SF 2050

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 11:33pm

A bill for an act
relating to taxation; exempting certain cities from sales tax on their purchases;
amending Minnesota Statutes 2008, section 297A.70, subdivision 2.

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

Section 1.

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) 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; deleted text begin and
deleted text end

(6) 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 new text begin ; and
new text end

new text begin (7) eligible cities, as determined under this clause. A city that received local
government aid under chapter 477A in 1992 is eligible for exemption in any calendar
year that the commissioner of revenue certifies under section 477A.014 that the city will
receive no local government aid under section 477A.013 for that year. A city is also
eligible if it notifies the commissioner of revenue by June 1 of the year prior to the aid
distribution year that it chooses to forgo any distribution under section 477A.013 for that
aid distribution year. Aid amounts forgone under this clause must be redistributed among
other cities that qualify for aid under section 477A.013 new text end .

(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; or

(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.

(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 after December 31, 2009.
new text end