SF 6

as introduced - 82nd Legislature, 2002 1st Special Session (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; income and sales; allowing the 
  1.3             deduction of charitable contributions in calculating 
  1.4             alternative minimum tax; clarifying the delivery of 
  1.5             aggregate materials and concrete block which is 
  1.6             taxable; amending Minnesota Statutes 2002, sections 
  1.7             290.091, subdivision 2; 297A.61, subdivision 3.  
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2002, section 290.091, 
  1.10  subdivision 2, is amended to read: 
  1.11     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
  1.12  this section, the following terms have the meanings given: 
  1.13     (a) "Alternative minimum taxable income" means the sum of 
  1.14  the following for the taxable year: 
  1.15     (1) the taxpayer's federal alternative minimum taxable 
  1.16  income as defined in section 55(b)(2) of the Internal Revenue 
  1.17  Code; 
  1.18     (2) the taxpayer's itemized deductions allowed in computing 
  1.19  federal alternative minimum taxable income, but excluding: 
  1.20     (i) an amount equal to 80 percent of the Minnesota 
  1.21  charitable contribution deduction under section 170 of the 
  1.22  Internal Revenue Code; 
  1.23     (ii) the medical expense deduction; 
  1.24     (iii) the casualty, theft, and disaster loss deduction; and 
  1.25     (iv) the impairment-related work expenses of a disabled 
  1.26  person; 
  2.1      (3) for depletion allowances computed under section 613A(c) 
  2.2   of the Internal Revenue Code, with respect to each property (as 
  2.3   defined in section 614 of the Internal Revenue Code), to the 
  2.4   extent not included in federal alternative minimum taxable 
  2.5   income, the excess of the deduction for depletion allowable 
  2.6   under section 611 of the Internal Revenue Code for the taxable 
  2.7   year over the adjusted basis of the property at the end of the 
  2.8   taxable year (determined without regard to the depletion 
  2.9   deduction for the taxable year); 
  2.10     (4) to the extent not included in federal alternative 
  2.11  minimum taxable income, the amount of the tax preference for 
  2.12  intangible drilling cost under section 57(a)(2) of the Internal 
  2.13  Revenue Code determined without regard to subparagraph (E); 
  2.14     (5) to the extent not included in federal alternative 
  2.15  minimum taxable income, the amount of interest income as 
  2.16  provided by section 290.01, subdivision 19a, clause (1); and 
  2.17     (6) the amount of addition required by section 290.01, 
  2.18  subdivision 19a, clause (7); 
  2.19     less the sum of the amounts determined under the following: 
  2.20     (1) interest income as defined in section 290.01, 
  2.21  subdivision 19b, clause (1); 
  2.22     (2) an overpayment of state income tax as provided by 
  2.23  section 290.01, subdivision 19b, clause (2), to the extent 
  2.24  included in federal alternative minimum taxable income; 
  2.25     (3) the amount of investment interest paid or accrued 
  2.26  within the taxable year on indebtedness to the extent that the 
  2.27  amount does not exceed net investment income, as defined in 
  2.28  section 163(d)(4) of the Internal Revenue Code.  Interest does 
  2.29  not include amounts deducted in computing federal adjusted gross 
  2.30  income; and 
  2.31     (4) amounts subtracted from federal taxable income as 
  2.32  provided by section 290.01, subdivision 19b, clause (12). 
  2.33     In the case of an estate or trust, alternative minimum 
  2.34  taxable income must be computed as provided in section 59(c) of 
  2.35  the Internal Revenue Code. 
  2.36     (b) "Investment interest" means investment interest as 
  3.1   defined in section 163(d)(3) of the Internal Revenue Code. 
  3.2      (c) "Tentative minimum tax" equals 6.4 percent of 
  3.3   alternative minimum taxable income after subtracting the 
  3.4   exemption amount determined under subdivision 3. 
  3.5      (d) "Regular tax" means the tax that would be imposed under 
  3.6   this chapter (without regard to this section and section 
  3.7   290.032), reduced by the sum of the nonrefundable credits 
  3.8   allowed under this chapter.  
  3.9      (e) "Net minimum tax" means the minimum tax imposed by this 
  3.10  section. 
  3.11     (f) "Minnesota charitable contribution deduction" means a 
  3.12  charitable contribution deduction under section 170 of the 
  3.13  Internal Revenue Code to or for the use of an entity described 
  3.14  in Minnesota Statutes 2000, section 290.21, subdivision 3, 
  3.15  clauses (a) to (e).  When the federal deduction for charitable 
  3.16  contributions is limited under section 170(b) of the Internal 
  3.17  Revenue Code, the allowable contributions in the year of 
  3.18  contribution are deemed to be first contributions to entities 
  3.19  described in Minnesota Statutes 2000, section 290.21, 
  3.20  subdivision 3, clauses (a) to (e). 
