2nd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; recodifying the sales and use 1.3 tax laws; making style and form and clarifying 1.4 changes; amending Minnesota Statutes 1998, sections 1.5 37.13; 115A.69, subdivision 6; 116A.25; 289A.31, 1.6 subdivision 7; 360.035; 458A.09; 458A.30; 458D.23; 1.7 469.127; 473.448; 473.545; and 473.608, subdivision 2; 1.8 Minnesota Statutes 1999 Supplement, section 469.101, 1.9 subdivision 2; proposing coding for new law in 1.10 Minnesota Statutes, chapter 297A; repealing Minnesota 1.11 Statutes 1998, sections 297A.01; 297A.02; 297A.022; 1.12 297A.023; 297A.03; 297A.04; 297A.041; 297A.06; 1.13 297A.065; 297A.07; 297A.09; 297A.10; 297A.11; 297A.12; 1.14 297A.13; 297A.135; 297A.14; 297A.141; 297A.15; 1.15 297A.16; 297A.17; 297A.18; 297A.21; 297A.211; 1.16 297A.213; 297A.22; 297A.23; 297A.24; 297A.25; 1.17 297A.2531; 297A.2545; 297A.255; 297A.256; 297A.2571; 1.18 297A.2572; 297A.2573; 297A.259; 297A.26; 297A.28; 1.19 297A.33, subdivision 2; 297A.44, subdivision 1; 1.20 297A.46; 297A.47; and 297A.48. 1.21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.22 ARTICLE 1 1.23 RECODIFICATION 1.24 Section 1. [PURPOSE AND EFFECT.] 1.25 Subdivision 1. [PURPOSE.] It is the intent of the 1.26 legislature to recodify Minnesota Statutes, chapter 297A, by 1.27 removing archaic, obsolete, and redundant language, and by 1.28 improving the organization and readability of the chapter. The 1.29 provisions of this act may not be used to determine the law in 1.30 effect prior to this act's effective date. 1.31 Subd. 2. [EFFECT.] Due to the complexity of the 1.32 recodification, prior provisions are repealed on the effective 1.33 date of the new provisions. The repealed provisions, however, 2.1 continue to remain in effect until superseded by the analogous 2.2 provision in the new law. 2.3 Sec. 2. Minnesota Statutes 1998, section 37.13, is amended 2.4 to read: 2.5 37.13 [TITLE TO PROPERTY VESTED IN STATE.] 2.6 Subdivision 1. [USE OF MONEY.] The state owns all money 2.7 and other property of the society in the name of the society and 2.8 there may be no division of its assets among society members. 2.9 Money received by the society must be used for holding its 2.10 annual fair and for other exhibitions or expositions the society 2.11 holds, for the improvement of the fairgrounds, for the payment 2.12 of expenses, premiums, and purses, for the acquisition of real 2.13 and personal property, for the use and benefit of the society, 2.14 and for furnishing attractions and amusements the board of 2.15 managers considers necessary for the success of its fairs and 2.16 other exhibitions and expositions. 2.17 Subd. 2. [CAPITAL IMPROVEMENTS.] The society shall spend 2.18 the amount of sales tax retained under section 289A.31, 2.19 subdivision 7, paragraph (f), exclusively to make capital 2.20 improvements to state-owned buildings and facilities on the 2.21 state fairgrounds. The society shall match the amount retained 2.22 with an equal amount from proceeds from special assessments 2.23 levied against commercial exhibits, concessions and rentals, and 2.24 from other special user fees specifically designated for capital 2.25 improvements. 2.26 Sec. 3. Minnesota Statutes 1998, section 289A.31, 2.27 subdivision 7, is amended to read: 2.28 Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax 2.29 required to be collected by the retailer under chapter 297A 2.30 constitutes a debt owed by the retailer to Minnesota, and the 2.31 sums collected must be held as a special fund in trust for the 2.32 state of Minnesota. 2.33 A retailer who does not maintain a place of business within 2.34 this state as defined by section 297A.21, subdivision 1, shall 2.35 not be indebted to Minnesota for amounts of tax that it was 2.36 required to collect but did not collect unless the retailer knew 3.1 or had been advised by the commissioner of its obligation to 3.2 collect the tax. 3.3 (b) The use tax required to be paid by a purchaser is a 3.4 debt owed by the purchaser to Minnesota. 3.5 (c) The tax imposed by
sections 297A.01 to 297A.44chapter 3.6 297A, and interest and penalties, is a personal debt of the 3.7 individual required to file a return from the time the liability 3.8 arises, irrespective of when the time for payment of that 3.9 liability occurs. The debt is, in the case of the executor or 3.10 administrator of the estate of a decedent and in the case of a 3.11 fiduciary, that of the individual in an official or fiduciary 3.12 capacity unless the individual has voluntarily distributed the 3.13 assets held in that capacity without reserving sufficient assets 3.14 to pay the tax, interest, and penalties, in which case the 3.15 individual is personally liable for the deficiency. 3.16 (d) Liability for payment of sales and use taxes includes 3.17 any responsible person or entity described in the personal 3.18 liability provisions of section 270.101. 3.19 (e) Any amounts collected, even if erroneously or illegally 3.20 collected, from a purchaser under a representation that they are 3.21 taxes imposed under chapter 297A are state funds from the time 3.22 of collection and must be reported on a return filed with the 3.23 commissioner. The amounts collected are not subject to refund 3.24 unless the seller submits written evidence to the commissioner 3.25 that the tax and any interest earned on the tax has been or will 3.26 be refunded or credited to the purchaser by the seller. 3.27 (f) The tax imposed under chapter 297A on sales of tickets 3.28 to the premises of or events sponsored by the state agricultural 3.29 society and conducted on the state fairgrounds during the period 3.30 of the annual state fair may be retained by the state 3.31 agricultural society if the funds are used and matched as 3.32 required under section 37.13, subdivision 2. 3.33 DEFINITIONS 3.34 Sec. 4. [297A.61] [DEFINITIONS.] 3.35 Subdivision 1. [APPLICABILITY.] The following words, 3.36 terms, and phrases when used in this chapter have the meanings 4.1 given them in this section, unless the context clearly indicates 4.2 a different meaning. 4.3 Subd. 2. [PERSON.] "Person" includes any individual, and 4.4 any group or combination of individuals acting as a unit, and 4.5 the plural as well as the singular number. Person includes a 4.6 firm, partnership, joint venture, limited liability company, 4.7 association, cooperative, social club, fraternal organization, 4.8 municipal or private corporation whether or not organized for 4.9 profit, estates, trusts, business trusts, receiver, trustee, 4.10 syndicate, the United States, and a state and its political 4.11 subdivisions. Person includes, but is not limited to, directors 4.12 and officers of corporations, governors and managers of a 4.13 limited liability company, or members of partnerships who, 4.14 either individually or jointly with others, have the control, 4.15 supervision, or responsibility of filing returns and making 4.16 payment of the amount of tax imposed by this chapter. Person 4.17 also includes any agent or consignee of any individual or 4.18 organization enumerated in this subdivision. 4.19 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 4.20 include, but are not limited to, each of the transactions listed 4.21 in this subdivision. 4.22 (b) Sale and purchase include any transfer of title or 4.23 possession, or both, of tangible personal property, whether 4.24 absolutely or conditionally, and the leasing of or the granting 4.25 of a license to use or consume, for a consideration, tangible 4.26 personal property, other than a manufactured home used for 4.27 residential purposes for a continuous period of 30 days or more. 4.28 (c) Sale and purchase include the production, fabrication, 4.29 printing, or processing of tangible personal property for a 4.30 consideration for consumers who furnish either directly or 4.31 indirectly the materials used in the production, fabrication, 4.32 printing, or processing. 4.33 (d) Sale and purchase include the furnishing, preparing, or 4.34 serving for a consideration of food or drinks. Notwithstanding 4.35 section 297A.67, subdivision 2, taxable food or drinks include, 4.36 but are not limited to, the following: 5.1 (1) food or drinks sold by the retailer for immediate 5.2 consumption on the retailer's premises. Food and drinks sold 5.3 within a building or grounds that require an admission charge 5.4 for entrance are presumed to be sold for consumption on the 5.5 premises; 5.6 (2) food or drinks prepared by the retailer for immediate 5.7 consumption either on or off the retailer's premises. For 5.8 purposes of this subdivision, "food or drinks prepared for 5.9 immediate consumption" means any food product upon which an act 5.10 of preparation including, but not limited to, cooking, mixing, 5.11 sandwich making, blending, heating, or pouring has been 5.12 performed by the retailer so the food product may be immediately 5.13 consumed by the purchaser; 5.14 (3) ice cream, ice milk, frozen yogurt products, or frozen 5.15 novelties sold in single or individual servings including, but 5.16 not limited to, cones, sundaes, and snow cones; 5.17 (4) soft drinks and other beverages, including all 5.18 carbonated and noncarbonated beverages or drinks sold in liquid 5.19 form, but not including beverages or drinks which contain milk 5.20 or milk products, beverages or drinks containing 15 or more 5.21 percent fruit juice, and noncarbonated and noneffervescent 5.22 bottled water sold in individual containers of one-half gallon 5.23 or more in size; 5.24 (5) gum, candy, and candy products; 5.25 (6) ice; 5.26 (7) all food sold from vending machines; 5.27 (8) all food for immediate consumption sold from concession 5.28 stands and vehicles; 5.29 (9) party trays; 5.30 (10) all meals and single servings of packaged snack food 5.31 sold in restaurants and bars; and 5.32 (11) bakery products that are: 5.33 (i) prepared by the retailer for consumption on the 5.34 retailer's premises; 5.35 (ii) sold at a place that charges admission; 5.36 (iii) sold from vending machines; or 6.1 (iv) sold in single or individual servings from concession 6.2 stands, vehicles, bars, and restaurants. 6.3 For purposes of this paragraph, "single or individual 6.4 servings" does not include products when sold in bulk containers 6.5 or bulk packaging. 6.6 For purposes of this paragraph, "premises" means the total 6.7 space and facilities, including buildings, grounds, and parking 6.8 lots that are made available or that are available for use by 6.9 the retailer or customer for the purpose of sale or consumption 6.10 of prepared food and drinks. The premises of a caterer is the 6.11 place where the catered food or drinks are served. 6.12 (e) A sale and a purchase includes the furnishing for a 6.13 consideration of electricity, gas, water, or steam for use or 6.14 consumption within this state or local exchange telephone 6.15 service, intrastate toll service, and interstate toll service, 6.16 if that service originates from and is charged to a telephone 6.17 located in this state. Telephone service includes (1) paging 6.18 services, and (2) private communication service, as defined in 6.19 United States Code, title 26, section 4252(d), except for 6.20 private communication service purchased by an agent acting on 6.21 behalf of the state lottery. Telephone service does not include 6.22 services purchased with a prepaid telephone calling card. The 6.23 furnishing for a consideration of access to telephone services 6.24 by a hotel to its guests is a sale. The furnishing for a 6.25 consideration of items listed in this paragraph by a municipal 6.26 corporation is a sale. 6.27 (f) A sale and a purchase includes the transfer for a 6.28 consideration of computer software. 6.29 (g) A sale and a purchase includes the furnishing for a 6.30 consideration of taxable services as defined in subdivision 16. 6.31 (h) A sale and a purchase includes the furnishing for a 6.32 consideration of tangible personal property or taxable services 6.33 by the United States or any of its agencies or 6.34 instrumentalities, or the state of Minnesota, its agencies, 6.35 instrumentalities, or political subdivisions. 6.36 Subd. 4. [RETAIL SALE.] (a) A "retail sale" means a sale 7.1 for any purpose other than resale in the regular course of 7.2 business. 7.3 (b) A sale of property used by the owner only by leasing it 7.4 to others or by holding it in an effort to lease it, and put to 7.5 no use by the owner other than resale after the lease or effort 7.6 to lease, is a sale of property for resale. 7.7 (c) A sale of master computer software that is purchased 7.8 and used to make copies for sale or lease is a sale of property 7.9 for resale. 7.10 (d) A sale of building materials, supplies and equipment to 7.11 owners, contractors, subcontractors or builders for the erection 7.12 of buildings or the alteration, repair, or improvement of real 7.13 property is a retail sale in whatever quantity sold, whether the 7.14 sale is for purposes of resale in the form of real property or 7.15 otherwise. 7.16 (e) A sale of carpeting, linoleum, or similar floor 7.17 covering to a person who provides for installation of the floor 7.18 covering is a retail sale and not a sale for resale since a sale 7.19 of floor covering which includes installation is a contract for 7.20 the improvement of real property. 7.21 (f) A sale of shrubbery, plants, sod, trees, and similar 7.22 items to a person who provides for installation of the items is 7.23 a retail sale and not a sale for resale since a sale of 7.24 shrubbery, plants, sod, trees, and similar items that includes 7.25 installation is a contract for the improvement of real property. 7.26 (g) A sale of tangible personal property that is awarded as 7.27 prizes is a retail sale and is not considered a sale of property 7.28 for resale. 