HF 2532

as introduced - 88th Legislature (2013 - 2014) Posted on 02/27/2014 03:25pm

A bill for an act
relating to taxation; sales and use; modifying the sales tax exemption for units
of local government; appropriating money; amending Minnesota Statutes 2013
Supplement, section 297A.70, subdivision 2.

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

Section 1.

Minnesota Statutes 2013 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) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;

(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 deleted text begin goods and services
that are generally provided by a private business and the purchases would be taxable if
made by a private business engaged in the same activity deleted text end new text begin a liquor store, gas and electric
utility, golf course, marina, health and fitness center, campground, cafe, or laundromat new text end .

(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) As used in this subdivision, "local governments" means cities, counties, and
townships new text begin and their instrumentalities, including any special district as defined under
section 6.465, or any special district organized under a joint powers agreement under
section 471.59 new text end .

deleted text begin (e) As used in this subdivision, "goods or services generally provided by a private
business" include, but are not limited to, goods or services provided by liquor stores, gas
and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
and laundromats. "Goods or services generally provided by a private business" do not
include housing services, sewer and water services, wastewater treatment, ambulance and
other public safety services, correctional services, chore or homemaking services provided
to elderly or disabled individuals, or road and street maintenance or lighting.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2014,
and applies to sales and purchases made on or after that date.
new text end

Sec. 2. new text begin SALES TAX; TEMPORARY REFUND MECHANISM.
new text end

new text begin Notwithstanding the requirements in Minnesota Statutes, section 289A.50,
subdivision 2a, any local government that paid sales tax on items exempted under section
1 may apply directly to the commissioner of revenue for a refund under this section. This
provision applies only to sales made after December 31, 2013, and before July 1, 2014.
The application must be made on forms prescribed by the commissioner and filed before
January 1, 2015. The local government may make only one application for the entire
period. Interest on the refund must 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 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