  3.21     [EFFECTIVE DATE.] This section is effective for taxable 
  3.22  years beginning after December 31, 2001. 
  3.23     Sec. 2.  Minnesota Statutes 2002, section 297A.61, 
  3.24  subdivision 3, is amended to read: 
  3.25     Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
  3.26  include, but are not limited to, each of the transactions listed 
  3.27  in this subdivision. 
  3.28     (b) Sale and purchase include: 
  3.29     (1) any transfer of title or possession, or both, of 
  3.30  tangible personal property, whether absolutely or conditionally, 
  3.31  for a consideration in money or by exchange or barter; and 
  3.32     (2) the leasing of or the granting of a license to use or 
  3.33  consume, for a consideration in money or by exchange or barter, 
  3.34  tangible personal property, other than a manufactured home used 
  3.35  for residential purposes for a continuous period of 30 days or 
  3.36  more. 
  4.1      (c) Sale and purchase include the production, fabrication, 
  4.2   printing, or processing of tangible personal property for a 
  4.3   consideration for consumers who furnish either directly or 
  4.4   indirectly the materials used in the production, fabrication, 
  4.5   printing, or processing. 
  4.6      (d) Sale and purchase include the preparing for a 
  4.7   consideration of food.  Notwithstanding section 297A.67, 
  4.8   subdivision 2, taxable food includes, but is not limited to, the 
  4.9   following: 
  4.10     (1) prepared food sold by the retailer; 
  4.11     (2) soft drinks; 
  4.12     (3) candy; and 
  4.13     (4) all food sold through vending machines. 
  4.14     (e) A sale and a purchase includes the furnishing for a 
  4.15  consideration of electricity, gas, water, or steam for use or 
  4.16  consumption within this state. 
  4.17     (f) A sale and a purchase includes the transfer for a 
  4.18  consideration of computer software.  
  4.19     (g) A sale and a purchase includes the furnishing for a 
  4.20  consideration of the following services: 
  4.21     (1) the privilege of admission to places of amusement, 
  4.22  recreational areas, or athletic events, and the making available 
  4.23  of amusement devices, tanning facilities, reducing salons, steam 
  4.24  baths, turkish baths, health clubs, and spas or athletic 
  4.25  facilities; 
  4.26     (2) lodging and related services by a hotel, rooming house, 
  4.27  resort, campground, motel, or trailer camp and the granting of 
  4.28  any similar license to use real property other than the renting 
  4.29  or leasing of it for a continuous period of 30 days or more; 
  4.30     (3) parking services, whether on a contractual, hourly, or 
  4.31  other periodic basis, except for parking at a meter; 
  4.32     (4) the granting of membership in a club, association, or 
  4.33  other organization if: 
  4.34     (i) the club, association, or other organization makes 
  4.35  available for the use of its members sports and athletic 
  4.36  facilities, without regard to whether a separate charge is 
  5.1   assessed for use of the facilities; and 
  5.2      (ii) use of the sports and athletic facility is not made 
  5.3   available to the general public on the same basis as it is made 
  5.4   available to members.  
  5.5   Granting of membership means both onetime initiation fees and 
  5.6   periodic membership dues.  Sports and athletic facilities 
  5.7   include golf courses; tennis, racquetball, handball, and squash 
  5.8   courts; basketball and volleyball facilities; running tracks; 
  5.9   exercise equipment; swimming pools; and other similar athletic 
  5.10  or sports facilities; 
  5.11     (5) delivery of aggregate materials and concrete block by a 
  5.12  third party if the delivery would be subject to the sales tax if 
  5.13  provided by the seller of the aggregate material or concrete 
  5.14  block; and 
  5.15     (6) services as provided in this clause: 
  5.16     (i) laundry and dry cleaning services including cleaning, 
  5.17  pressing, repairing, altering, and storing clothes, linen 
  5.18  services and supply, cleaning and blocking hats, and carpet, 
  5.19  drapery, upholstery, and industrial cleaning.  Laundry and dry 
  5.20  cleaning services do not include services provided by coin 
  5.21  operated facilities operated by the customer; 
  5.22     (ii) motor vehicle washing, waxing, and cleaning services, 
  5.23  including services provided by coin operated facilities operated 
  5.24  by the customer, and rustproofing, undercoating, and towing of 
  5.25  motor vehicles; 
  5.26     (iii) building and residential cleaning, maintenance, and 
  5.27  disinfecting and exterminating services; 
  5.28     (iv) detective, security, burglar, fire alarm, and armored 
  5.29  car services; but not including services performed within the 
  5.30  jurisdiction they serve by off-duty licensed peace officers as 
  5.31  defined in section 626.84, subdivision 1, or services provided 
  5.32  by a nonprofit organization for monitoring and electronic 
  5.33  surveillance of persons placed on in-home detention pursuant to 
  5.34  court order or under the direction of the Minnesota department 
  5.35  of corrections; 
  5.36     (v) pet grooming services; 
  6.1      (vi) lawn care, fertilizing, mowing, spraying and sprigging 
  6.2   services; garden planting and maintenance; tree, bush, and shrub 
  6.3   pruning, bracing, spraying, and surgery; indoor plant care; 
  6.4   tree, bush, shrub, and stump removal; and tree trimming for 
  6.5   public utility lines.  Services performed under a construction 
  6.6   contract for the installation of shrubbery, plants, sod, trees, 
  6.7   bushes, and similar items are not taxable; 
  6.8      (vii) massages, except when provided by a licensed health 
  6.9   care facility or professional or upon written referral from a 
  6.10  licensed health care facility or professional for treatment of 
  6.11  illness, injury, or disease; and 
  6.12     (viii) the furnishing of lodging, board, and care services 
  6.13  for animals in kennels and other similar arrangements, but 
  6.14  excluding veterinary and horse boarding services. 