7.29 (h) A sale of tangible personal property utilized or 7.30 employed in the furnishing or providing of services under 7.31 subdivision 16, paragraph (b), including, but not limited to, 7.32 property given as promotional items, is a retail sale and is not 7.33 considered a sale of property for resale. 7.34 (i) A sale of tangible personal property used in conducting 7.35 lawful gambling under chapter 349 or the state lottery under 7.36 chapter 349A, including, but not limited to, property given as 8.1 promotional items, is a retail sale and is not considered a sale 8.2 of property for resale. 8.3 (j) A sale of machines, equipment, or devices that are used 8.4 to furnish, provide, or dispense goods or services, including, 8.5 but not limited to, coin-operated devices, is a retail sale and 8.6 is not considered a sale of property for resale. 8.7 (k) In the case of a lease, a retail sale occurs when an 8.8 obligation to make a lease payment becomes due under the terms 8.9 of the agreement or the trade practices of the lessor. 8.10 (l) In the case of a conditional sales contract, a retail 8.11 sale occurs upon the transfer of title or possession of the 8.12 tangible personal property. 8.13 Subd. 5. [STORAGE.] "Storage" includes keeping or 8.14 retaining tangible personal property in Minnesota for any 8.15 purpose except sale in the regular course of business or 8.16 subsequent use solely outside Minnesota of tangible personal 8.17 property. 8.18 Subd. 6. [USE.] (a) "Use" includes the exercise of a right 8.19 or power incident to the ownership of any interest in tangible 8.20 personal property, or taxable services, purchased from a 8.21 retailer, other than the sale of that property in the regular 8.22 course of business. 8.23 (b) Use includes the consumption of printed materials in 8.24 the creation of nontaxable advertising that is distributed, 8.25 either directly or indirectly, within Minnesota. 8.26 Subd. 7. [SALES PRICE.] (a) "Sales price" means the total 8.27 consideration for a retail sale, valued in money, whether paid 8.28 in money or by barter or exchange. 8.29 (b) Sales price includes: 8.30 (1) the cost of the property sold, cost of materials used, 8.31 labor or service cost, interest, or discount allowed after the 8.32 sale is consummated; 8.33 (2) the cost of transportation incurred prior to the time 8.34 of sale; 8.35 (3) any amount for which credit is given by the seller to 8.36 the purchaser; 9.1 (4) charges for services that are part of a sale; or 9.2 (5) any other expense whatsoever. 9.3 (c) Sales price does not include the following: 9.4 (1) an amount allowed as credit for tangible personal 9.5 property taken in trade for resale; 9.6 (2) charges of up to 15 percent in lieu of tips if the 9.7 charges are separately stated; 9.8 (3) interest, financing, or carrying charges if the charges 9.9 are separately stated; 9.10 (4) charges for labor or services used in installing or 9.11 applying the property sold if the charges are separately stated; 9.12 (5) transportation charges if the transportation occurs 9.13 after the retail sale of the property if the charges are 9.14 separately stated; 9.15 (6) cash discounts allowed and taken on sales or the amount 9.16 refunded either in cash or in credit for property returned by 9.17 purchasers; 9.18 (7) the rental motor vehicle tax imposed under section 9.19 297A.64; or 9.20 (8) the amount of any tax imposed by the United States on 9.21 communications services under United States Code, title 26, 9.22 section 4251(a). 9.23 (d) Notwithstanding paragraph (c), "sales price," for 9.24 purposes of sales of ready-mixed concrete sold from a 9.25 ready-mixed concrete truck, includes any transportation, 9.26 delivery, or other service charges, and no deduction is allowed 9.27 for those charges, whether or not the charges are separately 9.28 stated. 9.29 Subd. 8. [GROSS RECEIPTS.] "Gross receipts" means the 9.30 total amount received, in money or by barter or exchange, for 9.31 all sales at retail as measured by the sales price. 9.32 Subd. 9. [RETAILER.] "Retailer" means every person engaged 9.33 in making retail sales. 9.34 Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible 9.35 personal property" means corporeal personal property of any 9.36 kind, including property that is to become real property as a 10.1 result of incorporation, attachment, or installation following 10.2 its acquisition. 10.3 (b) Tangible personal property includes, but is not limited 10.4 to: 10.5 (1) computer software, whether contained on tape, discs, 10.6 cards, or other devices; and 10.7 (2) prepaid telephone calling cards. 10.8 (c) Personal property does not include: 10.9 (1) large ponderous machinery and equipment used in a 10.10 business or production activity which at common law would be 10.11 considered to be real property; 10.12 (2) property which is subject to an ad valorem property 10.13 tax; 10.14 (3) property described in section 272.02, subdivision 9, 10.15 clauses (a) to (d); and 10.16 (4) property described in section 272.03, subdivision 2, 10.17 clauses (3) and (5). 10.18 Subd. 11. [COMMISSIONER.] "Commissioner" means the 10.19 commissioner of revenue of the state of Minnesota. 10.20 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 10.21 or used machinery, equipment, implements, accessories, and 10.22 contrivances used directly and principally in the production for 10.23 sale, but not including the processing, of livestock, dairy 10.24 animals, dairy products, poultry and poultry products, fruits, 10.25 vegetables, forage, grains, and bees and apiary products. 10.26 (b) Farm machinery includes: 10.27 (1) machinery for the preparation, seeding, or cultivation 10.28 of soil for growing agricultural crops and sod, for the 10.29 harvesting and threshing of agricultural products, or for the 10.30 harvesting or mowing of sod; 10.31 (2) barn cleaners, milking systems, grain dryers, automatic 10.32 feeding systems, and similar installations, whether or not the 10.33 equipment is installed by the seller and becomes part of the 10.34 real property; 10.35 (3) irrigation equipment sold for exclusively agricultural 10.36 use, including pumps, pipe fittings, valves, sprinklers, and 11.1 other equipment necessary to the operation of an irrigation 11.2 system when sold as part of an irrigation system, whether or not 11.3 the equipment is installed by the seller and becomes part of the 11.4 real property; 11.5 (4) logging equipment, including chain saws used for 11.6 commercial logging; 11.7 (5) fencing used for the containment of farmed cervidae, as 11.8 defined in section 17.451, subdivision 2; 11.9 (6) primary and backup generator units used to generate 11.10 electricity for the purpose of operating farm machinery, as 11.11 defined in this subdivision, or providing light or space heating 11.12 necessary for the production of livestock, dairy animals, dairy 11.13 products, or poultry and poultry products; and 11.14 (7) aquaculture production equipment as defined in 11.15 subdivision 13. 11.16 (c) Farm machinery does not include: 11.17 (1) repair or replacement parts; 11.18 (2) tools, shop equipment, grain bins, feed bunks, fencing 11.19 material except fencing material covered by paragraph (b), 11.20 clause (5), communication equipment and other farm supplies; 11.21 (3) motor vehicles taxed under chapter 297B; 11.22 (4) snowmobiles or snow blowers; or 11.23 (5) lawn mowers except those used in the production of sod 11.24 for sale, or garden-type tractors or garden tillers. 11.25 Subd. 13. [AQUACULTURE PRODUCTION EQUIPMENT.] (a) 11.26 "Aquaculture production equipment" means new or used machinery, 11.27 equipment, implements, accessories, and contrivances used 11.28 directly and principally in aquaculture production. 11.29 (b) Aquaculture production equipment includes augers and 11.30 blowers, automatic feed systems, manual feeding equipment, 11.31 shockers, gill nets, trap nets, seines, box traps, round nets 11.32 and traps, net pens, dip nets, net washers, floating net 11.33 supports, floating access walkways, net supports and walkways, 11.34 growing tanks, holding tanks, troughs, raceways, transport 11.35 tanks, egg taking equipment, egg hatcheries, egg incubators, egg 11.36 baskets and troughs, egg graders, egg counting equipment, fish 12.1 counting equipment, fish graders, fish pumps and loaders, fish 12.2 elevators, air blowers, air compressors, oxygen generators, 12.3 oxygen regulators, diffusers and injectors, air supply 12.4 equipment, oxygenation columns, water coolers and heaters, heat 12.5 exchangers, water filter systems, water purification systems, 12.6 waste collection equipment, feed mills, portable scales, feed 12.7 grinders, feed mixers, feed carts and trucks, power feed wagons, 12.8 fertilizer spreaders, fertilizer tanks, forage collection 12.9 equipment, land levelers, loaders, post hole diggers, disc, 12.10 harrow, plow, and water diversion devices. 12.11 (c) Aquaculture production equipment does not include 12.12 repair or replacement parts for aquaculture production equipment. 12.13 Subd. 14. [LEASING; LEASE.] "Leasing" includes all 12.14 transfers of possession or the use of tangible personal property 12.15 by the lessee for a consideration, if title remains with the 12.16 lessor at the end of the lease. For purposes of this chapter, a 12.17 lease of tangible personal property is a series of sales 12.18 transactions that impose upon the lessee multiple payment 12.19 obligations. "Leasing" does not include a transaction defined 12.20 under subdivision 15. 12.21 Subd. 15. [CONDITIONAL SALES CONTRACT.] A "conditional 12.22 sales contract" means a contract, whether or not the contract is 12.23 designated as a lease, that provides that the purchaser or 12.24 lessee is to obtain title to the property at the end of the term 12.25 of the contract or has the option to purchase the property at 12.26 the end of the term of the contract for a nominal amount. For 12.27 purposes of this paragraph, "nominal amount" means an amount so 12.28 small, slight, or negligible that it is not economically 12.29 significant and bears no relation to the real value of the item 12.30 being purchased. 12.31 Subd. 16. [TAXABLE SERVICES.] (a) "Taxable services" means 12.32 the services listed in this subdivision and other services 12.33 listed in subdivision 3. 12.34 (b) Taxable services includes the granting of the privilege 12.35 of admission to places of amusement, recreational areas, or 12.36 athletic events, and the making available of amusement devices, 13.1 tanning facilities, reducing salons, steam baths, turkish baths, 13.2 health clubs, and spas or athletic facilities. 13.3 (c) Taxable services includes the furnishing of lodging and 13.4 related services by a hotel, rooming house, resort, campground, 13.5 motel, or trailer camp and the granting of any similar license 13.6 to use real property other than the renting or leasing thereof 13.7 for a continuous period of 30 days or more. 13.8 (d) Taxable services includes the furnishing of cable 13.9 television services or similar television services, including, 13.10 but not limited to, charges for basic, premium, pay-per-view, 13.11 and any other similar service. 13.12 (e) Taxable services includes the furnishing of parking 13.13 services, whether on a contractual, hourly, or other periodic 13.14 basis, except for parking at a meter. 13.15 (f) Taxable services includes the granting of membership in 13.16 a club, association, or other organization if: 13.17 (1) the club, association, or other organization makes 13.18 available for the use of its members sports and athletic 13.19 facilities, without regard to whether a separate charge is 13.20 assessed for use of the facilities; and 13.21 (2) use of the sports and athletic facility is not made 13.22 available to the general public on the same basis as it is made 13.23 available to members. 13.24 Granting of membership means both one-time initiation fees and 13.25 periodic membership dues. Sports and athletic facilities 13.26 include golf courses; tennis, racquetball, handball, and squash 13.27 courts; basketball and volleyball facilities; running tracks; 13.28 exercise equipment; swimming pools; and other similar athletic 13.29 or sports facilities. 13.30 (g) Taxable services includes the furnishing of the 13.31 following services as provided in this paragraph: 13.32 (1) laundry and dry cleaning services including cleaning, 13.33 pressing, repairing, altering, and storing clothes, linen 13.34 services and supply, cleaning and blocking hats, and carpet, 13.35 drapery, upholstery, and industrial cleaning. Laundry and dry 13.36 cleaning services do not include services provided by coin 14.1 operated facilities operated by the customer; 14.2 (2) motor vehicle washing, waxing, and cleaning services, 14.3 including services provided by coin operated facilities operated 14.4 by the customer, and rustproofing, undercoating, and towing of 14.5 motor vehicles; 14.6 (3) building and residential cleaning, maintenance, and 14.7 disinfecting and exterminating services; 14.8 (4) detective, security, burglar, fire alarm, and armored 14.9 car services; but not including services performed within the 14.10 jurisdiction they serve by off-duty licensed peace officers as 14.11 defined in section 626.84, subdivision 1, or services provided 14.12 by a nonprofit organization for monitoring and electronic 14.13 surveillance of persons placed on in-home detention pursuant to 14.14 court order or under the direction of the Minnesota department 14.15 of corrections; 14.16 (5) pet grooming services; 14.17 (6) lawn care, fertilizing, mowing, spraying and sprigging 14.18 services; garden planting and maintenance; tree, bush, and shrub 14.19 pruning, bracing, spraying, and surgery; indoor plant care; 14.20 tree, bush, shrub, and stump removal; and tree trimming for 14.21 public utility lines. Services performed under a construction 14.22 contract for the installation of shrubbery, plants, sod, trees, 14.23 bushes, and similar items are not taxable; 14.24 (7) massages, except when provided by a licensed health 14.25 care facility or professional or upon written referral from a 14.26 licensed health care facility or professional for treatment of 14.27 illness, injury, or disease; and 14.28 (8) the furnishing of lodging, board, and care services for 14.29 animals in kennels and other similar arrangements, but excluding 14.30 veterinary and horse boarding services. 