SF 3084

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; reducing the passenger 
  1.3             automobile registration tax after the first year; 
  1.4             eliminating June accelerated payments for sales, 
  1.5             liquor, and cigarette and tobacco taxes; eliminating 
  1.6             the payment and refund requirements for sales of 
  1.7             exempt capital equipment; exempting sales to political 
  1.8             subdivisions of the state from the sales tax; 
  1.9             providing that certain sales of fruit and fruit 
  1.10            products, vegetables, and milk and milk products are 
  1.11            exempt from sales tax; appropriating money; amending 
  1.12            Minnesota Statutes 1998, sections 168.013, subdivision 
  1.13            1a; 297A.01, subdivision 3; 297A.2572; 297A.2573; 
  1.14            297A.47; and 297F.09, subdivisions 1 and 2; Minnesota 
  1.15            Statutes 1999 Supplement, sections 289A.18, 
  1.16            subdivision 4; 289A.20, subdivision 4; 289A.56, 
  1.17            subdivision 4; and 297A.25, subdivision 11; repealing 
  1.18            Minnesota Statutes 1998, sections 289A.60, subdivision 
  1.19            15; 297F.09, subdivision 6; and 297G.09, subdivision 
  1.20            5; Minnesota Statutes 1999 Supplement, section 
  1.21            297A.15, subdivision 5. 
  1.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.23     Section 1.  Minnesota Statutes 1998, section 168.013, 
  1.24  subdivision 1a, is amended to read: 
  1.25     Subd. 1a.  [PASSENGER AUTOMOBILE; HEARSE.] (a) On passenger 
  1.26  automobiles as defined in section 168.011, subdivision 7, and 
  1.27  hearses, except as otherwise provided, the tax shall be $10 plus 
  1.28  an additional tax equal to 1.25 percent of the base value.  
  1.29     (b) Subject to the classification provisions herein, "base 
  1.30  value" means the manufacturer's suggested retail price of the 
  1.31  vehicle including destination charge using list price 
  1.32  information published by the manufacturer or determined by the 
  1.33  registrar if no suggested retail price exists, and shall not 
  2.1   include the cost of each accessory or item of optional equipment 
  2.2   separately added to the vehicle and the suggested retail price. 
  2.3      (c) If the manufacturer's list price information contains a 
  2.4   single vehicle identification number followed by various 
  2.5   descriptions and suggested retail prices, the registrar shall 
  2.6   select from those listings only the lowest price for determining 
  2.7   base value. 
  2.8      (d) If unable to determine the base value because the 
  2.9   vehicle is specially constructed, or for any other reason, the 
  2.10  registrar may establish such value upon the cost price to the 
  2.11  purchaser or owner as evidenced by a certificate of cost but not 
  2.12  including Minnesota sales or use tax or any local sales or other 
  2.13  local tax. 
  2.14     (e) The registrar shall classify every vehicle in its 
  2.15  proper base value class as follows: 
  2.16                        FROM                   TO
  2.17                        $  0                $199.99
  2.18                         200                 399.99
  2.19  and thereafter a series of classes successively set in brackets 
  2.20  having a spread of $200 consisting of such number of classes as 
  2.21  will permit classification of all vehicles. 
  2.22     (f) The base value for purposes of this section shall be 
  2.23  the middle point between the extremes of its class. 
  2.24     (g) The registrar shall establish the base value, when new, 
  2.25  of every passenger automobile and hearse registered prior to the 
  2.26  effective date of Extra Session Laws 1971, chapter 31, using 
  2.27  list price information published by the manufacturer or any 
  2.28  nationally recognized firm or association compiling such data 
  2.29  for the automotive industry.  If unable to ascertain the base 
  2.30  value of any registered vehicle in the foregoing manner, the 
  2.31  registrar may use any other available source or method.  The tax 
  2.32  on all previously registered vehicles shall be computed upon the 
  2.33  base value thus determined taking into account the depreciation 
  2.34  provisions of paragraph (h). 
  2.35     (h) Except as provided in paragraph (i), the annual 
  2.36  additional tax computed upon the base value as provided herein, 
  3.1   during the first and second years of vehicle life shall be 
  3.2   computed upon 100 percent of the base value; for the third and 
  3.3   fourth years, 90 percent of such value; for the fifth and sixth 
  3.4   years, 75 percent of such value; for the seventh year, 60 
  3.5   percent of such value; for the eighth year, 40 percent of such 
  3.6   value; for the ninth year, 30 percent of such value; for the 
  3.7   tenth year, ten percent of such value; for the 11th and each 
  3.8   succeeding year, the sum of $25.  
  3.9      In no event shall the annual additional tax be less than 
  3.10  $25. 
  3.11     For registration of passenger automobiles, other than the 
  3.12  initial registration of a new passenger automobile, the annual 
  3.13  additional tax shall not exceed $65. 
