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HF 1352

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 03/02/2017 04:21pm

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

Bill Text Versions

Engrossments
Introduction Posted on 02/16/2017
1st Engrossment Posted on 03/02/2017

Current Version - 1st Engrossment

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A bill for an act
relating to taxation; petroleum; dedicating revenues from the aviation taxes on
gasoline used as a substitute for aviation gasoline to the state airports fund; allowing
the aviation tax refund to commercial pesticide applicators; amending Minnesota
Statutes 2016, sections 296A.01, by adding a subdivision; 296A.07, subdivision
4; 296A.09, subdivisions 1, 3, 5, 6; 296A.15, subdivisions 1, 4; 296A.17,
subdivisions 1, 2, 3; 296A.18, subdivisions 1, 8; 296A.19, subdivision 1; repealing
Minnesota Rules, part 8125.1300, subpart 3.

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

Section 1.

Minnesota Statutes 2016, section 296A.01, is amended by adding a subdivision
to read:


new text begin Subd. 13a. new text end

new text begin Dealer of gasoline used as a substitute for aviation gasoline. new text end

new text begin "Dealer of
gasoline used as a substitute for aviation gasoline" means any person who sells gasoline on
the premises of an airport as defined under section 360.013, subdivision 39, to be dispensed
directly into the fuel tank of an aircraft.
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, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 296A.07, subdivision 4, is amended to read:


Subd. 4.

Exemptions.

The provisions of subdivision 1 do not apply to gasoline or
denatured ethanol purchased by:

(1) a transit system or transit provider receiving financial assistance or reimbursement
under section 174.24, 256B.0625, subdivision 17, or 473.384;

(2) providers of transportation to recipients of medical assistance home and
community-based services waivers enrolled in day programs, including adult day care,
family adult day care, day treatment and habilitation, prevocational services, and structured
day services;

(3) an ambulance service licensed under chapter 144E;

(4) providers of medical or dental services by a federally qualified health center, as
defined under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus
Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile
medical unit; deleted text beginor
deleted text end

(5) a licensed distributor to be delivered to a terminal for use in blendingnew text begin; or
new text end

new text begin (6) a dealer of gasoline used as a substitute for aviation gasolinenew 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, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 296A.09, subdivision 1, is amended to read:


Subdivision 1.

Gasoline tax imposed.

Subject to any refunds or credits there is imposed
an excise tax, at the rate of five cents per gallon on all aviation gasoline received, sold,
stored, or withdrawn from storage in this statenew text begin and on all gasoline used as a substitute for
aviation gasoline
new text end. Aviation gasoline is defined in section 296A.01, subdivision 7.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 296A.09, subdivision 3, is amended to read:


Subd. 3.

Exception to tax for aviation use.

The provisions of subdivisions 1 and 2 do
not apply to aviation gasolinenew text begin, gasoline,new text end or special fuel purchased and placed in the fuel
tanks of an aircraft outside the state, even though the gasoline may be consumed within this
state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 296A.09, subdivision 5, is amended to read:


Subd. 5.

Tax not on consumption.

The taxes imposed by subdivisions 1 and 2 are
expressly declared not to be a tax upon consumption of aviation gasolinenew text begin, gasoline,new text end or special
fuel by an aircraft.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 296A.09, subdivision 6, is amended to read:


Subd. 6.

Exemptions.

The provisions of subdivisions 1 and 2 do not apply to aviation
gasolinenew text begin, gasoline used as a substitute for aviation gasoline,new text end or jet fuel purchased by an
ambulance service licensed under chapter 144E.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 296A.15, subdivision 1, is amended to read:


Subdivision 1.

Monthly gasoline report; shrinkage allowance.

(a) Except as provided
in paragraph (e), on or before the 23rd day of each month, every person who is required to
pay a gasoline tax shall file with the commissioner a report, in the form and manner
prescribed by the commissioner, showing the number of gallons of petroleum products
received by the reporter during the preceding calendar month, and other information the
commissioner may require. A written report is deemed to have been filed as required in this
subdivision if postmarked on or before the 23rd day of the month in which the tax is payable.