14.31 The services listed in this paragraph are taxable under 14.32 section 297A.62 if the service is performed wholly within 14.33 Minnesota or if the service is performed partly within and 14.34 partly outside Minnesota and the greater proportion of the 14.35 service is performed in Minnesota, based on the cost of 14.36 performance. In applying the provisions of this chapter, the 15.1 terms "tangible personal property" and "sales at retail" include 15.2 taxable services and the provision of taxable services, unless 15.3 specifically provided otherwise. Services performed by an 15.4 employee for an employer are not taxable. Services performed by 15.5 a partnership or association for another partnership or 15.6 association are not taxable if one of the entities owns or 15.7 controls more than 80 percent of the voting power of the equity 15.8 interest in the other entity. Services performed between 15.9 members of an affiliated group of corporations are not taxable. 15.10 For purposes of this section, "affiliated group of corporations" 15.11 includes those entities that would be classified as members of 15.12 an affiliated group under United States Code, title 26, section 15.13 1504, and that are eligible to file a consolidated tax return 15.14 for federal income tax purposes. 15.15 Subd. 17. [COMPUTER SOFTWARE.] "Computer software" means a 15.16 computer program, either in the form of written procedures or in 15.17 the form of storage media on which, or in which, the program is 15.18 recorded, or any required documentation or manuals designed to 15.19 facilitate the use of the computer program. For purposes of 15.20 this subdivision: 15.21 (1) "Storage media" includes punched cards, tapes, discs, 15.22 diskettes, or drums on which computer programs may be embodied 15.23 or stored; 15.24 (2) "Computer" does not include tape-controlled automatic 15.25 drilling, milling, or other manufacturing machinery or 15.26 equipment; and 15.27 (3) "Computer program" means information and directions 15.28 that dictate the function performed by data processing 15.29 equipment. It includes the complete plan for the solution of a 15.30 problem, such as the complete sequence of automatic data 15.31 processing equipment instructions necessary to solve a problem 15.32 and includes both systems and application programs and 15.33 subdivisions, such as assemblers, compilers, routines, 15.34 generators, and utility programs. Computer program includes a 15.35 "canned" or prewritten computer program that is held or existing 15.36 for general or repeated sale or lease, even if the prewritten or 16.1 "canned" program was initially developed on a custom basis or 16.2 for in-house use. 16.3 Subd. 18. [HANDICAPPED.] "Handicapped" means an individual 16.4 who has a permanent and total disability as defined in section 16.5 273.13, subdivision 22. 16.6 Subd. 19. [COMMON CARRIER.] "Common carrier" means a 16.7 person engaged in transportation for hire of tangible personal 16.8 property by motor vehicle, if the person: 16.9 (1) has a certificate or permit or has completed a 16.10 registration process that authorizes for-hire transportation of 16.11 property from the United States Department of Transportation, 16.12 the transportation regulation board, or the department of 16.13 transportation; 16.14 (2) is transporting commodities defined as "exempt" in 16.15 for-hire transportation; or 16.16 (3) transports tangible personal property pursuant to a 16.17 contract with a person described in clause (1) or (2). 16.18 Subd. 20. [PREPAID TELEPHONE CALLING CARD.] "Prepaid 16.19 telephone calling card" means any card or other similar 16.20 arrangement, including a prepaid authorization number, that 16.21 permits its holder to obtain telephone services and pay for such 16.22 services in advance. 16.23 Subd. 21. [NORMAL COURSE OF BUSINESS.] "Normal course of 16.24 business" means activities that demonstrate a commercial 16.25 continuity or consistency of making sales or performing services 16.26 for the purposes of attaining profit or producing income. 16.27 Factors that indicate that a person is acting in the normal 16.28 course of business include: 16.29 (1) systematic solicitation of sales through advertising 16.30 media; 16.31 (2) entering into contracts to perform services or provide 16.32 tangible personal property; 16.33 (3) maintaining a place of business; or 16.34 (4) use of exemption certificates to purchase items exempt 16.35 from the sales tax. 16.36 Subd. 22. [INTERNAL REVENUE CODE.] Unless specifically 17.1 provided otherwise, "Internal Revenue Code" means the Internal 17.2 Revenue Code of 1986, as amended through December 31, 1999. 17.3 Subd. 23. [UNITED STATES CODE.] Unless specifically 17.4 provided otherwise, "United States Code" means the United States 17.5 Code as amended through December 31, 1999. 17.6 TAXES; RATES 17.7 Sec. 5. [297A.62] [SALES TAX IMPOSED; RATES.] 17.8 Subdivision 1. [GENERALLY.] Except as otherwise provided 17.9 in subdivision 2 or 3 or in this chapter, a sales tax of 6.5 17.10 percent is imposed on the gross receipts from retail sales as 17.11 defined in section 297A.61, subdivision 4, made in this state or 17.12 to a destination in this state by a person who is required to 17.13 have or voluntarily obtains a permit under section 297A.83, 17.14 subdivision 1. 17.15 Subd. 2. [LIQUOR AND BEER SALES.] The rate of the sales 17.16 tax imposed is nine percent on the gross receipts from retail 17.17 sales of: 17.18 (1) intoxicating liquor, as defined in section 340A.101, 17.19 subdivision 14; and 17.20 (2) 3.2 percent malt liquor, as defined in section 17.21 340A.101, subdivision 19, when sold at an on-sale or off-sale 17.22 municipal liquor store or other establishment licensed to sell 17.23 any type of intoxicating liquor. 17.24 Subd. 3. [MANUFACTURED HOUSING AND PARK TRAILERS.] For 17.25 retail sales of manufactured homes as defined in section 327.31, 17.26 subdivision 6, for residential uses, the sales tax under 17.27 subdivision 1 is imposed on 65 percent of the dealer's cost of 17.28 the manufactured home. For retail sales of new or used park 17.29 trailers, as defined in section 168.011, subdivision 8, 17.30 paragraph (b), the sales tax under subdivision 1 is imposed on 17.31 65 percent of the sales price of the park trailer. 17.32 Sec. 6. [297A.63] [USE TAXES IMPOSED; RATES.] 17.33 Subdivision 1. [USE OF TANGIBLE PERSONAL PROPERTY OR 17.34 TAXABLE SERVICES.] (a) For the privilege of using, storing, 17.35 distributing, or consuming in Minnesota tangible personal 17.36 property or taxable services purchased for use, storage, 18.1 distribution, or consumption in this state, a use tax is imposed 18.2 on a person in Minnesota. The tax is imposed on the sales price 18.3 of retail sales of the tangible personal property or taxable 18.4 services at the rate of tax imposed under section 297A.62. 18.5 (b) No tax is imposed under paragraph (a) if the tax 18.6 imposed by section 297A.62 was paid on the sales price of the 18.7 tangible personal property or taxable services. 18.8 (c) No tax is imposed under paragraph (a) if the purchase 18.9 meets the requirements for exemption under section 297A.67, 18.10 subdivision 21. 18.11 Subd. 2. [USE OF TANGIBLE PERSONAL PROPERTY MADE FROM 18.12 MATERIALS.] (a) A use tax is imposed on a person who 18.13 manufactures, fabricates, or assembles tangible personal 18.14 property from materials, either within or outside this state and 18.15 who uses, stores, distributes, or consumes the tangible personal 18.16 property in Minnesota. The tax is imposed on the sales price of 18.17 retail sales of the materials contained in the tangible personal 18.18 property at the rate of tax imposed under section 297A.62. 18.19 (b) No tax is imposed under paragraph (a) if the tax 18.20 imposed by section 297A.62 was paid on the sales price of 18.21 materials contained in the tangible personal property. 18.22 Sec. 7. [297A.64] [RENTAL MOTOR VEHICLE TAX IMPOSED; 18.23 RATE.] 18.24 Subdivision 1. [TAX IMPOSED.] A tax is imposed on the 18.25 lease or rental in this state for not more than 28 days of a 18.26 passenger automobile as defined in section 168.011, subdivision 18.27 7, a van as defined in section 168.011, subdivision 28, or a 18.28 pickup truck as defined in section 168.011, subdivision 29. The 18.29 rate of tax is 6.2 percent of the sales price. The tax applies 18.30 whether or not the vehicle is licensed in the state. 18.31 Subd. 2. [FEE IMPOSED.] A fee equal to three percent of 18.32 the sales price is imposed on leases or rentals of vehicles 18.33 subject to the tax under subdivision 1. The lessor on the 18.34 invoice to the customer may designate the fee as "a fee imposed 18.35 by the State of Minnesota for the registration of rental cars." 18.36 Subd. 3. [ADMINISTRATION.] The retailer shall report and 19.1 pay the tax imposed in subdivision 1 to the commissioner of 19.2 revenue with the taxes imposed in this chapter. The tax imposed 19.3 in subdivision 1 and the fee imposed in subdivision 2 are 19.4 subject to the same interest, penalty, and other provisions 19.5 provided for sales and use taxes under chapter 289A and this 19.6 chapter. The commissioner has the same powers to assess and 19.7 collect the tax and fee that are given the commissioner in 19.8 chapters 270 and 289A and this chapter to assess and collect 19.9 sales and use tax. 19.10 Subd. 4. [EXEMPTIONS.] (a) The tax and the fee imposed by 19.11 this section do not apply to a lease or rental of (1) a vehicle 19.12 to be used by the lessee to provide a licensed taxi service; (2) 19.13 a hearse or limousine used in connection with a burial or 19.14 funeral service; or (3) a van designed or adapted primarily for 19.15 transporting property rather than passengers. 19.16 (b) The lessor may elect not to charge the fee imposed in 19.17 subdivision 2 if in the previous calendar year the lessor had no 19.18 more than 20 vehicles available for lease that would have been 19.19 subject to tax under this section, or no more than $50,000 in 19.20 gross receipts that would have been subject to tax under this 19.21 section. 19.22 Subd. 5. [PAYMENT OF EXCESS FEES.] On the first sales tax 19.23 return due following the end of a calendar year during which a 19.24 lessor has imposed a fee under subdivision 2, the lessor shall 19.25 report to the commissioner of revenue, in the form required by 19.26 the commissioner, the amount of the fee collected during the 19.27 previous year and the amount of motor vehicle registration taxes 19.28 paid during the previous year by the lessor under chapter 168 on 19.29 vehicles subject to the fee under this section. If the amount 19.30 of the fees collected exceeds the amount of motor vehicle 19.31 registration taxes paid, the lessor shall remit the excess to 19.32 the commissioner of revenue at the time the report is submitted. 19.33 Sec. 8. [297A.65] [LOTTERY TICKETS; IN-LIEU TAX.] 19.34 Sales of state lottery tickets are exempt from the tax 19.35 imposed under section 297A.62. The state lottery must on or 19.36 before the 20th day of each month transmit to the commissioner 20.1 of revenue an amount equal to the gross receipts from the sale 20.2 of lottery tickets for the previous month multiplied by the tax 20.3 rate under section 297A.62, subdivision 1. The resulting 20.4 payment is in lieu of the sales tax that otherwise would be 20.5 imposed by this chapter. The commissioner shall deposit the 20.6 money transmitted as provided by section 297A.94 and the money 20.7 must be treated as other proceeds of the sales tax. For 20.8 purposes of this section, "gross receipts" means the proceeds of 20.9 the sale of tickets before deduction of a commission or other 20.10 compensation paid to the vendor or retailer for selling tickets. 20.11 REQUIREMENT TO COLLECT AND REMIT 20.12 Sec. 9. [297A.66] [JURISDICTION TO REQUIRE COLLECTION AND 20.13 REMITTANCE OF TAX BY RETAILER.] 20.14 Subdivision 1. [DEFINITIONS.] (a) "Retailer maintaining a 20.15 place of business in this state," or a similar term, means a 20.16 retailer: 20.17 (1) having or maintaining within this state, directly or by 20.18 a subsidiary, an office, place of distribution, sales or sample 20.19 room or place, warehouse, or other place of business; or 20.20 (2) having a representative, agent, salesperson, canvasser, 20.21 or solicitor operating in this state under the authority of the 20.22 retailer or its subsidiary, for any purpose, including the 20.23 repairing, selling, delivering, installing, or soliciting of 20.24 orders for the retailer's goods or services, or the leasing of 20.25 tangible personal property located in this state, whether the 20.26 place of business or agent, representative, salesperson, 20.27 canvasser, or solicitor is located in the state permanently or 20.28 temporarily, or whether or not the retailer or subsidiary is 20.29 authorized to do business in this state. 20.30 (b) "Destination of a sale" means the location to which the 20.31 retailer makes delivery of the property sold, or causes the 20.32 property to be delivered, to the purchaser of the property, or 20.33 to the agent or designee of the purchaser. The delivery may be 20.34 made by any means, including the United States Postal Service, a 20.35 common carrier, or a contract carrier. 20.36 Subd. 2. [RETAILER MAINTAINING A PLACE OF BUSINESS IN THIS 21.1 STATE.] (a) A retailer maintaining a place of business in this 21.2 state who makes retail sales in Minnesota or to a destination in 21.3 Minnesota shall collect sales and use taxes and remit them to 21.4 the commissioner under section 297A.77. 