  3.14     (i) The annual additional tax under paragraph (h) on a 
  3.15  motor vehicle on which the first annual tax was paid before 
  3.16  January 1, 1990, must not exceed the tax that was paid on that 
  3.17  vehicle the year before. 
  3.18     Sec. 2.  Minnesota Statutes 1999 Supplement, section 
  3.19  289A.18, subdivision 4, is amended to read: 
  3.20     Subd. 4.  [SALES AND USE TAX RETURNS.] (a) Sales and use 
  3.21  tax returns must be filed on or before the 20th day of the month 
  3.22  following the close of the preceding reporting period, except 
  3.23  that annual use tax returns provided for under section 289A.11, 
  3.24  subdivision 1, must be filed by April 15 following the close of 
  3.25  the calendar year, in the case of individuals.  Annual use tax 
  3.26  returns of businesses, including sole proprietorships, and 
  3.27  annual sales tax returns must be filed by February 5 following 
  3.28  the close of the calendar year.  
  3.29     (b) Except for the return for the June reporting period, 
  3.30  which is due on the following August 25, Returns filed by 
  3.31  retailers required to remit liabilities by means of funds 
  3.32  transfer under section 289A.20, subdivision 4, 
  3.33  paragraph (d) (b), are due on or before the 25th day of the 
  3.34  month following the close of the preceding reporting period.  
  3.35     (c) If a retailer has an average sales and use tax 
  3.36  liability, including local sales and use taxes administered by 
  4.1   the commissioner, equal to or less than $500 per month in any 
  4.2   quarter of a calendar year, and has substantially complied with 
  4.3   the tax laws during the preceding four calendar quarters, the 
  4.4   retailer may request authorization to file and pay the taxes 
  4.5   quarterly in subsequent calendar quarters.  The authorization 
  4.6   remains in effect during the period in which the retailer's 
  4.7   quarterly returns reflect sales and use tax liabilities of less 
  4.8   than $1,500 and there is continued compliance with state tax 
  4.9   laws. 
  4.10     (d) If a retailer has an average sales and use tax 
  4.11  liability, including local sales and use taxes administered by 
  4.12  the commissioner, equal to or less than $100 per month during a 
  4.13  calendar year, and has substantially complied with the tax laws 
  4.14  during that period, the retailer may request authorization to 
  4.15  file and pay the taxes annually in subsequent years.  The 
  4.16  authorization remains in effect during the period in which the 
  4.17  retailer's annual returns reflect sales and use tax liabilities 
  4.18  of less than $1,200 and there is continued compliance with state 
  4.19  tax laws. 
  4.20     (e) The commissioner may also grant quarterly or annual 
  4.21  filing and payment authorizations to retailers if the 
  4.22  commissioner concludes that the retailers' future tax 
  4.23  liabilities will be less than the monthly totals identified in 
  4.24  paragraphs (c) and (d).  An authorization granted under this 
  4.25  paragraph is subject to the same conditions as an authorization 
  4.26  granted under paragraphs (c) and (d). 
  4.27     (f) A taxpayer who is a materials supplier may report gross 
  4.28  receipts either on: 
  4.29     (1) the cash basis as the consideration is received; or 
  4.30     (2) the accrual basis as sales are made.  
  4.31  As used in this paragraph, "materials supplier" means a person 
  4.32  who provides materials for the improvement of real property; who 
  4.33  is primarily engaged in the sale of lumber and building 
  4.34  materials-related products to owners, contractors, 
  4.35  subcontractors, repairers, or consumers; who is authorized to 
  4.36  file a mechanics lien upon real property and improvements under 
  5.1   chapter 514; and who files with the commissioner an election to 
  5.2   file sales and use tax returns on the basis of this paragraph. 
  5.3      Sec. 3.  Minnesota Statutes 1999 Supplement, section 
  5.4   289A.20, subdivision 4, is amended to read: 
  5.5      Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
  5.6   chapter 297A are due and payable to the commissioner monthly on 
  5.7   or before the 20th day of the month following the month in which 
  5.8   the taxable event occurred, or following another reporting 
  5.9   period as the commissioner prescribes or as allowed under 
  5.10  section 289A.18, subdivision 4, paragraph (f), except that use 
  5.11  taxes due on an annual use tax return as provided under section 
  5.12  289A.11, subdivision 1, are payable by April 15 following the 
  5.13  close of the calendar year. 
  5.14     (b) A vendor having a liability of $120,000 or more during 
  5.15  a fiscal year ending June 30 must remit the June liability for 
  5.16  the next year in the following manner: 
  5.17     (1) Two business days before June 30 of the year, the 
  5.18  vendor must remit 75 percent of the estimated June liability to 
  5.19  the commissioner.  
  5.20     (2) On or before August 14 of the year, the vendor must pay 
  5.21  any additional amount of tax not remitted in June. 
