HF 1311

as introduced - 89th Legislature (2015 - 2016) Posted on 03/02/2015 01:19pm

A bill for an act
relating to taxation; sales and use; modifying the exemption for local government
purchases; amending Minnesota Statutes 2014, section 297A.70, subdivision 2.

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

Section 1.

Minnesota Statutes 2014, section 297A.70, subdivision 2, is amended to read:

Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, local governments, the University of Minnesota, state universities,
community colleges, technical colleges, state academies, the Perpich Minnesota Center for
Arts Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) notwithstanding paragraph (d), the sales and purchases by the Metropolitan
Council of vehicles and repair parts to equip operations provided for in section 473.4051
are exempt through December 31, 2016;

(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and

(6) public libraries, public library systems, multicounty, multitype library systems
as defined in section 134.001, county law libraries under chapter 134A, state agency
libraries, the state library under section 480.09, and the Legislative Reference Library.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
except for leases entered into by the United States or its agencies or instrumentalities;

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
297A.67, subdivision 2, except for lodging, prepared food, candy, soft drinks, and alcoholic
beverages purchased directly by the United States or its agencies or instrumentalities; or

(5) goods or services purchased by a local government as inputs to a liquor store, gas
or electric utility, solid waste hauling service, solid waste recycling service, landfill, golf
course, marina, campground, cafe, or laundromat.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

(d) For purposes of the exemption granted under this subdivision, "local
governments" has the following meaning:

(1) for the period prior to January 1, 2016, local governments means statutory
or home rule charter cities, counties, deleted text begin and deleted text end townships new text begin , and any joint powers board or
organization created under section 471.59 new text end ; new text begin and
new text end

(2) deleted text begin for the period of deleted text end new text begin beginning new text end January 1, 2016, deleted text begin to December 31, 2016, deleted text end local
governments means statutory or home rule charter cities, counties, and townships; special
districts as defined under section 6.465, except for the Metropolitan Council under sections
473.123 to 473.549; any instrumentality of a statutory or home rule charter city, county,
or township as defined in section 471.59; and any joint powers board or organization
created under section 471.59 deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (3) beginning January 1, 2017, local governments means statutory or home rule
charter cities, counties, and townships; special districts as defined under section 6.465; any
instrumentality of a statutory or home rule charter city, county, or township as defined in
section 471.59; and any joint powers board or organization created under section 471.59.
deleted 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, 2014. For the period beginning July 1, 2014, and ending June 30, 2015, a joint
powers board or organization that paid sales taxes on exempt purchases may file directly
for a refund as provided in section 2.
new text end

Sec. 2. new text begin TEMPORARY REFUND MECHANISM.
new text end

new text begin Any joint powers board or organization that paid sales tax on purchases made after
June 30, 2014, and before July 1, 2015, may apply directly to the commissioner of revenue
for a refund under this section. The application must be made on forms prescribed by the
commissioner and the purchaser may make only one application for the entire period.
Interest on the refund shall be paid at the rate in Minnesota Statutes, section 270C.405,
from 90 days after the refund claim is filed with the commissioner of revenue. The amount
required to make the refunds is annually appropriated to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

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