21.5 Subd. 3. [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN 21.6 THIS STATE.] (a) To the extent allowed by the United States 21.7 Constitution and the laws of the United States, a retailer 21.8 making retail sales from outside this state to a destination 21.9 within this state and not maintaining a place of business in 21.10 this state shall collect sales and use taxes and remit them to 21.11 the commissioner under section 297A.77, if the retailer engages 21.12 in the regular or systematic soliciting of sales from potential 21.13 customers in this state by: 21.14 (1) distribution, by mail or otherwise, of catalogs, 21.15 periodicals, advertising flyers, or other written solicitations 21.16 of business to customers in this state; 21.17 (2) display of advertisements on billboards or other 21.18 outdoor advertising in this state; 21.19 (3) advertisements in newspapers published in this state; 21.20 (4) advertisements in trade journals or other periodicals 21.21 the circulation of which is primarily within this state; 21.22 (5) advertisements in a Minnesota edition of a national or 21.23 regional publication or a limited regional edition in which this 21.24 state is included as part of a broader regional or national 21.25 publication which are not placed in other geographically defined 21.26 editions of the same issue of the same publication; 21.27 (6) advertisements in regional or national publications in 21.28 an edition which is not by its contents geographically targeted 21.29 to Minnesota but which is sold over the counter in Minnesota or 21.30 by subscription to Minnesota residents; 21.31 (7) advertisements broadcast on a radio or television 21.32 station located in Minnesota; or 21.33 (8) any other solicitation by telegraphy, telephone, 21.34 computer database, cable, optic, microwave, or other 21.35 communication system. 21.36 This paragraph (a) must be construed without regard to the 22.1 state from which distribution of the materials originated or in 22.2 which they were prepared. 22.3 (b) The location of vendors independent of the retailer 22.4 that provide products or services to the retailer in connection 22.5 with its solicitation of customers within this state, including 22.6 such products and services as creation of copy, printing, 22.7 distribution, and recording, is not considered in determining 22.8 whether the retailer is required to collect tax. 22.9 (c) A retailer not maintaining a place of business in this 22.10 state is presumed, subject to rebuttal, to be engaged in regular 22.11 solicitation within this state if it engages in any of the 22.12 activities in paragraph (a) and: 22.13 (1) makes 100 or more retail sales from outside this state 22.14 to destinations in this state during a period of 12 consecutive 22.15 months; or 22.16 (2) makes ten or more retail sales totaling more than 22.17 $100,000 from outside this state to destinations in this state 22.18 during a period of 12 consecutive months. 22.19 Sec. 10. [297A.665] [PRESUMPTION OF TAX; BURDEN OF PROOF.] 22.20 (a) For the purpose of the proper administration of this 22.21 chapter and to prevent evasion of the tax, until the contrary is 22.22 established, it is presumed that: 22.23 (1) all gross receipts are subject to the tax; and 22.24 (2) all retail sales for delivery in Minnesota are for 22.25 storage, use, or other consumption in Minnesota. 22.26 (b) The burden of proving that a sale is not a retail sale 22.27 is on the seller. However, the seller may take from the 22.28 purchaser at the time of the sale an exemption certificate 22.29 claiming that the property purchased is for resale or that the 22.30 sale is otherwise exempt from the tax imposed by this chapter. 22.31 A seller claiming that certain sales are exempt, who does not 22.32 possess the required exemption certificates, must acquire the 22.33 certificates within 60 days after receiving written notice from 22.34 the commissioner that the certificates are required. If the 22.35 certificates are not obtained within the 60-day period, the 22.36 sales are considered taxable sales under this chapter. 23.1 (c) A purchaser of tangible personal property or any items 23.2 listed in section 297A.63 that are shipped or brought to 23.3 Minnesota by the purchaser has the burden of proving that the 23.4 property was not purchased from a retailer for storage, use, or 23.5 consumption in Minnesota. 23.6 EXEMPTIONS 23.7 Sec. 11. [297A.67] [GENERAL EXEMPTIONS.] 23.8 Subdivision 1. [SCOPE.] The gross receipts from the sale 23.9 and purchase of, and storage, distribution, use, or consumption 23.10 of the items contained in this section are specifically exempted 23.11 from the taxes imposed by this chapter. 23.12 Subd. 2. [FOOD PRODUCTS.] Food products including, but not 23.13 limited to, cereal and cereal products, butter, cheese, milk and 23.14 milk products, oleomargarine, meat and meat products, fish and 23.15 fish products, eggs and egg products, vegetables and vegetable 23.16 products, fruit and fruit products, spices and salt, sugar and 23.17 sugar products, coffee and coffee substitutes, tea, and cocoa 23.18 and cocoa products are exempt. 23.19 Subd. 3. [FOOD STAMPS.] Tangible personal property 23.20 purchased with food stamps, coupons, or vouchers issued by the 23.21 federal government under the Food Stamp Program is exempt. This 23.22 exemption also applies to food purchased under the Special 23.23 Supplemental Food Program for Women, Infants, and Children. The 23.24 exemption provided by this subdivision is effective and applies 23.25 only to the extent required by federal law. 23.26 Subd. 4. [EXEMPT MEALS AT RESIDENTIAL FACILITIES.] Meals 23.27 or drinks served to patients, inmates, or persons residing at 23.28 hospitals, sanitariums, nursing homes, senior citizen homes, and 23.29 correctional, detention, and detoxification facilities are 23.30 exempt. 23.31 Subd. 5. [EXEMPT MEALS AT SCHOOLS.] Meals and lunches 23.32 served at public and private schools, universities, or colleges 23.33 are exempt. 23.34 Subd. 6. [OTHER EXEMPT MEALS.] Meals or drinks purchased 23.35 for and served exclusively to individuals who are 60 years of 23.36 age or over and their spouses or to handicapped persons and 24.1 their spouses by governmental agencies, nonprofit organizations, 24.2 or churches, or pursuant to any program funded in whole or in 24.3 part through United States Code, title 42, sections 3001 through 24.4 3045, wherever delivered, prepared, or served, are exempt. 24.5 Subd. 7. [MEDICINES; MEDICAL DEVICES.] (a) Prescribed 24.6 drugs and medicine, and insulin, intended for internal or 24.7 external use, in the cure, mitigation, treatment, or prevention 24.8 of illness or disease in human beings are exempt. "Prescribed 24.9 drugs and medicine" includes over-the-counter drugs or medicine 24.10 prescribed by a licensed physician. 24.11 (b) Nonprescription medicines consisting principally 24.12 (determined by the weight of all ingredients) of analgesics that 24.13 are approved by the United States Food and Drug Administration 24.14 for internal use by human beings are exempt. For purposes of 24.15 this subdivision, "principally" means greater than 50 percent 24.16 analgesics by weight. 24.17 (c) Prescription glasses, hospital beds, fever 24.18 thermometers, reusable finger-pricking devices for the 24.19 extraction of blood, blood glucose monitoring machines, and 24.20 other diagnostic agents used in diagnosing, monitoring, or 24.21 treating diabetes, and therapeutic and prosthetic devices are 24.22 exempt. "Therapeutic devices" means devices that are attached 24.23 or applied to the human body to cure, heal, or alleviate injury, 24.24 illness, or disease, either directly or by administering a 24.25 curative agent. "Prosthetic devices" means devices that replace 24.26 injured, diseased, or missing parts of the human body, either 24.27 temporarily or permanently. 24.28 Subd. 8. [CLOTHING.] Clothing and wearing apparel, 24.29 including sewing materials to be directly incorporated into 24.30 wearing apparel, are exempt. For purposes of this subdivision, 24.31 clothing and wearing apparel do not include the following: 24.32 (1) articles designed primarily for use while engaging in a 24.33 specific sport or recreational activity that are not also worn 24.34 for general use; 24.35 (2) articles designed primarily to provide safety or 24.36 protection against injury while the user is engaged in 25.1 industrial or general job activities; 25.2 (3) all articles commonly or commercially known as jewelry 25.3 including, but not limited to, watches; 25.4 (4) nonprescription optical glasses of any sort; 25.5 (5) articles made entirely of fur on the hide or pelt, or 25.6 partially of such fur if the value of the fur is more than three 25.7 times the value of the next most valuable component material; 25.8 (6) perfume, lotions, creams, dyes, or other substances 25.9 that are applied to the skin or the hair; and 25.10 (7) luggage, bags, purses, wallets, or cases of any sort. 25.11 Subd. 9. [BABY PRODUCTS.] (a) Products, such as lotion, 25.12 creams, ointments, oil, powder, or shampoo, and other articles 25.13 designed for application to the hair or skin of babies are 25.14 exempt. 25.15 (b) Baby bottles and nipples, pacifiers, teething rings, 25.16 thumb sucking preventatives, and infant syringes are exempt. 25.17 Subd. 10. [CASKETS; VAULTS.] Caskets and burial vaults for 25.18 human burial are exempt. 25.19 Subd. 11. [AUTOMOBILES; DISABLED VETERANS.] Automobiles or 25.20 other conveyances are exempt if the purchaser is assisted by a 25.21 grant from the United States in accordance with United States 25.22 Code, title 38, section 3902. 25.23 Subd. 12. [PARTS AND ACCESSORIES USED TO MAKE A MOTOR 25.24 VEHICLE HANDICAPPED ACCESSIBLE.] Parts, accessories, and labor 25.25 charges that are used solely to modify a motor vehicle to make 25.26 it handicapped accessible are exempt. 25.27 Subd. 13. [TEXTBOOKS.] Textbooks that are prescribed for 25.28 use in conjunction with a course of study in a school, college, 25.29 university, and private career school to students who are 25.30 regularly enrolled at such institutions are exempt. For 25.31 purposes of this subdivision (1) a "school" is as defined in 25.32 section 120A.22, subdivision 4; and (2) "private career school" 25.33 means a school licensed under section 141.25. 25.34 Subd. 14. [PERSONAL COMPUTERS PRESCRIBED FOR USE BY 25.35 SCHOOL.] Personal computers and related computer software sold 25.36 by a school, college, university, or private career school to 26.1 students who are enrolled at the institutions are exempt if: 26.2 (1) the use of the personal computer, or of a substantially 26.3 similar model of computer, and the related computer software is 26.4 prescribed by the institution in conjunction with a course of 26.5 study; and 26.6 (2) each student of the institution, or of a unit of the 26.7 institution in which the student is enrolled, is required by the 26.8 institution to have such a personal computer and related 26.9 software as a condition of enrollment. 26.10 For the purposes of this subdivision, "school" and "private 26.11 career school" have the meanings given in subdivision 13. 26.12 Subd. 15. [RESIDENTIAL HEATING FUELS.] Residential heating 26.13 fuels are exempt as follows: 26.14 (1) all fuel oil, coal, wood, steam, hot water, propane 26.15 gas, and L.P. gas sold to residential customers for residential 26.16 use; 26.17 (2) for the billing months of November, December, January, 26.18 February, March, and April, natural gas sold for residential use 26.19 to customers who are metered and billed as residential users and 26.20 who use natural gas for their primary source of residential 26.21 heat; and 26.22 (3) for the billing months of November, December, January, 26.23 February, March, and April, electricity sold for residential use 26.24 to customers who are metered and billed as residential users and 26.25 who use electricity for their primary source of residential heat. 26.26 Subd. 16. [RESIDENTIAL WATER SERVICES.] Water services for 26.27 residential use are exempt regardless of how the services are 26.28 billed. 26.29 Subd. 17. [FEMININE HYGIENE PRODUCTS.] Sanitary napkins, 26.30 tampons, or similar items used for feminine hygiene are exempt. 26.31 Subd. 18. [USED MOTOR OILS.] Used motor oils are exempt. 26.32 Subd. 19. [CROSS-COUNTRY SKI PASSES.] Cross-country ski 26.33 passes issued under sections 85.40 to 85.43 are exempt. 26.34 Subd. 20. [MANUFACTURED HOMES.] Manufactured homes, as 26.35 defined in section 327.31, subdivision 6, to be used by the 26.36 purchaser for residential purposes are exempt, unless the sale 27.1 is the first retail sale of the manufactured home in this state. 27.2 Subd. 21. [DE MINIMIS EXEMPTION.] A purchase subject to 27.3 use tax under section 297A.63 is exempt if (1) the purchase is 27.4 made by an individual for personal use, and (2) the total 27.5 purchases that are subject to the use tax do not exceed $770 in 27.6 the calendar year. For purposes of this subdivision, "personal 27.7 use" includes purchases for gifts. If an individual makes 27.8 purchases subject to use tax of more than $770 in the calendar 27.9 year, the individual must pay the use tax on the entire amount. 27.10 This exemption does not apply to purchases made from retailers 27.11 who are required or registered to collect taxes under this 27.12 chapter. 27.13 Subd. 22. [PROPERTY BROUGHT INTO MINNESOTA BY 27.14 NONRESIDENT.] All articles of tangible personal property brought 27.15 into Minnesota by a person who was a nonresident of this state 27.16 immediately prior to bringing such property into this state for 27.17 the person's use, storage, or consumption are exempt from the 27.18 use tax imposed by section 297A.63. 27.19 Subd. 23. [OCCASIONAL SALES.] Isolated and occasional 27.20 sales in Minnesota not made in the normal course of business, 27.21 and the storage, use, or consumption of property or services 27.22 resulting from such sales, are exempt. 