  5.22     (c) A vendor having a liability of $120,000 or more during 
  5.23  a fiscal year ending June 30 must remit all liabilities in the 
  5.24  subsequent calendar year by means of a funds transfer as defined 
  5.25  in section 336.4A-104, paragraph (a).  The funds transfer 
  5.26  payment date, as defined in section 336.4A-401, must be on or 
  5.27  before the 14th day of the month following the month in which 
  5.28  the taxable event occurred, or on or before the 14th day of the 
  5.29  month following the month in which the sale is reported under 
  5.30  section 289A.18, subdivision 4, except for 75 percent of the 
  5.31  estimated June liability, which is due two business days before 
  5.32  June 30.  The remaining amount of the June liability is due on 
  5.33  August 14.  If the date the tax is due is not a funds transfer 
  5.34  business day, as defined in section 336.4A-105, paragraph (a), 
  5.35  clause (4), the payment date must be on or before the funds 
  5.36  transfer business day next following the date the tax is due. 
  6.1      (d) (c) If the vendor required to remit by electronic funds 
  6.2   transfer as provided in paragraph (c) (b) is unable due to 
  6.3   reasonable cause to determine the actual sales and use tax due 
  6.4   on or before the due date for payment, the vendor may remit an 
  6.5   estimate of the tax owed using one of the following options: 
  6.6      (1) 100 percent of the tax reported on the previous month's 
  6.7   sales and use tax return; 
  6.8      (2) 100 percent of the tax reported on the sales and use 
  6.9   tax return for the same month in the previous calendar year; or 
  6.10     (3) 95 percent of the actual tax due. 
  6.11     Any additional amount of tax that is not remitted on or 
  6.12  before the due date for payment, must be remitted with the 
  6.13  return.  If a vendor fails to remit the actual liability or does 
  6.14  not remit using one of the estimate options by the due date for 
  6.15  payment, the vendor must remit actual liability as provided in 
  6.16  paragraph (c) (b) in all subsequent periods.  This paragraph 
  6.17  does not apply to the June sales and use tax liability. 
  6.18     Sec. 4.  Minnesota Statutes 1999 Supplement, section 
  6.19  289A.56, subdivision 4, is amended to read: 
  6.20     Subd. 4.  [CAPITAL EQUIPMENT REFUNDS; REFUNDS TO 
  6.21  PURCHASERS.] Notwithstanding subdivision 3, for refunds payable 
  6.22  under section 297A.15, subdivision 5, interest is computed from 
  6.23  the date the refund claim is filed with the commissioner.  For 
  6.24  refunds payable under section 289A.50, subdivision 2a, interest 
  6.25  is computed from the 20th day of the month following the month 
  6.26  of the invoice date for the purchase which is the subject of the 
  6.27  refund, if the refund claim includes a detailed schedule of 
  6.28  purchases made during each of the periods in the claim.  If the 
  6.29  refund claim submitted does not contain a schedule reflecting 
  6.30  purchases made in each period, interest is computed from the 
  6.31  date the claim was filed. 
  6.32     Sec. 5.  Minnesota Statutes 1998, section 297A.01, 
  6.33  subdivision 3, is amended to read: 
  6.34     Subd. 3.  A "sale" and a "purchase" includes, but is not 
  6.35  limited to, each of the following transactions: 
  6.36     (a) Any transfer of title or possession, or both, of 
  7.1   tangible personal property, whether absolutely or conditionally, 
  7.2   and the leasing of or the granting of a license to use or 
  7.3   consume tangible personal property other than manufactured homes 
  7.4   used for residential purposes for a continuous period of 30 days 
  7.5   or more, for a consideration in money or by exchange or barter; 
  7.6      (b) The production, fabrication, printing, or processing of 
  7.7   tangible personal property for a consideration for consumers who 
  7.8   furnish either directly or indirectly the materials used in the 
  7.9   production, fabrication, printing, or processing; 
  7.10     (c) The furnishing, preparing, or serving for a 
  7.11  consideration of food, meals, or drinks.  "Sale" or "purchase" 
  7.12  does not include: 
  7.13     (1) meals or drinks served to patients, inmates, or persons 
  7.14  residing at hospitals, sanitariums, nursing homes, senior 
  7.15  citizens homes, and correctional, detention, and detoxification 
  7.16  facilities; 
  7.17     (2) meals or drinks purchased for and served exclusively to 
  7.18  individuals who are 60 years of age or over and their spouses or 
  7.19  to the handicapped and their spouses by governmental agencies, 
  7.20  nonprofit organizations, agencies, or churches or pursuant to 
  7.21  any program funded in whole or part through 42 USCA sections 
  7.22  3001 through 3045, wherever delivered, prepared or served; or 
  7.23     (3) meals and lunches served at public and private schools, 
  7.24  universities, or colleges. 
