendar year. The funds-transfer payment date,
as defined in section 336.4A-401, is on or before the first funds-transfer business day
after the date the tax is due.
new text end

new text begin (c) The taxpayer must file an annual return reconciling the estimated payments by
March 15 of the following calendar year.
new text end

new text begin (d) The estimated payments and annual return must contain the information and be
in the form prescribed by the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Compensating use tax. new text end

new text begin If the tax is not paid under subdivision 2, a
compensating tax is imposed on possession for sale or use of sports memorabilia in
the state. The rate of tax equals the rate under subdivision 2, and must be paid by the
possessor of the items.
new text end

new text begin Subd. 5. new text end

new text begin Administrative provisions. new text end

new text begin Unless specifically provided otherwise by this
section, the audit, assessment, refund, penalty, interest, enforcement, collection remedies,
appeal, and administrative provisions of chapters 270C and 289A that apply to taxes
imposed under chapter 297A apply to taxes imposed under this section.
new text end

new text begin Subd. 6. new text end

new text begin Disposition of revenues. new text end

new text begin The commissioner shall deposit the revenues
from the tax in the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made after June 30, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited
to, each of the transactions listed in this subdivision.

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration
in money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food.
Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy;

(4) dietary supplements; and

(5) all food sold through vending machines.

(e) A sale and a purchase includes the furnishing for a consideration of electricity,
gas, water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten
computer software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following
services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, new text begin including seat licenses, the rental of box seats, suites, sky boxes, and similar
facilities in stadiums and arenas new text end and the making available of amusement devices, tanning
facilities, reducing salons, steam baths, Turkish baths, health clubs, and spas or athletic
facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp, including furnishing the guest of the facility with access to
telecommunication services, and the granting of any similar license to use real property in
a specific facility, other than the renting or leasing of it for a continuous period of 30 days
or more under an enforceable written agreement that may not be terminated without prior
notice and including accommodations intermediary services provided in connection with
other services provided under this clause;

(3) nonresidential parking services, whether on a contractual, hourly, or other
periodic basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its
members sports and athletic facilities, without regard to whether a separate charge is
assessed for use of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public
on the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership
dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
swimming pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials by a third party, excluding delivery of aggregate
material used in road construction; and delivery of concrete block by a third party if the
delivery would be subject to the sales tax if provided by the seller of the concrete block; and

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services
provided by coin operated facilities operated by the customer, and rustproofing,
undercoating, and towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting services and
pest control and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not including
services performed within the jurisdiction they serve by off-duty licensed peace officers as
defined in section 626.84, subdivision 1, or services provided by a nonprofit organization
for monitoring and electronic surveillance of persons placed on in-home detention
pursuant to court order or under the direction of the Minnesota Department of Corrections;

(v) pet grooming services;

(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
public utility lines. Services performed under a construction contract for the installation of
shrubbery, plants, sod, trees, bushes, and similar items are not taxable;

(vii) massages, except when provided by a licensed health care facility or
professional or upon written referral from a licensed health care facility or professional for
treatment of illness, injury, or disease; and

(viii) the furnishing of lodging, board, and care services for animals in kennels and
other similar arrangements, but excluding veterinary and horse boarding services.

In applying the provisions of this chapter, the terms "tangible personal property"
and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
and the provision of these taxable services, unless specifically provided otherwise.
Services performed by an employee for an employer are not taxable. Services performed
by a partnership or association for another partnership or association are not taxable if
one of the entities owns or controls more than 80 percent of the voting power of the
equity interest in the other entity. Services performed between members of an affiliated
group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
group of corporations" means those entities that would be classified as members of an
affiliated group as defined under United States Code, title 26, section 1504, disregarding
the exclusions in section 1504(b).

For purposes of clause (5), "road construction" means construction of (1) public
roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
metropolitan area up to the point of the emergency response location sign.

(h) A sale and a purchase includes the furnishing for a consideration of tangible
personal property or taxable services by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
subdivisions.

(i) A sale and a purchase includes the furnishing for a consideration of
telecommunications services, ancillary services associated with telecommunication
services, cable television services, and direct satellite services. Telecommunication
services include, but are not limited to, the following services, as defined in section
297A.669: air-to-ground radiotelephone service, mobile telecommunication service,
postpaid calling service, prepaid calling service, prepaid wireless calling service, and
private communication services. The services in this paragraph are taxed to the extent
allowed under federal law.

(j) A sale and a purchase includes the furnishing for a consideration of installation if
the installation charges would be subject to the sales tax if the installation were provided
by the seller of the item being installed.

(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
59B.02, subdivision 11.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made after June 30, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 297E.021, subdivision 2, is amended to read:

Subd. 2.

Determination of revenue increase.

By March 15 of each fiscal year, the
commissioner of management and budget, in consultation with the commissioner, shall
determine the estimated increase in revenues received from new text begin (1) new text end taxes imposed under
new text begin new text end this chapter new text begin , and (2) the taxes imposed under section 295.61 and the amendments to
section 297A.61, subdivision 3, under section 2 new text end over new text begin (3) new text end the estimated revenues under
the February 2012 state budget forecast new text begin from the taxes imposed under this chapter new text end for
that fiscal year. For fiscal years after fiscal year 2015, the commissioner of management
and budget shall use the February 2012 state budget forecast for fiscal year 2015 new text begin for the
amount of taxes collected under this chapter new text end as the baseline. All calculations under this
subdivision must be made net of estimated refunds of the taxes required to be paid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end