HF 2387

as introduced - 89th Legislature (2015 - 2016) Posted on 04/14/2016 04:46pm

A bill for an act
relating to taxes; sales and use; accelerating the effective date for certain
exemptions for local governments; amending Minnesota Statutes 2015
Supplement, section 297A.70, subdivision 2.

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

Section 1.

Minnesota Statutes 2015 Supplement, 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, deleted text begin 2017 deleted text end new text begin 2016 new text end , local governments means statutory
or home rule charter cities, counties, and townships; and

(2) beginning January 1, deleted text begin 2017 deleted text end new text begin 2016 new text end , 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies retroactively for sales and purchases made after December 31, 2015. Local
governments impacted by this section may apply under section 2 for a refund of taxes
paid on exempt purchases.
new text end

Sec. 2. new text begin REFUNDS OF TAXES PAID; LOCAL GOVERNMENTS.
new text end

new text begin Special districts as defined under Minnesota Statutes, section 6.465; any
instrumentality of a statutory or home rule charter city, county, or township as defined in
Minnesota Statutes, section 471.59; and any joint powers board or organization created
under Minnesota Statutes, section 471.59, may apply directly to the commissioner of
revenue for a refund of taxes paid on purchases made after December 31, 2015, and before
January 1, 2016, that are exempt under Minnesota Statutes, section 297A.70, subdivision
2. Each entity may file only one application for a refund of all taxes paid during this time
period. The application must be in the form required by the commissioner and provide
sufficient information that the commissioner can verify the amount paid. Interest must be
paid on the refund at the rate in Minnesota Statutes, section 270C.405, from 90 days after
the refund claim is filed with the commissioner. The amount required to make the refunds
is annually appropriated to the commissioner.
new text end