  7.25  Notwithstanding section 297A.25, subdivision 2, taxable food or 
  7.26  meals include, but are not limited to, the following:  
  7.27     (i) food or drinks sold by the retailer for immediate 
  7.28  consumption on the retailer's premises.  Food and drinks sold 
  7.29  within a building or grounds which require an admission charge 
  7.30  for entrance are presumed to be sold for consumption on the 
  7.31  premises; 
  7.32     (ii) food or drinks prepared by the retailer for immediate 
  7.33  consumption either on or off the retailer's premises.  For 
  7.34  purposes of this subdivision, "food or drinks prepared for 
  7.35  immediate consumption" includes any food product upon which an 
  7.36  act of preparation including, but not limited to, cooking, 
  8.1   mixing, sandwich making, blending, heating, or pouring has been 
  8.2   performed by the retailer so the food product may be immediately 
  8.3   consumed by the purchaser; 
  8.4      (iii) ice cream, ice milk, frozen yogurt products, or 
  8.5   frozen novelties sold in single or individual servings including 
  8.6   cones, sundaes, and snow cones.  For purposes of this 
  8.7   subdivision, "single or individual servings" does not include 
  8.8   products when sold in bulk containers or bulk packaging; 
  8.9      (iv) soft drinks and other beverages including all 
  8.10  carbonated and noncarbonated beverages or drinks sold in liquid 
  8.11  form except beverages or drinks which contain milk or milk 
  8.12  products, beverages or drinks containing 15 or more percent 
  8.13  fruit juice, and noncarbonated and noneffervescent bottled water 
  8.14  sold in individual containers of one-half gallon or more in 
  8.15  size; 
  8.16     (v) gum, candy, and candy products, except when sold for 
  8.17  fundraising purposes by a nonprofit organization that provides 
  8.18  educational and social activities primarily for young people 18 
  8.19  years of age and under; 
  8.20     (vi) ice; 
  8.21     (vii) all food sold from vending machines, except: 
  8.22     (A) beverages or drinks which contain milk or milk 
  8.23  products; 
  8.24     (B) beverages or drinks containing 15 or more percent fruit 
  8.25  juice; 
  8.26     (C) fresh fruit and canned fruit; 
  8.27     (D) vegetables; 
  8.28     (E) granola bars and fruit-filled breakfast bars; 
  8.29     (F) yogurt and pudding; and 
  8.30     (G) cheese and cottage cheese; 
  8.31     (viii) all food for immediate consumption sold from 
  8.32  concession stands and vehicles; 
  8.33     (ix) party trays; 
  8.34     (x) all meals and single servings of packaged snack food 
  8.35  sold in restaurants and bars; and 
  8.36     (xi) bakery products: 
  9.1      (A) prepared by the retailer for consumption on the 
  9.2   retailer's premises; 
  9.3      (B) sold at a place that charges admission; 
  9.4      (C) sold from vending machines; or 
  9.5      (D) sold in single or individual servings from concession 
  9.6   stands, vehicles, bars, and restaurants.  For purposes of this 
  9.7   subdivision, "single or individual servings" does not include 
  9.8   products when sold in bulk containers or bulk packaging.  
  9.9      For purposes of this subdivision, "premises" means the 
  9.10  total space and facilities, including buildings, grounds, and 
  9.11  parking lots that are made available or that are available for 
  9.12  use by the retailer or customer for the purpose of sale or 
  9.13  consumption of prepared food and drinks.  The premises of a 
  9.14  caterer is the place where the catered food or drinks are 
  9.15  served; 
  9.16     (d) The granting of the privilege of admission to places of 
  9.17  amusement, recreational areas, or athletic events, except a 
  9.18  world championship football game sponsored by the national 
  9.19  football league, and the privilege of having access to and the 
  9.20  use of amusement devices, tanning facilities, reducing salons, 
  9.21  steam baths, turkish baths, health clubs, and spas or athletic 
  9.22  facilities; 
  9.23     (e) The furnishing for a consideration of lodging and 
  9.24  related services by a hotel, rooming house, tourist court, motel 
  9.25  or trailer camp and of the granting of any similar license to 
  9.26  use real property other than the renting or leasing thereof for 
  9.27  a continuous period of 30 days or more; 
  9.28     (f) The furnishing for a consideration of electricity, gas, 
  9.29  water, or steam for use or consumption within this state, or 
  9.30  local exchange telephone service, intrastate toll service, and 
  9.31  interstate toll service, if that service originates from and is 
  9.32  charged to a telephone located in this state.  Telephone service 
  9.33  does not include services purchased with prepaid telephone 
  9.34  calling cards.  Telephone service includes paging services and 
  9.35  private communication service, as defined in United States Code, 
  9.36  title 26, section 4252(d), as amended through December 31, 1991, 
 10.1   except for private communication service purchased by an agent 
 10.2   acting on behalf of the state lottery.  The furnishing for a 
 10.3   consideration of access to telephone services by a hotel to its 
 10.4   guests is a sale under this clause.  Sales by municipal 
 10.5   corporations in a proprietary capacity are included in the 
 10.6   provisions of this clause.  The furnishing of water and sewer 
 10.7   services for residential use shall not be considered a sale.  
