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Minnesota Legislature

Office of the Revisor of Statutes

HF 779

as introduced - 91st Legislature (2019 - 2020) Posted on 02/27/2019 12:57pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 02/07/2019

Current Version - as introduced

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A bill for an act
relating to taxation; sales and use; modifying exemption provisions for construction
materials by certain contractors; adding a refund provision; amending Minnesota
Statutes 2018, sections 297A.71, by adding a subdivision; 297A.75, subdivisions
1, 2, 3.

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

Section 1.

Minnesota Statutes 2018, section 297A.71, is amended by adding a subdivision
to read:


new text begin Subd. 51. new text end

new text begin Construction materials purchased by contractors; exemption for certain
entities.
new text end

new text begin (a) Building, construction, or reconstruction materials, supplies, and equipment
purchased by a contractor, subcontractor, or builder and used or consumed in or incorporated
into buildings or facilities used principally by the following entities are exempt:
new text end

new text begin (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c);
new text end

new text begin (2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d);
new text end

new text begin (3) hospitals and nursing homes owned and operated by political subdivisions of the
state, as listed in section 297A.70, subdivision 2, paragraph (a), clause (3);
new text end

new text begin (4) county law libraries under chapter 134A and public libraries, regional public library
systems, and multicounty, multitype library systems as defined in section 134.001;
new text end

new text begin (5) nonprofit groups, as defined under section 297A.70, subdivision 4;
new text end

new text begin (6) hospitals, outpatient surgical centers, and critical access dental providers, as defined
under section 297A.70, subdivision 7; and
new text end

new text begin (7) nursing homes and boarding care homes, as defined under section 297A.70,
subdivision 18.
new text end

new text begin (b) Materials, supplies, and equipment 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 purchased
by a contractor or subcontractor of the following entities are exempt:
new text end

new text begin (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c); or
new text end

new text begin (2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d).
new text end

new text begin (c) The tax on purchases exempt under this subdivision must be imposed and collected
as if the rate under section 297A.62, subdivision 1, applied, and then refunded in the manner
provided in 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, 2019.
new text end

Sec. 2.

Minnesota Statutes 2018, section 297A.75, subdivision 1, is amended to read:


Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the following
exempt items must be imposed and collected as if the sale were taxable and the rate under
section 297A.62, subdivision 1, applied. The exempt items include:

(1) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section 297A.71,
subdivision 14
;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

(6) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23
;

(7) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(8) equipment and materials used for the generation, transmission, and distribution of
electrical energy and an aerial camera package exempt under section 297A.68, subdivision
37;

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph
(a), clause (10);

(10) materials, supplies, and equipment for construction or improvement of projects and
facilities under section 297A.71, subdivision 40;

(11) materials, supplies, and equipment for construction, improvement, or expansion
of:

(i) an aerospace defense manufacturing facility exempt under Minnesota Statutes 2014,
section 297A.71, subdivision 42;

(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision
45
;

(iii) a research and development facility exempt under Minnesota Statutes 2014, section
297A.71, subdivision 46; and

(iv) an industrial measurement manufacturing and controls facility exempt under
Minnesota Statutes 2014, section 297A.71, subdivision 47;

(12) enterprise information technology equipment and computer software for use in a
qualified data center exempt under section 297A.68, subdivision 42;

(13) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);

(14) items purchased for use in providing critical access dental services exempt under
section 297A.70, subdivision 7, paragraph (c);

(15) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
44
;

(16) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivision 49; deleted text beginand
deleted text end

(17) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivision 50, paragraph (b)deleted text begin.deleted text endnew text begin ; and
new text end

new text begin (18) building construction or reconstruction materials, supplies, and equipment purchased
by an entity eligible under section 297A.71, subdivision 51.
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, 2019.
new text end

Sec. 3.

Minnesota Statutes 2018, section 297A.75, subdivision 2, is amended to read:


Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must
be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a
joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying
business;

(8) for subdivision 1, clauses (9), (10), and (13), the applicant must be the governmental
entity that owns or contracts for the project or facility;

(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the
building or project; deleted text beginand
deleted text end

(10) for subdivision 1, clause (17), the applicant must be the owner or developer of the
building or projectdeleted text begin.deleted text endnew text begin ; and
new text end

new text begin (11) for subdivision 1, clause (18), the applicant must be the entity eligible under section
297A.71, subdivision 51.
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, 2019.
new text end

Sec. 4.

Minnesota Statutes 2018, section 297A.75, subdivision 3, is amended to read:


Subd. 3.

Application.

(a) The application must include sufficient information to permit
the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor,
or builder, under subdivision 1, clauses (3) to (13) or (15) to deleted text begin(17)deleted text endnew text begin (18)new text end, the contractor,
subcontractor, or builder must furnish to the refund applicant a statement including the cost
of the exempt items and the taxes paid on the items unless otherwise specifically provided
by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under
this section.

(b) An applicant may not file more than two applications per calendar year for refunds
for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2019.
new text end