1.1                          A bill for an act 
  1.2             relating to taxation; allowing motor vehicle dealers 
  1.3             to elect to pay motor vehicle sales tax or use tax for 
  1.4             use of a vehicle other than for demonstration 
  1.5             purposes; exempting loaner vehicles from motor vehicle 
  1.6             sales tax and use tax; amending Minnesota Statutes 
  1.7             2002, sections 168A.03; 297B.035, by adding 
  1.8             subdivisions.  
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2002, section 168A.03, is 
  1.11  amended to read: 
  1.12     168A.03 [EXEMPT VEHICLES.] 
  1.13     The registrar shall not issue a No certificate of title 
  1.14  need be obtained for: 
  1.15     (1) a vehicle owned by the United States; 
  1.16     (2) a vehicle owned by a manufacturer or dealer and held 
  1.17  for sale, even though incidentally moved on the highway or used 
  1.18  pursuant to section 168.27 or 168.28, or a vehicle used by a 
  1.19  manufacturer solely for testing; 
  1.20     (3) a vehicle owned by a nonresident and not required by 
  1.21  law to be registered in this state; 
  1.22     (4) a vehicle owned by a nonresident and regularly engaged 
  1.23  in the interstate transportation of persons or property for 
  1.24  which a currently effective certificate of title has been issued 
  1.25  in another state; 
  1.26     (5) a vehicle moved solely by animal power; 
  1.27     (6) an implement of husbandry; 
  2.1      (7) special mobile equipment; 
  2.2      (8) a self-propelled wheelchair or invalid tricycle; 
  2.3      (9) a trailer (i) having a gross weight of 4,000 pounds or 
  2.4   less unless a secured party holds an interest in the trailer or 
  2.5   a certificate of title was previously issued by this state or 
  2.6   any other state or (ii) designed primarily for agricultural 
  2.7   purposes except recreational equipment or a manufactured home, 
  2.8   both as defined in section 168.011, subdivisions 8 and 25; 
  2.9      (10) a snowmobile.  
  2.10     Sec. 2.  Minnesota Statutes 2002, section 297B.035, is 
  2.11  amended by adding a subdivision to read: 
  2.12     Subd. 5.  [USE BY DEALER.] If a motor vehicle dealer uses a 
  2.13  vehicle, purchased for resale in the ordinary course of 
  2.14  business, other than for demonstration purposes, the dealer may 
  2.15  elect to pay the motor vehicle sales tax under this chapter or 
  2.16  the use tax under chapter 297A based on the reasonable rental 
  2.17  value of the vehicle. 
  2.18     Sec. 3.  Minnesota Statutes 2002, section 297B.035, is 
  2.19  amended by adding a subdivision to read: 
  2.20     Subd. 6.  [LOANER VEHICLES.] The loan of a motor vehicle by 
  2.21  a motor vehicle dealer to a customer as a replacement for a 
  2.22  vehicle that is being serviced or repaired does not constitute a 
  2.23  sale or use of the vehicle if (1) the dealer receives no 
  2.24  monetary consideration for the loan, or (2) any consideration is 
  2.25  paid by a motor vehicle manufacturer under a warranty that was 
  2.26  included in the original purchase price of the vehicle being 
  2.27  serviced or repaired.