 10.8   The sale of natural gas to be used as a fuel in vehicles 
 10.9   propelled by natural gas shall not be considered a sale for the 
 10.10  purposes of this section; 
 10.11     (g) The furnishing for a consideration of cable television 
 10.12  services, including charges for basic service, charges for 
 10.13  premium service, and any other charges for any other 
 10.14  pay-per-view, monthly, or similar television services; 
 10.15     (h) The furnishing for a consideration of parking services, 
 10.16  whether on a contractual, hourly, or other periodic basis, 
 10.17  except for parking at a meter; 
 10.18     (i) The furnishing for a consideration of services listed 
 10.19  in this paragraph: 
 10.20     (i) (1) laundry and dry cleaning services including 
 10.21  cleaning, pressing, repairing, altering, and storing clothes, 
 10.22  linen services and supply, cleaning and blocking hats, and 
 10.23  carpet, drapery, upholstery, and industrial cleaning.  Laundry 
 10.24  and dry cleaning services do not include services provided by 
 10.25  coin operated facilities operated by the customer; 
 10.26     (ii) (2) motor vehicle washing, waxing, and cleaning 
 10.27  services, including services provided by coin-operated 
 10.28  facilities operated by the customer, and rustproofing, 
 10.29  undercoating, and towing of motor vehicles; 
 10.30     (iii) (3) building and residential cleaning, maintenance, 
 10.31  and disinfecting and exterminating services; 
 10.32     (iv) (4) detective services, security services, burglar, 
 10.33  fire alarm, and armored car services; but not including services 
 10.34  performed within the jurisdiction they serve by off-duty 
 10.35  licensed peace officers as defined in section 626.84, 
 10.36  subdivision 1, or services provided by a nonprofit organization 
 11.1   for monitoring and electronic surveillance of persons placed on 
 11.2   in-home detention pursuant to court order or under the direction 
 11.3   of the Minnesota department of corrections; 
 11.4      (v) (5) pet grooming services; 
 11.5      (vi) (6) lawn care, fertilizing, mowing, spraying and 
 11.6   sprigging services; garden planting and maintenance; tree, bush, 
 11.7   and shrub pruning, bracing, spraying, and surgery; indoor plant 
 11.8   care; tree, bush, shrub and stump removal; and tree trimming for 
 11.9   public utility lines.  Services performed under a construction 
 11.10  contract for the installation of shrubbery, plants, sod, trees, 
 11.11  bushes, and similar items are not taxable; 
 11.12     (vii) (7) massages, except when provided by a licensed 
 11.13  health care facility or professional or upon written referral 
 11.14  from a licensed health care facility or professional for 
 11.15  treatment of illness, injury, or disease; and 
 11.16     (viii) (8) the furnishing for consideration of lodging, 
 11.17  board and care services for animals in kennels and other similar 
 11.18  arrangements, but excluding veterinary and horse boarding 
 11.19  services. 
 11.20  The services listed in this paragraph are taxable under section 
 11.21  297A.02 if the service is performed wholly within Minnesota or 
 11.22  if the service is performed partly within and partly without 
 11.23  Minnesota and the greater proportion of the service is performed 
 11.24  in Minnesota, based on the cost of performance.  In applying the 
 11.25  provisions of this chapter, the terms "tangible personal 
 11.26  property" and "sales at retail" include taxable services and the 
 11.27  provision of taxable services, unless specifically provided 
 11.28  otherwise.  Services performed by an employee for an employer 
 11.29  are not taxable under this paragraph.  Services performed by a 
 11.30  partnership or association for another partnership or 
 11.31  association are not taxable under this paragraph if one of the 
 11.32  entities owns or controls more than 80 percent of the voting 
 11.33  power of the equity interest in the other entity.  Services 
 11.34  performed between members of an affiliated group of corporations 
 11.35  are not taxable.  For purposes of this section, "affiliated 
 11.36  group of corporations" includes those entities that would be 
 12.1   classified as a member of an affiliated group under United 
 12.2   States Code, title 26, section 1504, as amended through December 
 12.3   31, 1987, and who are eligible to file a consolidated tax return 
 12.4   for federal income tax purposes; 
 12.5      (j) A "sale" and a "purchase" includes the transfer of 
 12.6   computer software, meaning information and directions that 
 12.7   dictate the function performed by data processing equipment.  A 
 12.8   "sale" and a "purchase" does not include the design, 
 12.9   development, writing, translation, fabrication, lease, or 
 12.10  transfer for a consideration of title or possession of a custom 
 12.11  computer program; and 
 12.12     (k) The granting of membership in a club, association, or 
 12.13  other organization if: 
 12.14     (1) the club, association, or other organization makes 
 12.15  available for the use of its members sports and athletic 
 12.16  facilities (without regard to whether a separate charge is 
 12.17  assessed for use of the facilities); and 
 12.18     (2) use of the sports and athletic facilities is not made 
 12.19  available to the general public on the same basis as it is made 
 12.20  available to members.  
