HF 1811

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxes; modifying provisions relating to 
  1.3             the sales tax on mixed municipal solid waste 
  1.4             collection and disposal services; amending Minnesota 
  1.5             Statutes 1994, sections 297A.01, subdivision 3, and by 
  1.6             adding a subdivision; 297A.25, subdivision 11; and 
  1.7             297A.45. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1994, section 297A.01, 
  1.10  subdivision 3, is amended to read: 
  1.11     Subd. 3.  A "sale" and a "purchase" includes, but is not 
  1.12  limited to, each of the following transactions: 
  1.13     (a) Any transfer of title or possession, or both, of 
  1.14  tangible personal property, whether absolutely or conditionally, 
  1.15  and the leasing of or the granting of a license to use or 
  1.16  consume tangible personal property other than manufactured homes 
  1.17  used for residential purposes for a continuous period of 30 days 
  1.18  or more, for a consideration in money or by exchange or barter; 
  1.19     (b) The production, fabrication, printing, or processing of 
  1.20  tangible personal property for a consideration for consumers who 
  1.21  furnish either directly or indirectly the materials used in the 
  1.22  production, fabrication, printing, or processing; 
  1.23     (c) The furnishing, preparing, or serving for a 
  1.24  consideration of food, meals, or drinks.  "Sale" does not 
  1.25  include: 
  1.26     (1) meals or drinks served to patients, inmates, or persons 
  2.1   residing at hospitals, sanitariums, nursing homes, senior 
  2.2   citizens homes, and correctional, detention, and detoxification 
  2.3   facilities; 
  2.4      (2) meals or drinks purchased for and served exclusively to 
  2.5   individuals who are 60 years of age or over and their spouses or 
  2.6   to the handicapped and their spouses by governmental agencies, 
  2.7   nonprofit organizations, agencies, or churches or pursuant to 
  2.8   any program funded in whole or part through 42 USCA sections 
  2.9   3001 through 3045, wherever delivered, prepared or served; or 
  2.10     (3) meals and lunches served at public and private schools, 
  2.11  universities, or colleges.  Notwithstanding section 297A.25, 
  2.12  subdivision 2, taxable food or meals include, but are not 
  2.13  limited to, the following:  
  2.14     (i) heated food or drinks; 
  2.15     (ii) sandwiches prepared by the retailer; 
  2.16     (iii) single sales of prepackaged ice cream or ice milk 
  2.17  novelties prepared by the retailer; 
  2.18     (iv) hand-prepared or dispensed ice cream or ice milk 
  2.19  products including cones, sundaes, and snow cones; 
  2.20     (v) soft drinks and other beverages prepared or served by 
  2.21  the retailer; 
  2.22     (vi) gum; 
  2.23     (vii) ice; 
  2.24     (viii) all food sold in vending machines; 
  2.25     (ix) party trays prepared by the retailers; and 
  2.26     (x) all meals and single servings of packaged snack food, 
  2.27  single cans or bottles of pop, sold in restaurants and bars; 
  2.28     (d) The granting of the privilege of admission to places of 
  2.29  amusement, recreational areas, or athletic events, except a 
  2.30  world championship football game sponsored by the national 
  2.31  football league, and the privilege of having access to and the 
  2.32  use of amusement devices, tanning facilities, reducing salons, 
  2.33  steam baths, turkish baths, health clubs, and spas or athletic 
  2.34  facilities; 
  2.35     (e) The furnishing for a consideration of lodging and 
  2.36  related services by a hotel, rooming house, tourist court, motel 
  3.1   or trailer camp and of the granting of any similar license to 
  3.2   use real property other than the renting or leasing thereof for 
  3.3   a continuous period of 30 days or more; 
  3.4      (f) The furnishing for a consideration of electricity, gas, 
  3.5   water, or steam for use or consumption within this state, or 
  3.6   local exchange telephone service, intrastate toll service, and 
  3.7   interstate toll service, if that service originates from and is 
  3.8   charged to a telephone located in this state.  Telephone service 
  3.9   includes paging services and private communication service, as 
  3.10  defined in United States Code, title 26, section 4252(d), except 
  3.11  for private communication service purchased by an agent acting 
  3.12  on behalf of the state lottery.  The furnishing for a 
  3.13  consideration of access to telephone services by a hotel to its 
  3.14  guests is a sale under this clause.  Sales by municipal 
  3.15  corporations in a proprietary capacity are included in the 
  3.16  provisions of this clause.  The furnishing of water and sewer 
  3.17  services for residential use shall not be considered a sale.  