27.23 Subd. 24. [CONSTITUTIONAL PROHIBITIONS.] The gross 27.24 receipts from the sale of and the storage, use, or other 27.25 consumption in Minnesota of tangible personal property, tickets, 27.26 or admissions, electricity, gas, or local exchange telephone 27.27 service, that the state of Minnesota is prohibited from taxing 27.28 under the Constitution or laws of the United States or under the 27.29 Constitution of Minnesota, are exempt. 27.30 Sec. 12. [297A.68] [BUSINESS EXEMPTIONS.] 27.31 Subdivision 1. [SCOPE.] The gross receipts from the sale 27.32 of, and storage, distribution, use, or consumption of the items 27.33 contained in this section are specifically exempted from the 27.34 taxes imposed by this chapter. 27.35 Subd. 2. [MATERIALS CONSUMED IN PRODUCTION.] (a) Materials 27.36 stored, used, or consumed in industrial production of personal 28.1 property intended to be sold ultimately at retail are exempt, 28.2 whether or not the item so used becomes an ingredient or 28.3 constituent part of the property produced. Materials that 28.4 qualify for this exemption include, but are not limited to, the 28.5 following: 28.6 (1) chemicals, including chemicals used for cleaning food 28.7 processing machinery and equipment; 28.8 (2) materials, including chemicals, fuels, and electricity 28.9 purchased by persons engaged in industrial production to treat 28.10 waste generated as a result of the production process; 28.11 (3) fuels, electricity, gas, and steam used or consumed in 28.12 the production process, except that electricity, gas, or steam 28.13 used for space heating or lighting is exempt only if it is 28.14 necessary to produce that particular industrial product; 28.15 (4) petroleum products and lubricants; 28.16 (5) packaging materials, including returnable containers 28.17 used in packaging food and beverage products; 28.18 (6) accessory tools, equipment, and other items that are 28.19 separate detachable units with an ordinary useful life of less 28.20 than 12 months used in producing a direct effect upon the 28.21 product; and 28.22 (7) the following materials, tools, and equipment used in 28.23 metalcasting: crucibles, thermocouple protection sheaths and 28.24 tubes, stalk tubes, refractory materials, molten metal filters 28.25 and filter boxes, and degassing lances. 28.26 (b) This exemption does not include: 28.27 (1) machinery, equipment, implements, tools, accessories, 28.28 appliances, contrivances and furniture and fixtures, except 28.29 those listed in paragraph (a), clause (6); and 28.30 (2) petroleum and special fuels used in producing or 28.31 generating power for propelling ready-mixed concrete trucks on 28.32 the public highways of this state. 28.33 (c) Industrial production includes, but is not limited to, 28.34 research, development, design or production of any tangible 28.35 personal property, manufacturing, processing (other than by 28.36 restaurants and consumers) of agricultural products (whether 29.1 vegetable or animal), commercial fishing, refining, smelting, 29.2 reducing, brewing, distilling, printing, mining, quarrying, 29.3 lumbering, generating electricity and the production of road 29.4 building materials. Industrial production does not include 29.5 painting, cleaning, repairing or similar processing of property 29.6 except as part of the original manufacturing process. 29.7 Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE 29.8 SERVICES.] (a) Materials stored, used, or consumed in providing 29.9 a taxable service listed in section 297A.61, subdivision 16, 29.10 paragraph (g), intended to be sold ultimately at retail are 29.11 exempt. 29.12 (b) This exemption includes, but is not limited to: 29.13 (1) chemicals, lubricants, packaging materials, seeds, 29.14 trees, fertilizers, and herbicides, if these items are used or 29.15 consumed in providing the taxable service; 29.16 (2) chemicals used to treat waste generated as a result of 29.17 providing the taxable service; 29.18 (3) accessory tools, equipment, and other items that are 29.19 separate detachable units used in providing the service and that 29.20 have an ordinary useful life of less than 12 months; and 29.21 (4) fuel, electricity, gas, and steam used or consumed in 29.22 the production process, except that electricity, gas, or steam 29.23 used for space heating or lighting is exempt only if it is 29.24 necessary to produce that particular taxable service. 29.25 (c) This exemption does not include machinery, equipment, 29.26 implements, tools, accessories, appliances, contrivances, 29.27 furniture, and fixtures used in providing the taxable service. 29.28 Subd. 4. [TACONITE PRODUCTION MATERIALS.] Mill liners, 29.29 grinding rods, and grinding balls that are substantially 29.30 consumed in the production of taconite are exempt when sold to 29.31 or stored, used, or consumed by persons taxed under the in-lieu 29.32 provisions of chapter 298. 29.33 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 29.34 exempt. The tax must be imposed and collected as if the rate 29.35 under section 297A.62, subdivision 1, applied, and then refunded 29.36 in the manner provided in section 297A.75. 30.1 "Capital equipment" means machinery and equipment purchased 30.2 or leased and used in this state by the purchaser or lessee 30.3 primarily for manufacturing, fabricating, mining, or refining 30.4 tangible personal property to be sold ultimately at retail. 30.5 Capital equipment means machinery and equipment essential 30.6 to the integrated production process. Capital equipment also 30.7 includes machinery and equipment used to electronically transmit 30.8 results retrieved by a customer of an online computerized data 30.9 retrieval system. 30.10 (b) Capital equipment includes, but is not limited to: 30.11 (1) machinery and equipment used to operate, control, or 30.12 regulate the production equipment; 30.13 (2) machinery and equipment used for research and 30.14 development, design, quality control, and testing activities; 30.15 (3) environmental control devices that are used to maintain 30.16 conditions such as temperature, humidity, light, or air pressure 30.17 when those conditions are essential to and are part of the 30.18 production process; 30.19 (4) materials and supplies used to construct and install 30.20 machinery or equipment; 30.21 (5) repair and replacement parts, including accessories, 30.22 whether purchased as spare parts, repair parts, or as upgrades 30.23 or modifications to machinery or equipment; 30.24 (6) materials used for foundations that support machinery 30.25 or equipment; 30.26 (7) materials used to construct and install special purpose 30.27 buildings used in the production process; and 30.28 (8) ready-mixed concrete trucks in which the ready-mixed 30.29 concrete is mixed as part of the delivery process. 30.30 (c) Capital equipment does not include the following: 30.31 (1) motor vehicles taxed under chapter 297B; 30.32 (2) machinery or equipment used to receive or store raw 30.33 materials; 30.34 (3) building materials, except for materials included in 30.35 paragraph (b), clauses (6) and (7); 30.36 (4) machinery or equipment used for nonproduction purposes, 31.1 including, but not limited to, the following: plant security, 31.2 fire prevention, first aid, and hospital stations; support 31.3 operations or administration; pollution control; and plant 31.4 cleaning, disposal of scrap and waste, plant communications, 31.5 space heating, lighting, or safety; 31.6 (5) farm machinery and aquaculture production equipment as 31.7 defined by section 297A.61, subdivisions 12 and 13; 31.8 (6) machinery or equipment purchased and installed by a 31.9 contractor as part of an improvement to real property; or 31.10 (7) any other item that is not essential to the integrated 31.11 process of manufacturing, fabricating, mining, or refining. 31.12 (d) For purposes of this subdivision: 31.13 (1) "Machinery" means mechanical, electronic, or electrical 31.14 devices, including computers and computer software, that are 31.15 purchased or constructed to be used for the activities set forth 31.16 in paragraph (a). 31.17 (2) "Equipment" means independent devices or tools separate 31.18 from machinery, including computers and computer software, used 31.19 in operating, controlling, or regulating machinery and 31.20 equipment; and any subunit or assembly comprising a component of 31.21 any machinery or accessory or attachment parts of machinery, 31.22 such as tools, dies, jigs, patterns, and molds. 31.23 (3) "Primarily" means machinery and equipment used 50 31.24 percent or more of the time in an activity described in 31.25 paragraph (a). 31.26 (4) "Manufacturing" means an operation or series of 31.27 operations where raw materials are changed in form, composition, 31.28 or condition by machinery and equipment and which results in the 31.29 production of a new article of tangible personal property. For 31.30 purposes of this subdivision, "manufacturing" includes the 31.31 generation of electricity or steam to be sold at retail. 31.32 (5) "Fabricating" means to make, build, create, produce, or 31.33 assemble components or property to work in a new or different 31.34 manner. 31.35 (6) "Mining" means the extraction of minerals, ores, stone, 31.36 or peat. 32.1 (7) "Refining" means the process of converting a natural 32.2 resource to a product, including the treatment of water to be 32.3 sold at retail. 32.4 (8) "Integrated production process" means a process 32.5 beginning with the removal of raw materials from inventory 32.6 through the completion of the product, including packaging of 32.7 the product. 32.8 (9) "Online data retrieval system" means a system whose 32.9 cumulation of information is equally available and accessible to 32.10 all its customers. 32.11 (10) "Machinery and equipment used for pollution control" 32.12 means machinery and equipment used solely to eliminate, prevent, 32.13 or reduce pollution resulting from an activity described in 32.14 paragraph (a). 32.15 Subd. 6. [SPECIAL TOOLING.] Special tooling is exempt. 32.16 "Special tooling" means tools, dies, jigs, patterns, gauges, and 32.17 other special tools that have value and use only for the buyer 32.18 and for the use for which they are made. An item has value and 32.19 use only to the buyer if the item is not standard enough to be 32.20 stocked or ordered from a catalog or other sales literature, but 32.21 must be produced in accordance with special requirements 32.22 peculiar to the buyer and not common to someone else whose 32.23 conditions for possible use of the material are reasonably 32.24 similar to the buyer's. 32.25 Subd. 7. [AIR COOLING EQUIPMENT.] Equipment used for air 32.26 cooling is exempt, if the equipment is purchased for conversion 32.27 or replacement of an existing groundwater-based once-through 32.28 cooling system as required under section 103G.271, subdivision 5. 32.29 Subd. 8. [POLLUTION CONTROL EQUIPMENT.] Pollution control 32.30 equipment purchased by a steel reprocessing firm is exempt if 32.31 the equipment is necessary to meet state or federal emission 32.32 standards. For purposes of this subdivision: 32.33 (1) "pollution control equipment" means equipment used for 32.34 the purpose of eliminating, preventing, or reducing air, land, 32.35 or water pollution during or as a result of the manufacturing 32.36 process; and 33.1 (2) "steel reprocessing firm" means a firm whose primary 33.2 business is the recovery of steel from automobiles, appliances, 33.3 and other steel products and the rerefining of this recovered 33.4 metal into new steel products. 33.5 Subd. 9. [SUPER BOWL ADMISSIONS.] The granting of the 33.6 privilege of admission to a world championship football game 33.7 sponsored by the national football league is exempt. 33.8 Subd. 10. [PUBLICATIONS; PUBLICATION MATERIALS.] Tangible 33.9 personal property that is used or consumed in producing any 33.10 publication regularly issued at average intervals not exceeding 33.11 three months is exempt, and any such publication is exempt. 33.12 "Publication" includes, but is not limited to, a qualified 33.13 newspaper as defined by section 331A.02, together with any 33.14 supplements or enclosures. "Publication" does not include 33.15 magazines and periodicals sold over the counter. Tangible 33.16 personal property that is used or consumed in producing a 33.17 publication does not include machinery, equipment, implements, 33.18 tools, accessories, appliances, contrivances, furniture, and 33.19 fixtures used in the publication, or fuel, electricity, gas, or 33.20 steam used for space heating or lighting. 33.21 Advertising contained in a publication is a nontaxable 33.22 service and is exempt. Persons who publish or sell newspapers 33.23 are engaging in a nontaxable service with respect to gross 33.24 receipts realized from such news-gathering or news-publishing 33.25 activities, including the sale of advertising. 33.26 Subd. 11. [ADVERTISING MATERIALS.] Material designed to 33.27 advertise and promote the sale of merchandise or services is 33.28 exempt if the material is purchased and stored for the purpose 33.29 of subsequently shipping or otherwise transferring outside the 33.30 state by the purchaser for later use solely outside the state of 33.31 Minnesota. Mailing and reply envelopes and cards used 33.32 exclusively in connection with these advertising and promotional 33.33 materials are included in this exemption regardless of where the 33.34 mailing occurs. 33.35 Subd. 12. [WIND ENERGY CONVERSION SYSTEMS.] Wind energy 33.36 conversion systems, as defined in section 216C.06, subdivision 34.1 12, that are used as an electric power source are exempt, and 34.2 the materials used to manufacture, install, construct, repair, 34.3 or replace them are exempt. 