 12.21  Granting of membership includes both one-time initiation fees 
 12.22  and periodic membership dues.  Sports and athletic facilities 
 12.23  include golf courses, tennis, racquetball, handball and squash 
 12.24  courts, basketball and volleyball facilities, running tracks, 
 12.25  exercise equipment, swimming pools, and other similar athletic 
 12.26  or sports facilities.  The provisions of this paragraph do not 
 12.27  apply to camps or other recreation facilities owned and operated 
 12.28  by an exempt organization under section 501(c)(3) of the 
 12.29  Internal Revenue Code of 1986, as amended through December 31, 
 12.30  1992, for educational and social activities for young people 
 12.31  primarily age 18 and under.  
 12.32     Sec. 6.  Minnesota Statutes 1999 Supplement, section 
 12.33  297A.25, subdivision 11, is amended to read: 
 12.34     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
 12.35  all sales, including sales in which title is retained by a 
 12.36  seller or a vendor or is assigned to a third party under an 
 13.1   installment sale or lease purchase agreement under section 
 13.2   465.71, of tangible personal property to, and all storage, use 
 13.3   or consumption of such property by, the following governmental 
 13.4   entities are exempt: 
 13.5      (1) the United States and its agencies and 
 13.6   instrumentalities,; 
 13.7      (2) the University of Minnesota, state universities, 
 13.8   community colleges, technical colleges, state academies, and the 
 13.9   Perpich center for arts education, an instrumentality of a 
 13.10  political subdivision that is accredited as an optional/special 
 13.11  function school by the North Central Association of Colleges and 
 13.12  Schools, school districts,; 
 13.13     (3) public libraries, public library systems, multicounty, 
 13.14  multitype library systems as defined in section 134.001, county 
 13.15  law libraries under chapter 134A, the state library under 
 13.16  section 480.09, and the legislative reference library are 
 13.17  exempt; and 
 13.18     (4) political subdivisions of a state and their agencies 
 13.19  and instrumentalities. 
 13.20     As used in this subdivision, "school districts" means 
 13.21  public school entities and districts of every kind and nature 
 13.22  organized under the laws of the state of Minnesota, including, 
 13.23  without limitation, school districts, intermediate school 
 13.24  districts, education districts, service cooperatives, secondary 
 13.25  vocational cooperative centers, special education cooperatives, 
 13.26  joint purchasing cooperatives, telecommunication cooperatives, 
 13.27  regional management information centers, and any instrumentality 
 13.28  of a school district, as defined in section 471.59. 
 13.29     Sales exempted by this subdivision include sales under 
 13.30  section 297A.01, subdivision 3, paragraph (f).  
 13.31     Sales to hospitals and nursing homes owned and operated by 
 13.32  political subdivisions of the state are exempt under this 
 13.33  subdivision.  
 13.34     Sales of supplies and equipment used in the operation of an 
 13.35  ambulance service owned and operated by a political subdivision 
 13.36  of the state are exempt under this subdivision provided that the 
 14.1   supplies and equipment are used in the course of providing 
 14.2   medical care.  Sales to a political subdivision of repair and 
 14.3   replacement parts for emergency rescue vehicles and fire trucks 
 14.4   and apparatus are exempt under this subdivision.  
 14.5      Sales to a political subdivision of machinery and 
 14.6   equipment, except for motor vehicles, used directly for mixed 
 14.7   municipal solid waste management services at a solid waste 
 14.8   disposal facility as defined in section 115A.03, subdivision 10, 
 14.9   are exempt under this subdivision.  
 14.10     Sales to political subdivisions of chore and homemaking 
 14.11  services to be provided to elderly or disabled individuals are 
 14.12  exempt. 
 14.13     Sales to a town of gravel and of machinery, equipment, and 
 14.14  accessories, except motor vehicles, used exclusively for road 
 14.15  and bridge maintenance, and leases of motor vehicles exempt from 
 14.16  tax under section 297B.03, clause (10), are exempt. 
 14.17     Sales of telephone services to the department of 
 14.18  administration that are used to provide telecommunications 
 14.19  services through the intertechnologies revolving fund are exempt 
 14.20  under this subdivision. 