(b) The number of gallons of gasoline must be reported in United States standard liquid
gallons, 231 cubic inches, except that the commissioner may upon written application and
for cause shown permit the distributor to report the number of gallons of gasoline as corrected
to a temperature of 60-degrees Fahrenheit. If the application is granted, all gasoline covered
in the application and allowed by the commissioner must continue to be reported by the
distributor on the adjusted basis for a period of one year from the date of the granting of
the application. The number of gallons of petroleum products other than gasoline must be
reported as originally invoiced. Each report must show separately the number of gallons of
aviation gasoline received by the reporter during each calendar monthnew text begin and the number of
gallons of gasoline sold to a dealer of gasoline used as a substitute for aviation fuel during
each calendar month
new text end.

(c) Each report must also include the amount of gasoline tax on gasolinenew text begin, and the amount
of aviation tax on gasoline used as a substitute for aviation gasoline,
new text end received by the reporter
during the preceding month. In computing the tax a deduction of 2.5 percent of the quantity
of gasoline received by a distributor shall be made for evaporation and loss. At the time of
reporting, the reporter shall submit satisfactory evidence that one-third of the 2.5 percent
deduction has been credited or paid to dealers on quantities sold to them.

(d) Each report shall contain a confession of judgment for the amount of the tax shown
due to the extent not timely paid.

(e) Under certain circumstances and with the approval of the commissioner, taxpayers
may be allowed to file reports annually.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 296A.15, subdivision 4, is amended to read:


Subd. 4.

Failure to use or sell for intended purpose; report required.

(a) Any person
who buys aviation gasolinenew text begin, gasoline from a dealer of gasoline used as a substitute for
aviation gasoline,
new text end or special fuel for aircraft usenew text begin,new text end and who has paid the excise taxes due
directly or indirectly through the amount of the tax being included in the price, or otherwise,
and uses said gasoline or special fuel in motor vehicles or knowingly sells it to any person
for use in motor vehicles shall, on or before the 23rd day of the month following that in
which such gasoline or special fuel was so used or sold, report the fact of the use or sale to
the commissioner in the form and manner prescribed by the commissioner.

(b) Any person who buys gasoline other than aviation gasoline and who has paid the
motor vehicle gasoline excise tax directly or indirectly through the amount of the tax being
included in the price of the gasoline, or otherwise, who knowingly sells such gasoline to
any person to be used for the purpose of producing or generating power for propelling
aircraft, or who receives, stores, or withdraws from storage gasoline to be used for that
purpose, shall, on or before the 23rd day of the month following that in which such gasoline
was so sold, stored, or withdrawn from storage, report the fact of the sale, storage, or
withdrawal from storage to the commissioner in the form and manner prescribed by the
commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 296A.17, subdivision 1, is amended to read:


Subdivision 1.

Aviation refund requirements.

Any person claiming to be entitled to
any refund or credit provided for in subdivision 3 shall receive the refund or credit upon
filing with the commissioner a claim in such form and manner prescribed by the
commissioner. The claim shall set forth, among other things, the total number of gallons of
aviation gasolinenew text begin, gasoline used as a substitute for aviation gasoline,new text end or special fuel for
aircraft use upon which the claimant has directly or indirectly paid the excise tax provided
for in this chapter, during the calendar year, which has been received, stored, or withdrawn
from storage by the claimant in this state and not sold or otherwise disposed of to others.
All claims for refunds under this subdivision shall be made on or before April 30 following
the end of the calendar year for which the refund is claimed.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 296A.17, subdivision 2, is amended to read:


Subd. 2.

Claim for refund; aviation tax.

(a) Any person who buys aviation gasolinenew text begin,
gasoline used as a substitute for aviation gasoline,
new text end or special fuel for aircraft use and who
has paid the excise taxes directly or indirectly through the amount of the tax being included
in the price, or otherwise, who does not use it in motor vehicles or receive, sell, store, or
withdraw it from storage for the purpose of producing or generating power for propelling
aircraft, shall be reimbursed and repaid the amount of the tax paid upon filing with the
commissioner a claim in the form and manner prescribed by the commissioner. The claim
shall state the total amount of the aviation gasolinenew text begin, gasoline used as a substitute for aviation
gasoline,
new text end or special fuel for aircraft use purchased and used by the applicant, and shall state
when and for what purpose it was used. On being satisfied that the claimant is entitled to
payment, the commissioner shall approve the claim and transmit it to the commissioner of
management and budget. The postmark on the envelope in which a written claim is mailed
determines the date of filing.