  3.18  The sale of natural gas to be used as a fuel in vehicles 
  3.19  propelled by natural gas shall not be considered a sale for the 
  3.20  purposes of this section; 
  3.21     (g) The furnishing for a consideration of cable television 
  3.22  services, including charges for basic service, charges for 
  3.23  premium service, and any other charges for any other 
  3.24  pay-per-view, monthly, or similar television services; 
  3.25     (h) Notwithstanding section 297A.25, subdivisions 9 and 12, 
  3.26  the sales of racehorses including claiming sales and fees paid 
  3.27  for breeding racehorses or horses previously used for racing 
  3.28  shall be considered a "sale" and a "purchase."  "Racehorse" 
  3.29  means a horse that is or is intended to be used for racing and 
  3.30  whose birth has been recorded by the Jockey Club or the United 
  3.31  States Trotting Association or the American Quarter Horse 
  3.32  Association.  "Sale" does not include fees paid for breeding 
  3.33  horses that are not racehorses; 
  3.34     (i) The furnishing for a consideration of parking services, 
  3.35  whether on a contractual, hourly, or other periodic basis, 
  3.36  except for parking at a meter; 
  4.1      (j) The furnishing for a consideration of services listed 
  4.2   in this paragraph: 
  4.3      (i) laundry and dry cleaning services including cleaning, 
  4.4   pressing, repairing, altering, and storing clothes, linen 
  4.5   services and supply, cleaning and blocking hats, and carpet, 
  4.6   drapery, upholstery, and industrial cleaning.  Laundry and dry 
  4.7   cleaning services do not include services provided by coin 
  4.8   operated facilities operated by the customer; 
  4.9      (ii) motor vehicle washing, waxing, and cleaning services, 
  4.10  including services provided by coin-operated facilities operated 
  4.11  by the customer, and rustproofing, undercoating, and towing of 
  4.12  motor vehicles; 
  4.13     (iii) building and residential cleaning, maintenance, and 
  4.14  disinfecting and exterminating services; 
  4.15     (iv) services provided by detective agencies, security 
  4.16  services, burglar, fire alarm, and armored car services not 
  4.17  including services performed within the jurisdiction they serve 
  4.18  by off-duty licensed peace officers as defined in section 
  4.19  626.84, subdivision 1; 
  4.20     (v) pet grooming services; 
  4.21     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
  4.22  services; garden planting and maintenance; tree, bush, and shrub 
  4.23  pruning, bracing, spraying, and surgery; tree, bush, shrub and 
  4.24  stump removal; and tree trimming for public utility lines.  
  4.25  Services performed under a construction contract for the 
  4.26  installation of shrubbery, plants, sod, trees, bushes, and 
  4.27  similar items are not taxable; 
  4.28     (vii) mixed municipal solid waste collection and disposal 
  4.29  management services as described in section 297A.45; 
  4.30     (viii) massages, except when provided by a licensed health 
  4.31  care facility or professional or upon written referral from a 
  4.32  licensed health care facility or professional for treatment of 
  4.33  illness, injury, or disease; and 
  4.34     (ix) the furnishing for consideration of lodging, board and 
  4.35  care services for animals in kennels and other similar 
  4.36  arrangements, but excluding veterinary and horse boarding 
  5.1   services. 
