1.1                          A bill for an act 
  1.2             relating to taxation; allowing purchases of certain 
  1.3             prizes to qualify as sales for resale; amending 
  1.4             Minnesota Statutes 1998, section 297A.01, subdivision 
  1.5             4. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 297A.01, 
  1.8   subdivision 4, is amended to read: 
  1.9      Subd. 4.  (a) A "retail sale" or "sale at retail" means a 
  1.10  sale for any purpose other than resale in the regular course of 
  1.11  business.  
  1.12     (b) Property utilized by the owner only by leasing such 
  1.13  property to others or by holding it in an effort to so lease it, 
  1.14  and which is put to no use by the owner other than resale after 
  1.15  such lease or effort to lease, shall be considered property 
  1.16  purchased for resale.  
  1.17     (c) Master computer software programs that are purchased 
  1.18  and used to make copies for sale or lease are considered 
  1.19  property purchased for resale.  
  1.20     (d) Sales of building materials, supplies and equipment to 
  1.21  owners, contractors, subcontractors or builders for the erection 
  1.22  of buildings or the alteration, repair or improvement of real 
  1.23  property are "retail sales" or "sales at retail" in whatever 
  1.24  quantity sold and whether or not for purpose of resale in the 
  1.25  form of real property or otherwise.  
  2.1      (e) A sale of carpeting, linoleum, or other similar floor 
  2.2   covering which includes installation of the carpeting, linoleum, 
  2.3   or other similar floor covering is a contract for the 
  2.4   improvement of real property.  
  2.5      (f) A sale of shrubbery, plants, sod, trees, and similar 
  2.6   items that includes installation of the shrubbery, plants, sod, 
  2.7   trees, and similar items is a contract for the improvement of 
  2.8   real property.  
  2.9      (g) Aircraft and parts for the repair thereof purchased by 
  2.10  a nonprofit, incorporated flying club or association utilized 
  2.11  solely by the corporation by leasing such aircraft to 
  2.12  shareholders of the corporation shall be considered property 
  2.13  purchased for resale.  The leasing of the aircraft to the 
  2.14  shareholders by the flying club or association shall be 
  2.15  considered a sale.  Leasing of aircraft utilized by a lessee for 
  2.16  the purpose of leasing to others, whether or not the lessee also 
  2.17  utilizes the aircraft for flight instruction where no separate 
  2.18  charge is made for aircraft rental or for charter service, shall 
  2.19  be considered a purchase for resale; provided, however, that a 
  2.20  proportionate share of the lease payment reflecting use for 
  2.21  flight instruction or charter service is subject to tax pursuant 
  2.22  to section 297A.14. 
  2.23     (h) Tangible personal property that is awarded as prizes in 
  2.24  a game of skill or chance is considered property for resale.  
  2.25  Tangible personal property awarded as prizes or promotions in 
  2.26  connection with lawful gambling as defined in section 349.12, 
  2.27  the state lottery, or other activities shall not be considered 
  2.28  property purchased for resale. 
  2.29     (i) Tangible personal property that is utilized or employed 
  2.30  in the furnishing or providing of services under section 
  2.31  297A.01, subdivision 3, paragraph (d), or in conducting lawful 
  2.32  gambling under chapter 349 or the state lottery under chapter 
  2.33  349A, including property given as promotional items, shall not 
  2.34  be considered property purchased for resale.  Machines, 
  2.35  equipment, or devices that are used to furnish, provide, or 
  2.36  dispense goods or services, including coin-operated devices, 
  3.1   shall not be considered property purchased for resale. 
  3.2      Sec. 2.  [EFFECTIVE DATE.] 
  3.3      Section 1 is effective for purchases made after June 30, 
  3.4   1999.