  6.15     In applying the provisions of this chapter, the terms 
  6.16  "tangible personal property" and "sales at retail" include 
  6.17  taxable services and the provision of taxable services, unless 
  6.18  specifically provided otherwise.  Services performed by an 
  6.19  employee for an employer are not taxable.  Services performed by 
  6.20  a partnership or association for another partnership or 
  6.21  association are not taxable if one of the entities owns or 
  6.22  controls more than 80 percent of the voting power of the equity 
  6.23  interest in the other entity.  Services performed between 
  6.24  members of an affiliated group of corporations are not taxable.  
  6.25  For purposes of this section, "affiliated group of corporations" 
  6.26  includes those entities that would be classified as members of 
  6.27  an affiliated group under United States Code, title 26, section 
  6.28  1504, and that are eligible to file a consolidated tax return 
  6.29  for federal income tax purposes. 
  6.30     (h) A sale and a purchase includes the furnishing for a 
  6.31  consideration of tangible personal property or taxable services 
  6.32  by the United States or any of its agencies or 
  6.33  instrumentalities, or the state of Minnesota, its agencies, 
  6.34  instrumentalities, or political subdivisions. 
  6.35     (i) A sale and a purchase includes the furnishing for a 
  6.36  consideration of telecommunications services, including cable 
  7.1   television services and direct satellite services.  
  7.2   Telecommunications services are taxed to the extent allowed 
  7.3   under federal law if those services: 
  7.4      (1) either (i) originate and terminate in this state; or 
  7.5   (ii) originate in this state and terminate outside the state and 
  7.6   the service is charged to a telephone number customer located in 
  7.7   this state or to the account of any transmission instrument in 
  7.8   this state; or (iii) originate outside this state and terminate 
  7.9   in this state and the service is charged to a telephone number 
  7.10  customer located in this state or to the account of any 
  7.11  transmission instrument in this state; or 
  7.12     (2) are rendered by providing a private communications 
  7.13  service for which the customer has one or more locations within 
  7.14  Minnesota connected to the service and the service is charged to 
  7.15  a telephone number customer located in this state or to the 
  7.16  account of any transmission instrument in this state. 
  7.17     All charges for mobile telecommunications services, as 
  7.18  defined in United States Code, title 4, section 124, are deemed 
  7.19  to be provided by the customer's home service provider and 
  7.20  sourced to the customer's place of primary use and are subject 
  7.21  to tax based upon the customer's place of primary use in 
  7.22  accordance with the Mobile Telecommunications Sourcing Act, 
  7.23  United States Code, title 4, sections 116 to 126.  All other 
  7.24  definitions and provisions of the Mobile Telecommunications 
  7.25  Sourcing Act as provided in United States Code, title 4, are 
  7.26  hereby adopted. 
  7.27     (j) A sale and a purchase includes the furnishing for a 
  7.28  consideration of installation if the installation charges would 
  7.29  be subject to the sales tax if the installation were provided by 
  7.30  the seller of the item being installed. 
  7.31     [EFFECTIVE DATE.] This section is effective for sales made 
  7.32  after June 30, 2002, but shall not apply to sales made pursuant 
  7.33  to bona fide written contracts, nor to lump sum or fixed price 
  7.34  construction contracts which do not provide for allocation of 
  7.35  future taxes, if the contracts were enforceable prior to July 1, 
  7.36  2002, and the delivery of the aggregate materials or concrete 
  8.1   block is made on or before January 1, 2003.