SF 2361

as introduced - 87th Legislature (2011 - 2012) Posted on 03/13/2012 10:54am

A bill for an act
relating to sales tax on motor vehicles; limiting and eliminating exemptions;
changing in lieu tax for collector vehicles; making conforming changes;
amending Minnesota Statutes 2010, sections 297B.01, subdivisions 14, 16;
297B.02, subdivision 3; Minnesota Statutes 2011 Supplement, sections 297A.70,
subdivision 3; 297B.03.

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

Section 1.

Minnesota Statutes 2011 Supplement, 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:

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

(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;

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

(4) telephone services to the Office of Enterprise Technology that are used to provide
telecommunications services through the enterprise technology revolving fund;

(5) 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;

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

(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 deleted text begin (12) deleted text end new text begin (11) new text end ;

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

(9) 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;

(10) purchases by the Metropolitan Council or 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; and

(11) purchases of water used directly in providing public safety services by 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.

(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.

Sec. 2.

Minnesota Statutes 2010, section 297B.01, subdivision 14, is amended to read:

Subd. 14.

Purchase price.

(a) "Purchase price" means the total consideration
valued in money for a sale, whether paid in money or otherwise. The purchase price
excludes the amount of a manufacturer's rebate paid or payable to the purchaser. If a motor
vehicle is taken in trade as a credit or as part payment on a motor vehicle taxable under
this chapter, the credit or trade-in value allowed by the person selling the motor vehicle
shall be deducted from the total selling price to establish the purchase price of the vehicle
being sold and the trade-in allowance allowed by the seller shall constitute the purchase
price of the motor vehicle accepted as a trade-in. The purchase price in those instances
where the motor vehicle is acquired by gift or by any other transfer for a nominal or no
monetary consideration shall also include the average value of similar motor vehicles,
established by standards and guides as determined by the motor vehicle registrar. The
purchase price in those instances where a motor vehicle is manufactured by a person who
registers it under the laws of this state shall mean the manufactured cost of such motor
vehicle and manufactured cost shall mean the amount expended for materials, labor,
and other properly allocable costs of manufacture, except that in the absence of actual
expenditures for the manufacture of a part or all of the motor vehicle, manufactured costs
shall mean the reasonable value of the completed motor vehicle.

(b) The term "purchase price" shall not include the portion of the value of a motor
vehicle due solely to modifications necessary to make the motor vehicle disability
accessible.

(c) The term "purchase price" shall not include the transfer of a motor vehicle by
way of gift between a husband and wife or parent and child, or to a nonprofit organization
as provided under subdivision 16, paragraph (c), clause deleted text begin (5) deleted text end new text begin (6) new text end , nor shall it include
the transfer of a motor vehicle by a guardian to a ward when there is no monetary
consideration and the title to such vehicle was registered in the name of the guardian, as
guardian, only because the ward was a minor.

(d) The term "purchase price" shall not include the transfer of a motor vehicle as a
gift between a foster parent and foster child. For purposes of this subdivision, a foster
relationship exists, regardless of the age of the child, if (1) a foster parent's home is or was
licensed as a foster family home under Minnesota Rules, parts 9545.0010 to 9545.0260,
and (2) the county verifies that the child was a state ward or in permanent foster care.

(e) There shall not be included in "purchase price" the amount of any tax imposed by
the United States upon or with respect to retail sales whether imposed upon the retailer or
the consumer.

Sec. 3.

Minnesota Statutes 2010, section 297B.01, subdivision 16, is amended to read:

Subd. 16.

Sale, sells, selling, purchase, purchased, or acquired.

(a) "Sale,"
"sells," "selling," "purchase," "purchased," or "acquired" means any transfer of title of any
motor vehicle, whether absolutely or conditionally, for a consideration in money or by
exchange or barter for any purpose other than resale in the regular course of business.

(b) Any motor vehicle utilized by the owner only by leasing such vehicle to others
or by holding it in an effort to so lease it, and which is put to no other use by the owner
other than resale after such lease or effort to lease, shall be considered property purchased
for resale.

(c) The terms also shall include any transfer of title or ownership of a motor vehicle
by other means, for or without consideration, except that these terms shall not include:

(1) the acquisition of a motor vehicle by inheritance from or by bequest of, a
decedent who owned it;

(2) the transfer of a motor vehicle which was previously licensed in the names of
two or more joint tenants and subsequently transferred without monetary consideration to
one or more of the joint tenants;

(3) the transfer of a motor vehicle by way of deleted text begin gift between individuals, or deleted text end gift
from a limited used vehicle dealer licensed under section 168.27, subdivision 4a, to an
individual, when the transfer is with no monetary or other consideration or expectation
of consideration and the parties to the transfer submit an affidavit to that effect at the
time the title transfer is recorded;

(4) new text begin the transfer of a motor vehicle by gift between spouses or between parent and
child;
new text end

new text begin (5) new text end the voluntary or involuntary transfer of a motor vehicle between a husband and
wife in a divorce proceeding; or

deleted text begin (5) deleted text end new text begin (6) new text end the transfer of a motor vehicle by way of a gift to an organization that is
exempt from federal income taxation under section 501(c)(3) of the Internal Revenue
Code when the motor vehicle will be used exclusively for religious, charitable, or
educational purposes.

