HF 161

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; reducing the general rate of the 
  1.3             sales and use tax and the sales tax on motor vehicles; 
  1.4             exempting sales to political subdivisions of a state; 
  1.5             exempting sales of lottery tickets from the sales tax; 
  1.6             amending Minnesota Statutes 1998, sections 297A.02, 
  1.7             subdivision 1; 297A.25, subdivision 11; 297A.259; 
  1.8             297A.47; 349A.01, subdivision 7; and 349A.10, 
  1.9             subdivision 7. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1998, section 297A.02, 
  1.12  subdivision 1, is amended to read: 
  1.13     Subdivision 1.  [GENERALLY.] Except as otherwise provided 
  1.14  in this chapter, there is imposed an excise tax of 6.5 six 
  1.15  percent of the gross receipts from sales at retail made by any 
  1.16  person in this state. 
  1.17     Sec. 2.  Minnesota Statutes 1998, section 297A.25, 
  1.18  subdivision 11, is amended to read: 
  1.19     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
  1.20  all sales, including sales in which title is retained by a 
  1.21  seller or a vendor or is assigned to a third party under an 
  1.22  installment sale or lease purchase agreement under section 
  1.23  465.71, of tangible personal property to, and all storage, use 
  1.24  or consumption of such property by, the following governmental 
  1.25  entities are exempt:  
  1.26     (1) the United States and its agencies and 
  1.27  instrumentalities,; 
  2.1      (2) the University of Minnesota, state universities, 
  2.2   community colleges, technical colleges, state academies, and the 
  2.3   Lola and Rudy Perpich Minnesota center for arts education, an 
  2.4   instrumentality of a political subdivision that is accredited as 
  2.5   an optional/special function school by the North Central 
  2.6   Association of Colleges and Schools, school districts,; 
  2.7      (3) public libraries, public library systems, multicounty, 
  2.8   multitype library systems as defined in section 134.001, county 
  2.9   law libraries under chapter 134A, the state library under 
  2.10  section 480.09, and the legislative reference library are 
  2.11  exempt; and 
  2.12     (4) political subdivisions of a state and their agencies 
  2.13  and instrumentalities. 
  2.14     As used in this subdivision, "school districts" means 
  2.15  public school entities and districts of every kind and nature 
  2.16  organized under the laws of the state of Minnesota, including, 
  2.17  without limitation, school districts, intermediate school 
  2.18  districts, education districts, service cooperatives, secondary 
  2.19  vocational cooperative centers, special education cooperatives, 
  2.20  joint purchasing cooperatives, telecommunication cooperatives, 
  2.21  regional management information centers, and any instrumentality 
  2.22  of a school district, as defined in section 471.59. 
  2.23     Sales exempted by this subdivision include sales under 
  2.24  section 297A.01, subdivision 3, paragraph (f).  
  2.25     Sales to hospitals and nursing homes owned and operated by 
  2.26  political subdivisions of the state are exempt under this 
  2.27  subdivision.  
  2.28     Sales of supplies and equipment used in the operation of an 
  2.29  ambulance service owned and operated by a political subdivision 
  2.30  of the state are exempt under this subdivision provided that the 
  2.31  supplies and equipment are used in the course of providing 
  2.32  medical care.  Sales to a political subdivision of repair and 
  2.33  replacement parts for emergency rescue vehicles and fire trucks 
  2.34  and apparatus are exempt under this subdivision.  
  2.35     Sales to a political subdivision of machinery and 
  2.36  equipment, except for motor vehicles, used directly for mixed 
  3.1   municipal solid waste management services at a solid waste 
  3.2   disposal facility as defined in section 115A.03, subdivision 10, 
  3.3   are exempt under this subdivision.  
  3.4      Sales to political subdivisions of chore and homemaking 
  3.5   services to be provided to elderly or disabled individuals are 
  3.6   exempt. 
  3.7      Sales to a town of gravel and of machinery, equipment, and 
  3.8   accessories, except motor vehicles, used exclusively for road 
  3.9   and bridge maintenance, and leases of motor vehicles exempt from 
  3.10  tax under section 297B.03, clause (10), are exempt. 
  3.11     Sales of telephone services to the department of 
  3.12  administration that are used to provide telecommunications 
  3.13  services through the intertechnologies revolving fund are exempt 
  3.14  under this subdivision. 
  3.15     This exemption shall not apply to building, construction or 
  3.16  reconstruction materials purchased by a contractor or a 
  3.17  subcontractor as a part of a lump-sum contract or similar type 
  3.18  of contract with a guaranteed maximum price covering both labor 
  3.19  and materials for use in the construction, alteration, or repair 
  3.20  of a building or facility.  This exemption does not apply to 
  3.21  construction materials purchased by tax exempt entities or their 
  3.22  contractors to be used in constructing buildings or facilities 
  3.23  which will not be used principally by the tax exempt entities. 
  3.24     This exemption does not apply to the leasing of a motor 
  3.25  vehicle as defined in section 297B.01, subdivision 5, except for:
  3.26     (1) leases entered into by the United States or its 
  3.27  agencies or instrumentalities; and 
  3.28     (2) leases entered into by a political subdivision of motor 
  3.29  vehicles exempt from tax under chapter 297B. 
