SF 912

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:17am

A bill for an act
relating to taxation; sales and use; eliminating sales tax on local government
purchases; amending Minnesota Statutes 2008, section 297A.70, subdivisions 1,
2, 3.

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

Section 1.

Minnesota Statutes 2008, section 297A.70, subdivision 1, is amended to
read:

Subdivision 1.

Scope.

(a) To the extent provided in this section, the gross receipts
from sales of items to or by, and storage, distribution, use, or consumption of items by
the organizations new text begin or units of government new text end listed in this section are specifically exempted
from the taxes imposed by this chapter.

(b) Notwithstanding any law to the contrary enacted before 1992, only sales to
governments and political subdivisions listed in this section are exempt from the taxes
imposed by this chapter.

(c) "Sales" includes purchases under an installment contract or lease purchase
agreement under section 465.71.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2009.
new text end

Sec. 2.

Minnesota Statutes 2008, 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, 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) deleted text begin 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 deleted text end new text begin all political subdivisions of the state new text end ;

deleted text begin (4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end other states or political subdivisions of other states, if the sale would be
exempt from taxation if it occurred in that state; and

deleted text begin (6) deleted text end new text begin (5) new text end sales to 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; new text begin and
new text end

(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 deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (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; or
deleted text end

deleted text begin (4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, and soft drinks, except for lodging, prepared food, candy,
and soft drinks purchased directly by the United States or its agencies or instrumentalities.
deleted 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2009.
new text end

Sec. 3.

Minnesota Statutes 2008, section 297A.70, subdivision 3, is amended to read:

Subd. 3.

Sales of certain goods and services to government.

(a) The following
sales to or use by the specified governments and political subdivisions of the state are
exempt:

deleted text begin (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and
fire apparatus to a political subdivision;
deleted text end

deleted text begin (2) machinery and equipment, except for motor vehicles, used directly for mixed
municipal solid waste management services at a solid waste disposal facility as defined in
section 115A.03, subdivision 10;
deleted text end

deleted text begin (3) chore and homemaking services to a political subdivision of the state to be
provided to elderly or disabled individuals;
deleted text end

deleted text begin (4) deleted text end new text begin (1) new text end telephone services to the Office of Enterprise Technology that are used to
provide telecommunications services through the enterprise technology revolving fund;

deleted text begin (5) deleted text end new text begin (2) new text end firefighter personal protective equipment as defined in paragraph (b), if
purchased or authorized by and for the use of an organized fire department, fire protection
district, or fire company regularly charged with the responsibility of providing fire
protection to the state or a political subdivision;

deleted text begin (6) deleted text end new text begin (3) new text end bullet-resistant body armor that provides the wearer with ballistic and trauma
protection, if purchased by a law enforcement agency of the state deleted text begin or a political subdivision
of the state, deleted text end or a licensed peace officer, as defined in section 626.84, subdivision 1;

deleted text begin (7) motor vehicles purchased or leased by political subdivisions of the state if the
vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b),
exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax
under section 297B.03, clause (12);
deleted text end

deleted text begin (8) equipment designed to process, dewater, and recycle biosolids for wastewater
treatment facilities of political subdivisions, and materials incidental to installation of
that equipment;
deleted text end

deleted text begin (9) sales to a town of gravel and of machinery, equipment, and accessories, except
motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of
motor vehicles exempt from tax under section 297B.03, clause (10);
deleted text end

deleted text begin (10) deleted text end new text begin (4) new text end the removal of trees, bushes, or shrubs for the construction and maintenance
of roads, trails, or firebreaks when purchased by an agency of the state or a political
subdivision of the state; and

deleted text begin (11) deleted text end new text begin (5) new text end purchases by deleted text begin the Metropolitan Council or deleted text end the Department of Transportation
of vehicles and repair parts to equip operations provided for in section 174.90, including,
but not limited to, the Northstar Corridor Rail project.

(b) For purposes of this subdivision, "firefighters personal protective equipment"
means helmets, including face shields, chin straps, and neck liners; bunker coats and
pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
personal alert safety systems; spanner belts; optical or thermal imaging search devices;
and all safety equipment required by the Occupational Safety and Health Administration.

(c) For purchases of items listed in paragraph (a), clause (11), the tax must be
imposed and collected as if the rate under section 297A.62, subdivision 1, applied and
then refunded in the manner provided in section 297A.75.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2009.
new text end