34.4 Subd. 13. [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible 34.5 personal property is exempt if the property, without 34.6 intermediate use, is: 34.7 (1) shipped or transported outside Minnesota by the 34.8 purchaser or is stored, processed, fabricated or manufactured 34.9 into, attached to or incorporated into other tangible personal 34.10 property that is transported or shipped outside Minnesota; and 34.11 (2) used in a trade or business outside Minnesota after 34.12 being shipped or transported outside of Minnesota, and is not 34.13 returned to Minnesota, except in the course of interstate 34.14 commerce; and 34.15 (3) either (i) not subject to tax in the state or country 34.16 to which it is transported for storage or use, or (ii) to be 34.17 used in other states or countries as part of a maintenance 34.18 contract. 34.19 (b) For purposes of this subdivision, storage or 34.20 processing, fabricating, manufacturing, attaching to, or 34.21 incorporating into other property is not intermediate use. 34.22 Subd. 14. [TEMPORARY STORAGE.] Tangible personal property 34.23 is exempt if all of the following conditions are met: 34.24 (1) it is shipped or brought into Minnesota by a common 34.25 carrier; 34.26 (2) without intermediate use, it is kept in a public 34.27 warehouse; 34.28 (3) it is kept for the purpose of being later transported 34.29 outside Minnesota; and 34.30 (4) after storage, it is used solely outside Minnesota, 34.31 except in the course of interstate commerce. 34.32 Subd. 15. [OUTSTATE DELIVERY BY SELLER.] Property is 34.33 exempt if: 34.34 (1) it is delivered in one of the following ways: 34.35 (i) delivery by the seller to a common carrier for delivery 34.36 outside Minnesota; 35.1 (ii) placement in the United States mail or parcel post 35.2 directed to the purchaser outside Minnesota; or 35.3 (iii) delivery to the purchaser outside Minnesota by means 35.4 of the seller's own delivery vehicles; and 35.5 (2) it is not later returned to a point within Minnesota, 35.6 except in the course of interstate commerce. 35.7 Subd. 16. [PACKING MATERIALS.] Packing materials used to 35.8 pack and ship household goods are exempt if the ultimate 35.9 destination of the goods is outside Minnesota and if the goods 35.10 are not later returned to a point within Minnesota, except in 35.11 the course of interstate commerce. 35.12 Subd. 17. [SHIPS USED IN INTERSTATE COMMERCE.] Repair, 35.13 replacement, and rebuilding parts and materials, and lubricants, 35.14 for ships or vessels used or to be used principally in 35.15 interstate or foreign commerce are exempt. Vessels with a gross 35.16 registered tonnage of at least 3,000 tons are exempt. 35.17 Subd. 18. [CUSTOM COMPUTER SOFTWARE.] The design, 35.18 development, writing, translation, fabrication, lease, or 35.19 transfer for a consideration of title or possession of a custom 35.20 computer program is exempt. "Custom computer program" means a 35.21 computer program prepared to the special order of the customer, 35.22 either in the form of written procedures or in the form of 35.23 storage media on which, or in which, the program is recorded, or 35.24 any required documentation or manuals designed to facilitate the 35.25 use of the custom computer program transferred. It includes 35.26 those services represented by separately stated charges for 35.27 modifications to an existing prewritten program that are 35.28 prepared to the special order of the customer. It does not 35.29 include a "canned" or prewritten computer program that is held 35.30 or existing for general or repeated sale or lease, even if the 35.31 prewritten or "canned" program was initially developed on a 35.32 custom basis or for in-house use. Modification to an existing 35.33 prewritten program to meet the customer's needs is custom 35.34 computer programming only to the extent of the modification. 35.35 Subd. 19. [PETROLEUM PRODUCTS.] The following petroleum 35.36 products are exempt: 36.1 (1) products upon which a tax has been imposed and paid 36.2 under chapter 296A, and for which no refund has been or will be 36.3 allowed because the buyer used the fuel for nonhighway use; 36.4 (2) products that are used in the improvement of 36.5 agricultural land by constructing, maintaining, and repairing 36.6 drainage ditches, tile drainage systems, grass waterways, water 36.7 impoundment, and other erosion control structures; 36.8 (3) products purchased by a transit system receiving 36.9 financial assistance under section 174.24 or 473.384; 36.10 (4) products used in a passenger snowmobile, as defined in 36.11 section 296A.01, subdivision 39, for off-highway business use as 36.12 part of the operations of a resort as provided under section 36.13 296A.16, subdivision 2, clause (2); or 36.14 (5) products purchased by a state or a political 36.15 subdivision of a state for use in motor vehicles exempt from 36.16 registration under section 168.012, subdivision 1, paragraph (b). 36.17 Subd. 20. [NATURAL GAS IN VEHICLES.] Natural gas to be 36.18 used as a fuel in vehicles propelled by natural gas is exempt. 36.19 Subd. 21. [SNOWMAKING.] Electricity used to make snow for 36.20 outdoor use for ski hills, ski slopes, or ski trails is exempt. 36.21 Subd. 22. [COPIES OF COURT REPORTER DOCUMENTS.] 36.22 Transcripts or copies of transcripts of verbatim testimony are 36.23 exempt if produced and sold by court reporters or other 36.24 transcribers of legal proceedings to individuals or entities 36.25 that are parties to or representatives of parties to the 36.26 proceeding to which the transcript relates. 36.27 Subd. 23. [AUTOMATIC FIRE-SAFETY SPRINKLER SYSTEMS.] 36.28 Automatic fire-safety sprinkler systems described in section 36.29 273.11, subdivision 6a, are exempt. 36.30 Subd. 24. [WASTE PROCESSING EQUIPMENT.] Equipment used for 36.31 processing solid or hazardous waste at a resource recovery 36.32 facility, as defined in section 115A.03, subdivision 28, is 36.33 exempt, including pollution control equipment at a resource 36.34 recovery facility that burns refuse-derived fuel or mixed 36.35 municipal solid waste as its primary fuel. 36.36 Subd. 25. [OCCASIONAL SALES.] (a) Isolated or occasional 37.1 sales of tangible personal property in Minnesota not made in the 37.2 normal course of business of selling that kind of property are 37.3 exempt. The storage, use, or consumption of property acquired 37.4 as a result of such a sale is exempt. 37.5 (b) This exemption applies to a sale of tangible personal 37.6 property primarily used in a trade or business only if one of 37.7 the following conditions are satisfied: (1) the sale occurs in 37.8 a transaction subject to or described in section 118, 331, 332, 37.9 336, 337, 338, 351, 355, 368, 721, 731, 1031, or 1033 of the 37.10 Internal Revenue Code; (2) the sale is between members of a 37.11 controlled group as defined in section 1563(a) of the Internal 37.12 Revenue Code; (3) the sale is a sale of farm machinery; (4) the 37.13 sale is a farm auction sale; (5) the sale is a sale of 37.14 substantially all of the assets of a trade or business; or (6) 37.15 the total amount of gross receipts from the sale of trade or 37.16 business property made during the calendar month of the sale and 37.17 the preceding 11 calendar months does not exceed $1,000. 37.18 (c) For purposes of this subdivision, the following terms 37.19 have the meanings given. 37.20 (1) A "farm auction" is a public auction conducted by a 37.21 licensed auctioneer if substantially all of the property sold 37.22 consists of property used in the trade or business of farming 37.23 and property not used primarily in a trade or business. 37.24 (2) "Trade or business" includes the assets of a separate 37.25 division, branch, or identifiable segment of a trade or business 37.26 if, before the sale, the income and expenses attributable to the 37.27 separate division, branch, or identifiable segment could be 37.28 separately ascertained from the books of account or record (the 37.29 lease or rental of an identifiable segment does not qualify for 37.30 the exemption). 37.31 (3) A "sale of substantially all of the assets of a trade 37.32 or business" must occur as a single transaction or a series of 37.33 related transactions within the 12-month period beginning on the 37.34 date of the first sale of assets intended to qualify for the 37.35 exemption provided in paragraph (b), clause (5). 37.36 Subd. 26. [INTERSTATE WATS LINES.] Long distance telephone 38.1 services are exempt if the service (1) consists of a wide area 38.2 telephone line that permits a long distance call to an 38.3 individual or business located in Minnesota to be made from a 38.4 location outside of Minnesota at no toll charge to the person 38.5 placing the call; or (2) entitles a customer, upon payment of a 38.6 periodic charge that is determined either as a flat amount or 38.7 upon the basis of total elapsed transmission time, to the 38.8 privilege of an unlimited number of long distance calls made 38.9 from a location in Minnesota to a location outside of Minnesota 38.10 if the customer is a qualified provider of telemarketing 38.11 services. As used in this subdivision, a "qualified provider of 38.12 telemarketing services" is a telemarketing firm that derives at 38.13 least 80 percent of its revenues from one or more of the 38.14 following activities: soliciting or providing information, 38.15 soliciting sales or receiving orders, and conducting research by 38.16 means of telegraph, telephone, computer database, fiber optic, 38.17 microwave, or other communication system. 38.18 Subd. 27. [MOTOR VEHICLES.] Motor vehicles taxable under 38.19 the provisions of chapter 297B are exempt. 38.20 Subd. 28. [MEDICAL SUPPLIES.] Medical supplies purchased 38.21 by a licensed health care facility or licensed health care 38.22 professional to provide medical treatment to residents or 38.23 patients are exempt. The exemption does not apply to medical 38.24 equipment or components of medical equipment, laboratory 38.25 supplies, radiological supplies, and other items used in 38.26 providing medical services. For purposes of this subdivision, 38.27 "medical supplies" means adhesive and nonadhesive bandages, 38.28 gauze pads and strips, cotton applicators, antiseptics, 38.29 nonprescription drugs, eye solution, and other similar supplies 38.30 used directly on the resident or patient in providing medical 38.31 services. 38.32 Subd. 29. [PRIZES.] Tangible personal property that will 38.33 be given as prizes to players in games of skill or chance is 38.34 exempt if the games are conducted at events such as community 38.35 festivals, fairs, and carnivals and if the events last less than 38.36 six days. This exemption does not apply to property awarded as 39.1 prizes in connection with lawful gambling as defined in section 39.2 349.12 or the state lottery. 39.3 Subd. 30. [TELEVISION COMMERCIALS.] Tangible personal 39.4 property primarily used or consumed in the preproduction, 39.5 production, or postproduction of a television commercial is 39.6 exempt. Any such commercial, regardless of the medium in which 39.7 it is transferred, is exempt. "Preproduction" and "production" 39.8 include, but are not limited to, all activities related to the 39.9 preparation for shooting and the shooting of television 39.10 commercials, including film processing. Equipment rented for 39.11 the preproduction and production activities is exempt. 39.12 "Postproduction" includes, but is not limited to, all activities 39.13 related to the finishing and duplication of television 39.14 commercials. This exemption does not apply to tangible personal 39.15 property used primarily in administration, general management, 39.16 or marketing. Machinery and equipment purchased for use in 39.17 producing such commercials and fuel, electricity, gas, or steam 39.18 used for space heating or lighting are not exempt under this 39.19 subdivision. 39.20 Subd. 31. [WASTE MANAGEMENT CONTAINERS AND 39.21 COMPACTORS.] Compactors and waste collection containers are 39.22 exempt if they are purchased by a waste management service 39.23 provider and are used in providing waste management services as 39.24 defined in section 297H.01, subdivision 12. A waste management 39.25 service provider that does not remit tax on customer charges or 39.26 lease or rental payments for compactors and waste collection 39.27 containers under chapter 297H is ineligible for this exemption. 39.28 Subd. 32. [EVENTS LOCATED OUTSIDE MINNESOTA.] Tickets or 39.29 admissions to places of amusement located outside Minnesota or 39.30 to athletic events to be held outside Minnesota are exempt. 39.31 Sec. 13. [297A.69] [AGRICULTURAL EXEMPTIONS.] 39.32 Subdivision 1. [SCOPE.] The gross receipts from the sale 39.33 of, and storage, distribution, use, or consumption of the items 39.34 contained in this section are specifically exempted from the 39.35 taxes imposed by this chapter. 39.36 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 40.1 (a) Materials stored, used, or consumed in agricultural 40.2 production of personal property intended to be sold ultimately 40.3 at retail are exempt, whether or not the item becomes an 40.4 ingredient or constituent part of the property produced. 40.5 Materials that qualify for this exemption include, but are not 40.6 limited to, the following: 40.7 (1) feeds, seeds, trees, fertilizers, and herbicides, 40.8 including when purchased for use by farmers in a federal or 40.9 state farm or conservation program; 40.10 (2) materials sold to a veterinarian to be used or consumed 40.11 in the care, medication, and treatment of agricultural 40.12 production animals and horses; 40.13 (3) chemicals, including chemicals used for cleaning food 40.14 processing machinery and equipment; 40.15 (4) materials, including chemicals, fuels, and electricity 40.16 purchased by persons engaged in agricultural production to treat 40.17 waste generated as a result of the production process; 40.18 (5) fuels, electricity, gas, and steam used or consumed in 40.19 the production process, except that electricity, gas, or steam 40.20 used for space heating or lighting is exempt only if it is 40.21 necessary to produce that particular agricultural product; 40.22 (6) petroleum products and lubricants; 40.23 (7) packaging materials, including returnable containers 40.24 used in packaging food and beverage products; and 40.25 (8) accessory tools and equipment that are separate 40.26 detachable units with an ordinary useful life of less than 12 40.27 months used in producing a direct effect upon the product. 