  3.30     The tax imposed on sales to political subdivisions of the 
  3.31  state under this section applies to all political subdivisions 
  3.32  other than those explicitly exempted under this subdivision, 
  3.33  notwithstanding section 115A.69, subdivision 6, 116A.25, 
  3.34  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
  3.35  469.127, 473.448, 473.545, or 473.608 or any other law to the 
  3.36  contrary enacted before 1992. 
  4.1      Sales exempted by this subdivision include sales made to 
  4.2   other states or political subdivisions of other states, if the 
  4.3   sale would be exempt from taxation if it occurred in that state, 
  4.4   but do not include sales under section 297A.01, subdivision 3, 
  4.5   paragraphs (c) and (e). 
  4.6      Sec. 3.  Minnesota Statutes 1998, section 297A.259, is 
  4.7   amended to read: 
  4.8      297A.259 [LOTTERY TICKETS; IN LIEU TAX EXEMPTION.] 
  4.9      Sales of state lottery tickets are exempt from the tax 
  4.10  imposed under section 297A.02.  The state lottery must on or 
  4.11  before the 20th day of each month transmit to the commissioner 
  4.12  of revenue an amount equal to the gross receipts from the sale 
  4.13  of lottery tickets for the previous month multiplied by the 
  4.14  combined tax rate under sections 297A.02, subdivision 1, and 
  4.15  297A.021, subdivision 1.  The resulting payment is in lieu of 
  4.16  the sales tax that otherwise would be imposed by this chapter.  
  4.17  The commissioner shall deposit the money transmitted as provided 
  4.18  by section 297A.44 and the money must be treated as other 
  4.19  proceeds of the sales tax.  Gross receipts for purposes of this 
  4.20  section mean the proceeds of the sale of tickets before 
  4.21  deduction of a commission or other compensation paid to the 
  4.22  vendor or retailer for selling tickets. 
  4.23     Sec. 4.  Minnesota Statutes 1998, section 297A.47, is 
  4.24  amended to read: 
  4.25     297A.47 [REPORTING OF SALES TAX ON MINNESOTA GOVERNMENTS.] 
  4.26     The commissioner shall estimate the amount of revenues 
  4.27  derived from imposing the tax under this chapter and chapter 
  4.28  297B on state agencies and political subdivisions for each 
  4.29  fiscal year and shall report this amount to the commissioner of 
  4.30  finance before the time for filing reports for the fiscal year 
  4.31  with the United States Department of Commerce.  The commissioner 
  4.32  of finance in reporting the sales tax and sales tax on motor 
  4.33  vehicles collections to the United States Department of Commerce 
  4.34  shall exclude this amount from the sales and motor vehicle 
  4.35  collections.  Sales tax and Sales tax on motor vehicles revenues 
  4.36  received from political subdivisions must be reported as 
  5.1   intergovernmental grants or similar intergovernmental revenue.  
  5.2   The amount of the sales tax and sales tax on motor vehicles paid 
  5.3   by state agencies must be reported as reduced state expenditures.
  5.4      Sec. 5.  Minnesota Statutes 1998, section 349A.01, 
  5.5   subdivision 7, is amended to read: 
  5.6      Subd. 7.  [GROSS RECEIPTS.] "Gross receipts" means all 
  5.7   money received from the sale of lottery tickets less amounts 
  5.8   transmitted to the commissioner of revenue under section 
  5.9   297A.259. 
  5.10     Sec. 6.  Minnesota Statutes 1998, section 349A.10, 
  5.11  subdivision 7, is amended to read: 
  5.12     Subd. 7.  [TRANSFER OF CASH BALANCES.] (a) A lottery cash 
  5.13  flow account is created in the special revenue fund in the state 
  5.14  treasury.  At the end of each week the director shall deposit in 
  5.15  the lottery cash flow account from the lottery fund and the 
  5.16  lottery prize fund all amounts that the director determines are 
  5.17  not required for immediate use in the lottery fund or the 
  5.18  lottery prize fund.  The commissioner of finance shall credit to 
  5.19  the lottery cash flow account interest on all money deposited in 
  5.20  the lottery cash flow account under this subdivision.  
  5.21     (b) The director shall notify the commissioner of finance 
  5.22  whenever the director determines that money transferred under 
  5.23  paragraph (a) is required for the immediate use of the lottery 
  5.24  fund or the lottery prize fund.  Upon receiving the notification 
  5.25  the commissioner shall transfer the amount identified in the 
  5.26  notification.  Amounts necessary to make immediate payment for 
  5.27  expenses or prizes from the lottery fund or the prize fund are 
  5.28  appropriated from the lottery cash flow account to the director. 
  5.29     (c) The director shall notify the commissioner of finance 
  5.30  30 days after each month as to the amount of the net proceeds 
  5.31  that must be transferred under subdivision 5, and the director 
  5.32  shall notify the commissioner of finance 20 days after each 
  5.33  month as to the amount that must be transferred under section 
  5.34  297A.259, and as necessary the director shall notify the 
  5.35  commissioner of other amounts required by law to be transferred. 
  5.36     Sec. 7.  [EFFECTIVE DATE.] 
  6.1      Sections 1 to 6 are effective for sales and purchases 
  6.2   occurring after June 30, 1999.