 14.21     This exemption shall not apply to building, construction or 
 14.22  reconstruction materials purchased by a contractor or a 
 14.23  subcontractor as a part of a lump-sum contract or similar type 
 14.24  of contract with a guaranteed maximum price covering both labor 
 14.25  and materials for use in the construction, alteration, or repair 
 14.26  of a building or facility.  This exemption does not apply to 
 14.27  construction materials purchased by tax exempt entities or their 
 14.28  contractors to be used in constructing buildings or facilities 
 14.29  which will not be used principally by the tax exempt entities. 
 14.30     This exemption does not apply to the leasing of a motor 
 14.31  vehicle as defined in section 297B.01, subdivision 5, except for:
 14.32     (1) leases entered into by the United States or its 
 14.33  agencies or instrumentalities; and 
 14.34     (2) leases entered into by a political subdivision of motor 
 14.35  vehicles exempt from tax under chapter 297B.  
 14.36     The tax imposed on sales to political subdivisions of the 
 15.1   state under this section applies to all political subdivisions 
 15.2   other than those explicitly exempted under this subdivision, 
 15.3   notwithstanding section 115A.69, subdivision 6, 116A.25, 
 15.4   360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
 15.5   469.127, 473.448, 473.545, or 473.608 or any other law to the 
 15.6   contrary enacted before 1992. 
 15.7      Sales exempted by this subdivision include sales made to 
 15.8   other states or political subdivisions of other states, if the 
 15.9   sale would be exempt from taxation if it occurred in that state, 
 15.10  but do not include sales under section 297A.01, subdivision 3, 
 15.11  paragraphs (c) and (e). 
 15.12     Sec. 7.  Minnesota Statutes 1998, section 297A.2572, is 
 15.13  amended to read: 
 15.14     297A.2572 [AGRICULTURE PROCESSING FACILITY MATERIALS; 
 15.15  EXEMPTION.] 
 15.16     Purchases of construction materials and supplies are exempt 
 15.17  from the sales and use taxes imposed under this chapter, 
 15.18  regardless of whether purchased by the owner or a contractor, 
 15.19  subcontractor, or builder, if the materials and supplies are 
 15.20  used or consumed in constructing an agriculture processing 
 15.21  facility as defined in section 469.1811 in which the total 
 15.22  capital investment in the processing facility is expected to 
 15.23  exceed $100,000,000.  The tax shall be imposed and collected as 
 15.24  if the rate under section 297A.02, subdivision 1, applied, and 
 15.25  then refunded in the manner provided in Minnesota Statutes 1998, 
 15.26  section 297A.15, subdivision 5. 
 15.27     Sec. 8.  Minnesota Statutes 1998, section 297A.2573, is 
 15.28  amended to read: 
 15.29     297A.2573 [MINERAL PRODUCTION FACILITIES; EXEMPTION.] 
 15.30     Materials, equipment, and supplies used or consumed in 
 15.31  constructing, or incorporated into the construction of exempted 
 15.32  facilities as defined in this section are exempt from the taxes 
 15.33  imposed under this chapter and from any sales and use tax 
 15.34  imposed by a local unit of government, notwithstanding any 
 15.35  ordinance or city charter provision. 
 15.36     As used in this section, "exempted facilities" means: 
 16.1      (1) a value added iron products plant, which may be either 
 16.2   a new plant or a facility incorporated into an existing plant 
 16.3   that produces iron upgraded to a minimum of 75 percent iron 
 16.4   content or any iron alloy with a total minimum metallic content 
 16.5   of 90 percent; 
 16.6      (2) a facility used for the manufacture of fluxed taconite 
 16.7   pellets as defined in section 298.24; 
 16.8      (3) a new capital project that has a total cost of over 
 16.9   $40,000,000 that is directly related to production, cost, or 
 16.10  quality at an existing taconite facility that does not qualify 
 16.11  under clause (1) or (2); and 
 16.12     (4) a new mine or minerals processing plant for any mineral 
 16.13  subject to the net proceeds tax imposed under section 298.015. 
 16.14     The tax shall be imposed and collected as if the rate under 
 16.15  section 297A.02, subdivision 1, applied, and then refunded in 
 16.16  the manner provided in Minnesota Statutes 1998, section 297A.15, 
 16.17  subdivision 5. 
 16.18     Sec. 9.  Minnesota Statutes 1998, section 297A.47, is 
 16.19  amended to read: 
 16.20     297A.47 [REPORTING OF SALES TAX ON MINNESOTA GOVERNMENTS.] 
 16.21     The commissioner shall estimate the amount of revenues 
 16.22  derived from imposing the tax under this chapter and chapter 
 16.23  297B on state agencies and political subdivisions for each 
 16.24  fiscal year and shall report this amount to the commissioner of 
 16.25  finance before the time for filing reports for the fiscal year 
 16.26  with the United States Department of Commerce.  The commissioner 
 16.27  of finance in reporting the sales tax and sales tax on motor 
 16.28  vehicles collections to the United States Department of Commerce 
 16.29  shall exclude this amount from the sales and motor vehicle 
 16.30  collections.  Sales tax and Sales tax on motor vehicles revenues 
 16.31  revenue received from political subdivisions must be reported as 
 16.32  intergovernmental grants or similar intergovernmental revenue.  