  5.2   The services listed in this paragraph are taxable under section 
  5.3   297A.02 if the service is performed wholly within Minnesota or 
  5.4   if the service is performed partly within and partly without 
  5.5   Minnesota and the greater proportion of the service is performed 
  5.6   in Minnesota, based on the cost of performance.  In applying the 
  5.7   provisions of this chapter, the terms "tangible personal 
  5.8   property" and "sales at retail" include taxable services and the 
  5.9   provision of taxable services, unless specifically provided 
  5.10  otherwise.  Services performed by an employee for an employer 
  5.11  are not taxable under this paragraph.  Services performed by a 
  5.12  partnership or association for another partnership or 
  5.13  association are not taxable under this paragraph if one of the 
  5.14  entities owns or controls more than 80 percent of the voting 
  5.15  power of the equity interest in the other entity.  Services 
  5.16  performed between members of an affiliated group of corporations 
  5.17  are not taxable.  For purposes of this section, "affiliated 
  5.18  group of corporations" includes those entities that would be 
  5.19  classified as a member of an affiliated group under United 
  5.20  States Code, title 26, section 1504, and who are eligible to 
  5.21  file a consolidated tax return for federal income tax purposes; 
  5.22     (k) A "sale" and a "purchase" includes the transfer of 
  5.23  computer software, meaning information and directions that 
  5.24  dictate the function performed by data processing equipment.  A 
  5.25  "sale" and a "purchase" does not include the design, 
  5.26  development, writing, translation, fabrication, lease, or 
  5.27  transfer for a consideration of title or possession of a custom 
  5.28  computer program; and 
  5.29     (l) The granting of membership in a club, association, or 
  5.30  other organization if: 
  5.31     (1) the club, association, or other organization makes 
  5.32  available for the use of its members sports and athletic 
  5.33  facilities (without regard to whether a separate charge is 
  5.34  assessed for use of the facilities); and 
  5.35     (2) use of the sports and athletic facilities is not made 
  5.36  available to the general public on the same basis as it is made 
  6.1   available to members.  
  6.2   Granting of membership includes both one-time initiation fees 
  6.3   and periodic membership dues.  Sports and athletic facilities 
  6.4   include golf courses, tennis, racquetball, handball and squash 
  6.5   courts, basketball and volleyball facilities, running tracks, 
  6.6   exercise equipment, swimming pools, and other similar athletic 
  6.7   or sports facilities.  The provisions of this paragraph do not 
  6.8   apply to camps or other recreation facilities owned and operated 
  6.9   by an exempt organization under section 501(c)(3) of the 
  6.10  Internal Revenue Code of 1986, as amended through December 31, 
  6.11  1992, for educational and social activities for young people 
  6.12  primarily age 18 and under.  
  6.13     Sec. 2.  Minnesota Statutes 1994, section 297A.01, is 
  6.14  amended by adding a subdivision to read: 
  6.15     Subd. 21.  [MIXED MUNICIPAL SOLID WASTE MANAGEMENT 
  6.16  SERVICES.] "Mixed municipal solid waste management services" or 
  6.17  "waste management services" means services relating to the 
  6.18  management of mixed municipal solid waste from collection to 
  6.19  disposal, including transportation and management at waste 
  6.20  facilities.  The definitions in section 115A.03 apply to this 
  6.21  subdivision. 
  6.22     Sec. 3.  Minnesota Statutes 1994, section 297A.25, 
  6.23  subdivision 11, is amended to read: 
  6.24     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
  6.25  all sales, including sales in which title is retained by a 
  6.26  seller or a vendor or is assigned to a third party under an 
  6.27  installment sale or lease purchase agreement under section 
  6.28  465.71, of tangible personal property to, and all storage, use 
  6.29  or consumption of such property by, the United States and its 
  6.30  agencies and instrumentalities, the University of Minnesota, 
  6.31  state universities, community colleges, technical colleges, 
  6.32  state academies, the Minnesota center for arts education, and 
  6.33  school districts are exempt. 