Sec. 4.

Minnesota Statutes 2010, section 297B.02, subdivision 3, is amended to read:

Subd. 3.

In lieu tax for collector vehicle.

In lieu of the tax imposed in subdivision
1, there is imposed a tax of deleted text begin $90 deleted text end new text begin $150 new text end on the purchase price of a passenger automobile or a
fire truck described in section 297B.025, subdivision 2.

Sec. 5.

Minnesota Statutes 2011 Supplement, section 297B.03, is amended to read:

297B.03 EXEMPTIONS.

There is specifically exempted from the provisions of this chapter and from
computation of the amount of tax imposed by it the following:

(1) purchase or use, including use under a lease purchase agreement or installment
sales contract made pursuant to section 465.71, of any motor vehicle by the United States
and its agencies and instrumentalities and by any person described in and subject to the
conditions provided in section 297A.67, subdivision 11;

deleted text begin (2) purchase or use of any motor vehicle by any person who was a resident of
another state or country at the time of the purchase and who subsequently becomes a
resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
such person began residing in the state of Minnesota and the motor vehicle was registered
in the person's name in the other state or country;
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end purchase or use of any motor vehicle by any person making a valid election
to be taxed under the provisions of section 297A.90;

deleted text begin (4) deleted text end new text begin (3) new text end purchase or use of any motor vehicle previously registered in the state of
Minnesota when such transfer constitutes a transfer within the meaning of section 118,
331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
Revenue Code;

deleted text begin (5) deleted text end new text begin (4) new text end purchase or use of any vehicle owned by a resident of another state and
leased to a Minnesota-based private or for-hire carrier for regular use in the transportation
of persons or property in interstate commerce provided the vehicle is titled in the state
of the owner or secured party, and that state does not impose a sales tax or sales tax on
motor vehicles used in interstate commerce;

deleted text begin (6) deleted text end new text begin (5) new text end purchase or use of a motor vehicle by a private nonprofit or public educational
institution for use as an instructional aid in automotive training programs operated by the
institution. "Automotive training programs" includes motor vehicle body and mechanical
repair courses but does not include driver education programs;

deleted text begin (7) deleted text end new text begin (6) new text end purchase of a motor vehicle by an ambulance service licensed under section
144E.10 when that vehicle is equipped and specifically intended for emergency response
or for providing ambulance service;

deleted text begin (8) deleted text end new text begin (7) new text end purchase of a motor vehicle by or for a public library, as defined in section
134.001, subdivision 2, as a bookmobile or library delivery vehicle;

deleted text begin (9) deleted text end new text begin (8) new text end purchase of a ready-mixed concrete truck;

deleted text begin (10) deleted text end new text begin (9) new text end purchase or use of a motor vehicle by a town for use exclusively for road
maintenance, including snowplows and dump trucks, but not including automobiles,
vans, or pickup trucks;

deleted text begin (11) deleted text end new text begin (10) new text end purchase or use of a motor vehicle by a corporation, society, association,
foundation, or institution organized and operated exclusively for charitable, religious,
or educational purposes, except a public school, university, or library, but only if the
vehicle is:

(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and
used for carrying more than nine persons including the driver; and

(ii) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose;

deleted text begin (12) deleted text end new text begin (11) new text end purchase of a motor vehicle for use by a transit provider exclusively to
provide transit service is exempt if the transit provider is either (i) receiving financial
assistance or reimbursement under section 174.24 or 473.384, or (ii) operating under
section 174.29, 473.388, or 473.405;

deleted text begin (13) deleted text end new text begin (12) new text end purchase or use of a motor vehicle by a qualified business, as defined
in section 469.310, located in a job opportunity building zone, if the motor vehicle is
principally garaged in the job opportunity building zone and is primarily used as part of or
in direct support of the person's operations carried on in the job opportunity building zone.
The exemption under this clause applies to sales, if the purchase was made and delivery
received during the duration of the job opportunity building zone. The exemption under
this clause also applies to any local sales and use tax; and

deleted text begin (14) deleted text end new text begin (13) new text end purchase of a leased vehicle by the lessee who was a participant in a
lease-to-own program from a charitable organization that is:

(i) described in section 501(c)(3) of the Internal Revenue Code; and

(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4.

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective July 1, 2012, and applies to transfers of title that occur on
and after that date.
new text end