 16.33  The amount of the sales tax and sales tax on motor vehicles paid 
 16.34  by state agencies must be reported as reduced state expenditures.
 16.35     Sec. 10.  Minnesota Statutes 1998, section 297F.09, 
 16.36  subdivision 1, is amended to read: 
 17.1      Subdivision 1.  [MONTHLY RETURN; CIGARETTE DISTRIBUTOR.] On 
 17.2   or before the 18th day of each calendar month, a distributor 
 17.3   with a place of business in this state shall file a return with 
 17.4   the commissioner showing the quantity of cigarettes manufactured 
 17.5   or brought in from outside the state or purchased during the 
 17.6   preceding calendar month and the quantity of cigarettes sold or 
 17.7   otherwise disposed of in this state and outside this state 
 17.8   during that month.  A licensed distributor outside this state 
 17.9   shall in like manner file a return showing the quantity of 
 17.10  cigarettes shipped or transported into this state during the 
 17.11  preceding calendar month.  Returns must be made in the form and 
 17.12  manner prescribed by the commissioner and must contain any other 
 17.13  information required by the commissioner.  The return must be 
 17.14  accompanied by a remittance for the full unpaid tax liability 
 17.15  shown by it.  The return for the May liability and 75 percent of 
 17.16  the estimated June liability is due on the date payment of the 
 17.17  tax is due. 
 17.18     Sec. 11.  Minnesota Statutes 1998, section 297F.09, 
 17.19  subdivision 2, is amended to read: 
 17.20     Subd. 2.  [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.] 
 17.21  On or before the 18th day of each calendar month, a distributor 
 17.22  with a place of business in this state shall file a return with 
 17.23  the commissioner showing the quantity and wholesale sales price 
 17.24  of each tobacco product: 
 17.25     (1) brought, or caused to be brought, into this state for 
 17.26  sale; and 
 17.27     (2) made, manufactured, or fabricated in this state for 
 17.28  sale in this state, during the preceding calendar month.  
 17.29  Every licensed distributor outside this state shall in like 
 17.30  manner file a return showing the quantity and wholesale sales 
 17.31  price of each tobacco product shipped or transported to 
 17.32  retailers in this state to be sold by those retailers, during 
 17.33  the preceding calendar month.  Returns must be made in the form 
 17.34  and manner prescribed by the commissioner and must contain any 
 17.35  other information required by the commissioner.  The return must 
 17.36  be accompanied by a remittance for the full tax liability shown, 
 18.1   less 1.5 percent of the liability as compensation to reimburse 
 18.2   the distributor for expenses incurred in the administration of 
 18.3   this chapter.  The return for the May liability and 75 percent 
 18.4   of the estimated June liability is due on the date payment of 
 18.5   the tax is due. 
 18.6      Sec. 12.  [APPROPRIATION; GENERAL FUND TRANSFER.] 
 18.7      For fiscal year 2001, $204,000,000 is appropriated from the 
 18.8   general fund to the highway user tax distribution fund for 
 18.9   apportionment in the same manner and for the same purpose as 
 18.10  other money in that fund.  
 18.11     For each fiscal year thereafter, the commissioner of 
 18.12  finance shall calculate the difference between (1) the amount of 
 18.13  proceeds of the tax that would have occurred under Minnesota 
 18.14  Statutes 1998, section 168.013, subdivision 1a, for the fiscal 
 18.15  year and (2) the proceeds of the tax under section 1 for the 
 18.16  fiscal year, and transfer that amount from the general fund to 
 18.17  the highway user tax distribution fund for apportionment in the 
 18.18  same manner and for the same purpose as other money in that fund.
 18.19     Sec. 13.  [REPEALER.] 
 18.20     (a) Minnesota Statutes 1999 Supplement, section 297A.15, 
 18.21  subdivision 5, is repealed. 
 18.22     (b) Minnesota Statutes 1998, sections 289A.60, subdivision 
 18.23  15; 297F.09, subdivision 6; and 297G.09, subdivision 5, are 
 18.24  repealed. 
 18.25     Sec. 14.  [EFFECTIVE DATE.] 
 18.26     Section 1 is effective for registrations due after June 30, 
 18.27  2000.  Sections 2, 3, 10, 11, and 13, paragraph (b), are 
 18.28  effective for returns filed after January 1, 2001.  Sections 4 
 18.29  to 9 and 13, paragraph (a), are effective for sales and 
 18.30  purchases occurring after June 30, 2000.