  6.34     As used in this subdivision, "school districts" means 
  6.35  public school entities and districts of every kind and nature 
  6.36  organized under the laws of the state of Minnesota, including, 
  7.1   without limitation, school districts, intermediate school 
  7.2   districts, education districts, educational cooperative service 
  7.3   units, secondary vocational cooperative centers, special 
  7.4   education cooperatives, joint purchasing cooperatives, 
  7.5   telecommunication cooperatives, regional management information 
  7.6   centers, technical colleges, joint vocational technical 
  7.7   districts, and any instrumentality of a school district, as 
  7.8   defined in section 471.59. 
  7.9      Sales exempted by this subdivision include sales under 
  7.10  section 297A.01, subdivision 3, paragraph (f), but do not 
  7.11  include sales under section 297A.01, subdivision 3, paragraph 
  7.12  (j), clause (vii).  
  7.13     Sales to hospitals and nursing homes owned and operated by 
  7.14  political subdivisions of the state are exempt under this 
  7.15  subdivision.  
  7.16     The sales to and exclusively for the use of libraries of 
  7.17  books, periodicals, audio-visual materials and equipment, 
  7.18  photocopiers for use by the public, and all cataloging and 
  7.19  circulation equipment, and cataloging and circulation software 
  7.20  for library use are exempt under this subdivision.  For purposes 
  7.21  of this paragraph "libraries" means libraries as defined in 
  7.22  section 134.001, county law libraries under chapter 134A, the 
  7.23  state library under section 480.09, and the legislative 
  7.24  reference library. 
  7.25     Sales of supplies and equipment used in the operation of an 
  7.26  ambulance service owned and operated by a political subdivision 
  7.27  of the state are exempt under this subdivision provided that the 
  7.28  supplies and equipment are used in the course of providing 
  7.29  medical care.  Sales to a political subdivision of repair and 
  7.30  replacement parts for emergency rescue vehicles and fire trucks 
  7.31  and apparatus are exempt under this subdivision.  
  7.32     Sales to a political subdivision of machinery and 
  7.33  equipment, except for motor vehicles, used directly for mixed 
  7.34  municipal solid waste collection and disposal management 
  7.35  services at a solid waste disposal facility as defined in 
  7.36  section 115A.03, subdivision 10, are exempt under this 
  8.1   subdivision.  
  8.2      Sales to political subdivisions of chore and homemaking 
  8.3   services to be provided to elderly or disabled individuals are 
  8.4   exempt. 
  8.5      This exemption shall not apply to building, construction or 
  8.6   reconstruction materials purchased by a contractor or a 
  8.7   subcontractor as a part of a lump-sum contract or similar type 
  8.8   of contract with a guaranteed maximum price covering both labor 
  8.9   and materials for use in the construction, alteration, or repair 
  8.10  of a building or facility.  This exemption does not apply to 
  8.11  construction materials purchased by tax exempt entities or their 
  8.12  contractors to be used in constructing buildings or facilities 
  8.13  which will not be used principally by the tax exempt entities. 
  8.14     This exemption does not apply to the leasing of a motor 
  8.15  vehicle as defined in section 297B.01, subdivision 5, except for 
  8.16  leases entered into by the United States or its agencies or 
  8.17  instrumentalities.  
  8.18     The tax imposed on sales to political subdivisions of the 
  8.19  state under this section applies to all political subdivisions 
  8.20  other than those explicitly exempted under this subdivision, 
  8.21  notwithstanding section 115A.69, subdivision 6, 116A.25, 
  8.22  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
  8.23  469.127, 473.394, 473.448, 473.545, or 473.608 or any other law 
  8.24  to the contrary enacted before 1992. 
  8.25     Sales exempted by this subdivision include sales made to 
  8.26  other states or political subdivisions of other states, if the 
  8.27  sale would be exempt from taxation if it occurred in that state, 
  8.28  but do not include sales under section 297A.01, subdivision 3, 
  8.29  paragraphs (c) and (e). 