40.28 Machinery, equipment, implements, tools, accessories, 40.29 appliances, contrivances, and furniture and fixtures, except 40.30 those listed in this clause are not included within this 40.31 exemption. 40.32 (b) For purposes of this subdivision, "agricultural 40.33 production" includes, but is not limited to, horticulture, 40.34 floriculture, and the raising of pets, fur-bearing animals, 40.35 research animals, horses, farmed cervidae as defined in section 40.36 17.451, subdivision 2, llamas as defined in section 17.455, 41.1 subdivision 2, and ratitae as defined in section 17.453, 41.2 subdivision 3. 41.3 Subd. 3. [FARM MACHINERY REPAIR PARTS.] Repair and 41.4 replacement parts, except tires, used for maintenance or repair 41.5 of farm machinery are exempt, if the part replaces a farm 41.6 machinery part assigned a specific or generic part number by the 41.7 manufacturer of the farm machinery. 41.8 Subd. 4. [FARM MACHINERY.] Farm machinery is exempt. 41.9 Subd. 5. [USED FARM TIRES.] The first $5,000 of gross 41.10 receipts from the sales of used, remanufactured, or repaired 41.11 tires for farm machinery, by a sole proprietor, in a calendar 41.12 year are exempt if: 41.13 (1) the seller had gross receipts from all sales of less 41.14 than $10,000 in the previous year; and 41.15 (2) the tires are not retreaded. 41.16 Subd. 6. [HORSES; RELATED MATERIALS.] (a) Horses, 41.17 including racehorses, are exempt. 41.18 (b) Materials, including feed and bedding, used or consumed 41.19 in the breeding, raising, owning, boarding, and keeping of 41.20 horses are exempt. Machinery, equipment, implements, tools, 41.21 appliances, furniture, and fixtures used in the breeding, 41.22 raising, owning, boarding, and keeping of horses are not 41.23 included within this exemption. 41.24 Sec. 14. [297A.70] [EXEMPTIONS FOR GOVERNMENTS AND 41.25 NONPROFIT GROUPS.] 41.26 Subdivision 1. [SCOPE.] (a) The gross receipts from sales 41.27 of items to or by, and storage, distribution, use, or 41.28 consumption of items by the organizations listed in this section 41.29 are specifically exempted from the taxes imposed by this chapter. 41.30 (b) Notwithstanding any law to the contrary enacted before 41.31 1992, only sales to governments and political subdivisions 41.32 listed in this section are exempt from the taxes imposed by this 41.33 chapter. 41.34 (c) "Sales" includes purchases under an installment 41.35 contract or lease purchase agreement under section 465.71. 41.36 Subd. 2. [SALES TO GOVERNMENT.] (a) All sales, except 42.1 those listed in paragraph (b), to the following governments and 42.2 political subdivisions, or to the listed agencies or 42.3 instrumentalities of governments and political subdivisions, are 42.4 exempt: 42.5 (1) the United States and its agencies and 42.6 instrumentalities; 42.7 (2) school districts, the University of Minnesota, state 42.8 universities, community colleges, technical colleges, state 42.9 academies, the Perpich Minnesota center for arts education, and 42.10 an instrumentality of a political subdivision that is accredited 42.11 as an optional/special function school by the North Central 42.12 Association of Colleges and Schools; 42.13 (3) hospitals and nursing homes owned and operated by 42.14 political subdivisions of the state; 42.15 (4) other states or political subdivisions of other states, 42.16 if the sale would be exempt from taxation if it occurred in that 42.17 state; and 42.18 (5) sales to public libraries, public library systems, 42.19 multicounty, multitype library systems as defined in section 42.20 134.001, county law libraries under chapter 134A, the state 42.21 library under section 480.09, and the legislative reference 42.22 library. 42.23 (b) This exemption does not apply to the sales of the 42.24 following products and services: 42.25 (1) building, construction, or reconstruction materials 42.26 purchased by a contractor or a subcontractor as a part of a 42.27 lump-sum contract or similar type of contract with a guaranteed 42.28 maximum price covering both labor and materials for use in the 42.29 construction, alteration, or repair of a building or facility; 42.30 (2) construction materials purchased by tax exempt entities 42.31 or their contractors to be used in constructing buildings or 42.32 facilities which will not be used principally by the tax exempt 42.33 entities; 42.34 (3) the leasing of a motor vehicle as defined in section 42.35 297B.01, subdivision 5, except for leases entered into by the 42.36 United States or its agencies or instrumentalities; or 43.1 (4) meals and lodging as defined under section 297A.61, 43.2 subdivisions 3, paragraph (d), and 16, paragraph (c), except for 43.3 meals and lodging purchased directly by the United States or its 43.4 agencies or instrumentalities. 43.5 (c) As used in this subdivision, "school districts" means 43.6 public school entities and districts of every kind and nature 43.7 organized under the laws of the state of Minnesota, and any 43.8 instrumentality of a school district, as defined in section 43.9 471.59. 43.10 Subd. 3. [SALES OF CERTAIN GOODS AND SERVICES TO 43.11 GOVERNMENT.] (a) The following sales to or use by the specified 43.12 governments and political subdivisions of the state are exempt: 43.13 (1) supplies and equipment used to provide medical care in 43.14 the operation of an ambulance service owned and operated by a 43.15 political subdivision of the state; 43.16 (2) repair and replacement parts for emergency rescue 43.17 vehicles, fire trucks, and fire apparatus to a political 43.18 subdivision; 43.19 (3) machinery and equipment, except for motor vehicles, 43.20 used directly for mixed municipal solid waste management 43.21 services at a solid waste disposal facility as defined in 43.22 section 115A.03, subdivision 10; 43.23 (4) chore and homemaking services to a political 43.24 subdivision of the state to be provided to elderly or disabled 43.25 individuals; 43.26 (5) telephone services to the department of administration 43.27 that are used to provide telecommunications services through the 43.28 intertechnologies revolving fund; 43.29 (6) firefighter personal protective equipment as defined in 43.30 paragraph (b), if purchased or authorized by and for the use of 43.31 an organized fire department, fire protection district, or fire 43.32 company regularly charged with the responsibility of providing 43.33 fire protection to the state or a political subdivision; 43.34 (7) bullet-resistant body armor that provides the wearer 43.35 with ballistic and trauma protection, if purchased by a law 43.36 enforcement agency of the state or a political subdivision of 44.1 the state, or a licensed peace officer, as defined in section 44.2 626.84, subdivision 1; 44.3 (8) motor vehicles purchased or leased by political 44.4 subdivisions of the state if the vehicles are exempt from 44.5 registration under section 168.012, subdivision 1, paragraph 44.6 (b); 44.7 (9) equipment designed to process, dewater, and recycle 44.8 biosolids for wastewater treatment facilities of political 44.9 subdivisions, and materials incidental to installation of that 44.10 equipment; and materials used to construct buildings to house 44.11 the equipment, if the materials are purchased after June 30, 44.12 1998, and before July 1, 2001; and 44.13 (10) sales to a town of gravel and of machinery, equipment, 44.14 and accessories, except motor vehicles, used exclusively for 44.15 road and bridge maintenance, and leases by a town of motor 44.16 vehicles exempt from tax under section 297B.03, clause (10). 44.17 (b) For purposes of this subdivision, "firefighters 44.18 personal protective equipment" means helmets, including face 44.19 shields, chin straps, and neck liners; bunker coats and pants, 44.20 including pant suspenders; boots; gloves; head covers or hoods; 44.21 wildfire jackets; protective coveralls; goggles; self-contained 44.22 breathing apparatus; canister filter masks; personal alert 44.23 safety systems; spanner belts; optical or thermal imaging search 44.24 devices; and all safety equipment required by the Occupational 44.25 Safety and Health Administration. 44.26 Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales, 44.27 except those listed in paragraph (b), to the following 44.28 "nonprofit organizations" are exempt: 44.29 (1) an entity organized and operated exclusively for 44.30 charitable, religious, or educational purposes if the item 44.31 purchased is used in the performance of charitable, religious, 44.32 or educational functions; 44.33 (2) any senior citizen group or association of groups that: 44.34 (i) in general limits membership to persons who are either 44.35 age 55 or older, or physically disabled; and 44.36 (ii) is organized and operated exclusively for pleasure, 45.1 recreation, and other nonprofit purposes, no part of the net 45.2 earnings of which inures to the benefit of any private 45.3 shareholders; and 45.4 (3) an entity organized and operated exclusively to 45.5 maintain a cemetery owned by a religious organization. 45.6 (b) This exemption does not apply to the following sales: 45.7 (1) building, construction, or reconstruction materials 45.8 purchased by a contractor or a subcontractor as a part of a 45.9 lump-sum contract or similar type of contract with a guaranteed 45.10 maximum price covering both labor and materials for use in the 45.11 construction, alteration, or repair of a building or facility; 45.12 (2) construction materials purchased by tax-exempt entities 45.13 or their contractors to be used in constructing buildings or 45.14 facilities that will not be used principally by the tax-exempt 45.15 entities; and 45.16 (3) meals and lodging as defined under section 297A.61, 45.17 subdivisions 3, paragraph (d), and 16, paragraph (c); and 45.18 (4) leasing of a motor vehicle as defined in section 45.19 297B.01, subdivision 5. 45.20 Subd. 5. [VETERANS GROUPS.] Sales to an organization of 45.21 military service veterans or an auxiliary unit of an 45.22 organization of military service veterans are exempt if: 45.23 (1) the organization or auxiliary unit is organized within 45.24 the state of Minnesota and is exempt from federal taxation under 45.25 section 501(c), clause (19), of the Internal Revenue Code; and 45.26 (2) the tangible personal property is for charitable, 45.27 civic, educational, or nonprofit uses and not for social, 45.28 recreational, pleasure, or profit uses. 45.29 Subd. 6. [AMBULANCES.] The lease of a motor vehicle for 45.30 use as an ambulance by an ambulance service licensed under 45.31 section 144E.10 is exempt. 45.32 Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a) 45.33 Sales, except for those listed in paragraph (c), to a hospital 45.34 are exempt, if the items purchased are used in providing 45.35 hospital services. For purposes of this subdivision, "hospital" 45.36 means a hospital organized and operated for charitable purposes 46.1 within the meaning of section 501(c)(3) of the Internal Revenue 46.2 Code, and licensed under chapter 144 or by any other 46.3 jurisdiction, and "hospital services" are services authorized or 46.4 required to be performed by a "hospital" under chapter 144. 46.5 (b) Sales, except for those listed in paragraph (c), to an 46.6 outpatient surgical center are exempt, if the items purchased 46.7 are used in providing outpatient surgical services. For 46.8 purposes of this subdivision, "outpatient surgical center" means 46.9 an outpatient surgical center organized and operated for 46.10 charitable purposes within the meaning or section 501(c)(3) of 46.11 the Internal Revenue Code, and licensed under chapter 144 or by 46.12 any other jurisdiction. For the purposes of this subdivision, 46.13 "outpatient surgical services" means: (1) services authorized 46.14 or required to be performed by an outpatient surgical center 46.15 under chapter 144 or under the applicable licensure law of any 46.16 other jurisdiction; and (2) urgent care. For purposes of this 46.17 subdivision, "urgent care" means health services furnished to a 46.18 person whose medical condition is sufficiently acute to require 46.19 treatment unavailable through, or inappropriate to be provided 46.20 by, a clinic or physician's office, but not so acute as to 46.21 require treatment in a hospital emergency room. 46.22 (c) This exemption does not apply to the following products 46.23 and services: 46.24 (1) purchases made by a clinic, physician's office, or any 46.25 other medical facility not operating as a hospital or outpatient 46.26 surgical center, even though the clinic, office, or facility may 46.27 be owned and operated by a hospital or outpatient surgical 46.28 center; 46.29 (2) sales under section 297A.61, subdivisions 3, paragraph 46.30 (d), and 16, paragraph (c); 46.31 (3) building and construction materials used in 46.32 constructing buildings or facilities that will not be used 46.33 principally by the hospital or outpatient surgical center; 46.34 (4) building, construction, or reconstruction materials 46.35 purchased by a contractor or a subcontractor as a part of a 46.36 lump-sum contract or similar type of contract with a guaranteed 47.1 maximum price covering both labor and materials for use in the 47.2 construction, alteration, or repair of a hospital or outpatient 47.3 surgical center; or 47.4 (5) the leasing of a motor vehicle as defined in section 47.5 297B.01, subdivision 5. 