(b) If a claim contains an error in preparation in computation or preparation, the
commissioner is authorized to adjust the claim in accordance with the evidence shown on
the claim or other information available to the commissioner.

(c) An applicant who files a claim that is false or fraudulent, is subject to the penalties
provided in section 296A.23 for knowingly and willfully making a false claim.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 296A.17, subdivision 3, is amended to read:


Subd. 3.

Refund on graduated basis.

Any person who has directly or indirectly paid
the excise tax on aviation gasolinenew text begin, gasoline used as a substitute for aviation gasoline,new text end or
special fuel for aircraft use provided for by this chapter and new text beginhas either paidnew text end the airflight
property tax under section 270.072 new text beginor is an aerial applicator with a category B, general aerial
license, under section 18B.33,
new text end
shall, as to all such aviation gasolinenew text begin, gasoline used as a
substitute for aviation gasoline,
new text end and special fuel received, stored, or withdrawn from storage
by the person in this state in any calendar year and not sold or otherwise disposed of to
others, or intended for sale or other disposition to others, on which such tax has been so
paid, be entitled to the following graduated reductions in such tax for that calendar year, to
be obtained by means of the following refunds:

(1) on each gallon of deleted text beginsuchdeleted text end aviation gasolinenew text begin, gasoline used as a substitute for aviation
gasoline,
new text end or special fuel up to 50,000 gallons, all but five cents per gallon;

(2) on each gallon of deleted text beginsuchdeleted text end aviation gasolinenew text begin, gasoline used as a substitute for aviation
gasoline,
new text end or special fuel above 50,000 gallons and not more than 150,000 gallons, all but
two cents per gallon;

(3) on each gallon of deleted text beginsuchdeleted text end aviation gasolinenew text begin, gasoline used as a substitute for aviation
gasoline,
new text end or special fuel above 150,000 gallons and not more than 200,000 gallons, all but
one cent per gallon;

(4) on each gallon of deleted text beginsuchdeleted text end aviation gasolinenew text begin, gasoline used as a substitute for aviation
gasoline,
new text end or special fuel above 200,000, all but one-half cent per gallon.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 296A.18, subdivision 1, is amended to read:


Subdivision 1.

Intent; gasoline use.

All gasoline received in this state and all gasoline
produced in or brought into this state except aviation gasolinenew text begin, gasoline sold to a dealer of
gasoline used as a substitute for aviation gasoline,
new text end and marine gasoline shall be determined
to be intended for use in motor vehicles in this state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 296A.18, subdivision 8, is amended to read:


Subd. 8.

Airports.

The revenues derived from the excise taxes on aviation gasolinenew text begin,
gasoline used as a substitute for aviation gasoline,
new text end and deleted text beginondeleted text end special fuel received, sold, stored,
or withdrawn from storage as substitutes for aviation gasolinedeleted text begin,deleted text end shall be paid into the state
treasury and credited to the state airports fund. There is hereby appropriated such sums as
are needed to carry out the provisions of this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 296A.19, subdivision 1, is amended to read:


Subdivision 1.

Retention.

All distributors, dealers, special fuel dealers, bulk purchasers,new text begin
dealers of gasoline used as a substitute for aviation gasoline,
new text end and all users of special fuel
shall keep a true and accurate record of all purchases, transfers, sales, and use of petroleum
products and special fuel, including copies of all sales tickets issued, in a form and manner
approved by the commissioner, and shall retain all such records for 3-1/2 years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after June
30, 2017.
new text end

Sec. 15. new text begin REPEALER.
new text end

new text begin Minnesota Rules, part 8125.1300, subpart 3, new text end new text begin is repealed.
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

APPENDIX

Repealed Minnesota Rule: H1352-1

8125.1300 REFUNDS AND CREDITS.

Subp. 3.

Gasoline used in aircraft.

Refunds for gasoline, other than aviation gasoline, purchased and used to produce or generate power for propelling aircraft shall be issued only to those claimants who have received approval to use such gasoline from the Federal Aviation Administration as evidenced by a supplemental type certificate.