  8.30     Sec. 4.  Minnesota Statutes 1994, section 297A.45, is 
  8.31  amended to read: 
  8.32     297A.45 [MIXED MUNICIPAL SOLID WASTE COLLECTION AND 
  8.33  DISPOSAL MANAGEMENT SERVICES.] 
  8.34     Subdivision 1.  [DEFINITIONS.] The definitions in sections 
  8.35  115A.03 and 297A.01 apply to this section.  
  8.36     Subd. 2.  [APPLICATION.] The taxes imposed by sections 
  9.1   297A.02 and 297A.021 apply to all public and private mixed 
  9.2   municipal solid waste collection and disposal management 
  9.3   services.  
  9.4      Notwithstanding section 297A.25, subdivision 11, a 
  9.5   political subdivision that purchases collection or disposal 
  9.6   waste management services on behalf of its citizens shall pay 
  9.7   the taxes. 
  9.8      If a political subdivision provides collection or disposal 
  9.9   services a waste management service to its residents at a cost 
  9.10  in excess of the total direct charge to the residents for the 
  9.11  service, the political subdivision shall pay the taxes based 
  9.12  on its cost of providing the service in excess of the direct 
  9.13  charges.  
  9.14     A person who transports mixed municipal solid waste 
  9.15  generated by that person or by another person without 
  9.16  compensation shall pay the taxes at the disposal or resource 
  9.17  recovery waste facility based on the disposal charge or tipping 
  9.18  fee. 
  9.19     Subd. 3.  [EXEMPTIONS.] (a) The cost of a service or the 
  9.20  portion of a service to collect and manage recyclable materials 
  9.21  separated from mixed municipal solid waste by the waste 
  9.22  generator is exempt from the taxes imposed in sections 297A.02 
  9.23  and 297A.021. 
  9.24     (b) The amount of a surcharge or fee imposed under section 
  9.25  115A.919, 115A.921, 115A.923, or 473.843 is exempt from the 
  9.26  taxes imposed in sections 297A.02 and 297A.021. 
  9.27     (c) Waste from a recycling facility that separates or 
  9.28  processes recyclable materials and that reduces the volume of 
  9.29  the waste by at least 85 percent is exempt from the taxes 
  9.30  imposed in sections 297A.02 and 297A.021.  To qualify for the 
  9.31  exemption under this paragraph, the waste exempted must be 
  9.32  collected and disposed of managed separately from other solid 
  9.33  waste. 
  9.34     (d) The following costs are exempt from the taxes imposed 
  9.35  in sections 297A.02 and 297A.021: 
  9.36     (1) costs of providing educational materials and other 
 10.1   information to residents; 
 10.2      (2) costs of managing solid waste other than mixed 
 10.3   municipal solid waste, including household hazardous waste; and 
 10.4      (3) costs of regulatory and enforcement activities. 
 10.5      (e) The cost of a waste management service is exempt from 
 10.6   the taxes imposed in sections 297A.02 and 297A.021 to the extent 
 10.7   that the cost was previously subject to the tax. 
 10.8      Subd. 4.  [CITY SALES TAX MAY NOT BE IMPOSED.] 
 10.9   Notwithstanding any other law or charter provision to the 
 10.10  contrary, a home rule charter or statutory city that imposes a 
 10.11  general sales tax may not impose the sales tax on solid waste 
 10.12  disposal and collection management services that are subject to 
 10.13  the tax under this section.  This subdivision does not apply to 
 10.14  a tax imposed under section 297A.021.  
 10.15     Subd. 5.  [SEPARATE ACCOUNTING.] The commissioner shall 
 10.16  account for revenue collected from public and private mixed 
 10.17  municipal solid waste collection and disposal management 
 10.18  services under this section separately from other tax revenue 
 10.19  collected under this chapter.  
 10.20     Sec. 5.  [EFFECTIVE DATE.] 
 10.21     Sections 1 to 4 are effective the day following final 
 10.22  enactment.