47.6 Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION 47.7 SYSTEM; PRODUCT AND SERVICES.] Products and services including, 47.8 but not limited to, end user equipment used for construction, 47.9 ownership, operation, maintenance, and enhancement of the 47.10 backbone system of the regionwide public safety radio 47.11 communication system established under sections 473.891 to 47.12 473.905, are exempt. For purposes of this subdivision, backbone 47.13 system is defined in section 473.891, subdivision 9. This 47.14 subdivision is effective for purchases, sales, storage, use, or 47.15 consumption occurring before August 1, 2003. 47.16 Subd. 9. [SACRAMENTAL WINE.] Wine for sacramental purposes 47.17 in religious ceremonies, as described in section 340A.316, is 47.18 exempt if the wine is purchased from a nonprofit religious 47.19 organization meeting the requirements of subdivision 4 or from a 47.20 person authorized to import sacramental wine without a license 47.21 as provided in section 340A.316. 47.22 Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] Tickets or 47.23 admissions to the premises of or events sponsored by an 47.24 organization that provides an opportunity for citizens of the 47.25 state to participate in the creation, performance, or 47.26 appreciation of the arts are exempt if the organization is 47.27 either (1) a tax-exempt organization within the meaning of 47.28 Minnesota Statutes 1980, section 290.05, subdivision 1, clause 47.29 (i), or (2) a municipal board that promotes cultural and arts 47.30 activities. The exemption provided with respect to a municipal 47.31 board applies only to tickets and admissions to events sponsored 47.32 by the board. 47.33 Subd. 11. [SCHOOL TICKETS OR ADMISSIONS.] Tickets or 47.34 admissions to regular season school games, events, and 47.35 activities are exempt. For purposes of this subdivision, 47.36 "school" has the meaning given it in section 120A.22, 48.1 subdivision 4. 48.2 Subd. 12. [YMCA, YWCA, AND JCC MEMBERSHIPS.] The sale of 48.3 memberships, meaning both one-time initiation fees and periodic 48.4 membership dues, to an association incorporated under section 48.5 315.44 or an organization defined under section 315.51, are 48.6 exempt. However, all separate charges made for the privilege of 48.7 having access to and the use of the association's sports and 48.8 athletic facilities are taxable. 48.9 Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT 48.10 GROUPS.] (a) The following sales by the specified organizations 48.11 for fundraising purposes are exempt, subject to the limitations 48.12 listed in paragraph (b): 48.13 (1) all sales made by an organization that exists solely 48.14 for the purpose of providing educational or social activities 48.15 for young people primarily age 18 and under; 48.16 (2) all sales made by an organization that is a senior 48.17 citizen group or association of groups if (i) in general it 48.18 limits membership to persons age 55 or older; (ii) it is 48.19 organized and operated exclusively for pleasure, recreation, and 48.20 other nonprofit purposes; and (iii) no part of its net earnings 48.21 inures to the benefit of any private shareholders; 48.22 (3) the sale or use of tickets or admissions to a golf 48.23 tournament held in Minnesota if the beneficiary of the 48.24 tournament's net proceeds qualifies as a tax-exempt organization 48.25 under section 501(c)(3) of the Internal Revenue Code; and 48.26 (4) sales of gum, candy, and candy products sold for 48.27 fundraising purposes by a nonprofit organization that provides 48.28 educational and social activities primarily for young people 18 48.29 years of age and under. 48.30 (b) The exemptions listed in paragraph (a) are limited in 48.31 the following manner: 48.32 (1) the exemption under paragraph (a), clauses (1) and (2), 48.33 applies only if the gross annual receipts of the organization 48.34 from fundraising do not exceed $10,000; and 48.35 (2) the exemption under paragraph (a), clause (1), does not 48.36 apply if the sales are derived from admission charges or from 49.1 activities for which the money must be deposited with the school 49.2 district treasurer under section 123B.49, subdivision 2, or be 49.3 recorded in the same manner as other revenues or expenditures of 49.4 the school district under section 123B.49, subdivision 4. 49.5 (c) For purposes of this subdivision, a club, association, 49.6 or other organization of elementary or secondary school students 49.7 organized for the purpose of carrying on sports, educational, or 49.8 other extracurricular activities is a separate organization from 49.9 the school district or school for purposes of applying the 49.10 $10,000 limit. 49.11 Subd. 14. [FUNDRAISING EVENTS SPONSORED BY NONPROFIT 49.12 GROUPS.] (a) Sales of tangible personal property at, and 49.13 admission charges for fundraising events sponsored by, a 49.14 nonprofit organization are exempt if the entire proceeds, less 49.15 the necessary expenses for the event, will be used solely and 49.16 exclusively for charitable, religious, or educational purposes. 49.17 Exempt sales include the sale of food, meals, drinks, and 49.18 taxable services at the fundraising event. 49.19 (b) This exemption is limited in the following manner: 49.20 (1) it does not apply to admission charges for events 49.21 involving bingo or other gambling activities or to charges for 49.22 use of amusement devices involving bingo or other gambling 49.23 activities; 49.24 (2) all gross receipts are taxable if the profits are not 49.25 used solely and exclusively for charitable, religious, or 49.26 educational purposes; 49.27 (3) it does not apply unless the organization keeps a 49.28 separate accounting record, including receipts and disbursements 49.29 from each fundraising event that documents all deductions from 49.30 gross receipts with receipts and other records; 49.31 (4) it does not apply to any sale made by or in the name of 49.32 a nonprofit corporation as the active or passive agent of a 49.33 person that is not a nonprofit corporation; 49.34 (5) all gross receipts are taxable if fundraising events 49.35 exceed 24 days per year; and 49.36 (6) it does not apply to fundraising events conducted on 50.1 premises leased for more than five days but less than 30 days. 50.2 (c) For purposes of this subdivision, a "nonprofit 50.3 organization" means any unit of government, corporation, 50.4 society, association, foundation, or institution organized and 50.5 operated for charitable, religious, educational, civic, 50.6 fraternal, and senior citizens' or veterans' purposes, no part 50.7 of the net earnings of which inures to the benefit of a private 50.8 individual. 50.9 Subd. 15. [STATEWIDE AMATEUR ATHLETIC GAMES.] 50.10 Notwithstanding section 297A.61, subdivision 3, or any other 50.11 provision of this chapter, the gross receipts from the following 50.12 sales made to or by a nonprofit corporation designated by the 50.13 Minnesota amateur sports commission to conduct a series of 50.14 statewide amateur athletic games and related events, workshops, 50.15 and clinics are exempt: 50.16 (1) sales of tangible personal property to or the storage, 50.17 use, or other consumption of tangible personal property by the 50.18 nonprofit corporation; and 50.19 (2) sales of tangible personal property, admission charges, 50.20 and sales of food, meals, and drinks by the nonprofit 50.21 corporation at fundraising events, athletic events, or athletic 50.22 facilities. 50.23 Subd. 16. [CAMP FEES.] Camp fees to camps or other 50.24 recreation facilities owned and operated by an exempt 50.25 organization under section 501(c)(3) of the Internal Revenue 50.26 Code are exempt if the camps or facilities provide educational 50.27 and social activities for young people primarily age 18 and 50.28 under. 50.29 Sec. 15. [297A.71] [CONSTRUCTION EXEMPTIONS.] 50.30 Subdivision 1. [SCOPE.] The gross receipts from the sale 50.31 of, and storage, distribution, use, or consumption of the 50.32 tangible personal property contained in this section are 50.33 specifically exempted from the taxes imposed by this chapter. 50.34 Building materials, equipment, and supplies and other items 50.35 exempt under this section are exempt regardless of whether 50.36 purchased by the owner or a contractor, subcontractor, or 51.1 builder. 51.2 Subd. 2. [STATE CONVENTION CENTER.] Building materials and 51.3 supplies for constructing improvements to a state convention 51.4 center located in a city located outside the metropolitan area 51.5 as defined in section 473.121, subdivision 2, and governed by an 51.6 11-person board of which four are appointed by the governor are 51.7 exempt if the improvements are financed in whole or in part by 51.8 nonstate resources including, but not limited to, revenue or 51.9 general obligations issued by the state convention center board 51.10 of the city in which the center is located. 51.11 Subd. 3. [CORRECTIONAL FACILITIES.] Building materials and 51.12 supplies for constructing or improving an adult or juvenile 51.13 correctional facility by a county, home rule charter city, or 51.14 statutory city are exempt if the project is mandated by state or 51.15 federal law, rule, or regulation. The tax must be imposed and 51.16 collected as if the rate under section 297A.62, subdivision 1, 51.17 applied and then refunded in the manner provided in section 51.18 297A.75. 51.19 Subd. 4. [LAKE SUPERIOR CENTER.] Building materials and 51.20 supplies for construction of the Lake Superior Center are exempt. 51.21 Subd. 5. [SCIENCE MUSEUM.] Building materials and supplies 51.22 for construction of the Science Museum of Minnesota are exempt. 51.23 Subd. 6. [BUSINESS INCUBATOR AND INDUSTRIAL PARK.] 51.24 Building materials and supplies for construction of a facility 51.25 that includes a business incubator and industrial park are 51.26 exempt if the facility: 51.27 (1) is owned and operated by a nonprofit charitable 51.28 organization that qualifies for tax exemption under section 51.29 501(c)(3) of the Internal Revenue Code; 51.30 (2) is used for the development of nonretail businesses, 51.31 offering access to equipment, space, services, and advice to the 51.32 tenant businesses, for the purpose of encouraging economic 51.33 development and job creation in the area served by the 51.34 organization, and emphasizes development of businesses that 51.35 manufacture products from materials found in the waste stream, 51.36 or manufacture alternative energy and conservation systems, or 52.1 make use of emerging environmental technologies; 52.2 (3) includes in its structure systems of material and 52.3 energy exchanges that use waste products from one industrial 52.4 process as sources of energy and material for other processes; 52.5 and 52.6 (4) makes use of solar and wind energy technology and 52.7 incorporates salvaged materials in its construction. 52.8 Subd. 7. [ALFALFA PROCESSING FACILITY.] Building materials 52.9 and supplies for constructing a facility that either develops 52.10 market-value agricultural products made from alfalfa leaf 52.11 material, or produces biomass energy fuel or electricity from 52.12 alfalfa stems in accordance with the biomass mandate imposed 52.13 under section 216B.2424 are exempt if the total capital 52.14 investment made in the value-added agricultural products and 52.15 biomass electric generation facilities is at least $50,000,000. 52.16 Subd. 8. [WOOD WASTE COGENERATION FACILITY.] Building 52.17 materials and supplies for constructing, equipping, or modifying 52.18 a district heating and cooling system cogeneration facility are 52.19 exempt if the facility: 52.20 (1) utilizes wood waste as a primary fuel source; and 52.21 (2) satisfies the requirements of the biomass mandate in 52.22 section 216B.2424, subdivision 5. 52.23 Subd. 9. [DIRECT SATELLITE BROADCASTING FACILITY.] 52.24 Building materials and supplies for constructing a new facility 52.25 in Minnesota for providing federal communications commission 52.26 licensed direct satellite broadcasting services using direct 52.27 broadcast satellites operating in the 12-GHz. band or fixed 52.28 satellite regional or national program services, as defined in 52.29 section 272.02, subdivision 16, are exempt if construction of 52.30 the facility was commenced after June 30, 1993. All machinery, 52.31 equipment, tools, accessories, appliances, contrivances, 52.32 furniture, fixtures, and all technical equipment or tangible 52.33 personal property of any other nature or description necessary 52.34 to the construction and equipping of that facility in order to 52.35 provide those services are also exempt. 52.36 Subd. 10. [AIRCRAFT HEAVY MAINTENANCE FACILITY.] 53.1 Materials, equipment, and supplies used or consumed in 53.2 constructing a heavy maintenance facility for aircraft that is 53.3 to be owned by the state of Minnesota or one of its political 53.4 subdivisions and leased by an airline company, or an aircraft 53.5 engine repair facility described in section 116R.02, subdivision 53.6 6, are exempt. Except for equipment owned or leased by a 53.7 contractor, all machinery, equipment, and tools necessary to the 53.8 construction and equipping of that facility in order to provide 53.9 those services are also exempt. 53.10 Subd. 11. [BUILDING MATERIALS; DISABLED VETERANS.] 53.11 Building materials to be used in the construction or remodeling 53.12 of a residence are exempt when the construction or remodeling is 53.13 financed in whole or in part by the United States in accordance 53.14 with United States Code, title 38, sections 2101 to 2105. The 53.15 tax must be imposed and collected as if the rate under section 53.16 297A.62, subdivision 1, applied and then refunded in the manner 53.17 provided in section 297A.75. 53.18 Subd. 12. [CHAIR LIFTS, RAMPS, ELEVATORS.] Chair lifts, 53.19 ramps, and elevators and building materials used to install or 53.20 construct them are exempt, if they are authorized by a physician 53.21 and installed in or attached to the owner's homestead. The tax 53.22 must be imposed and collected as if the rate under section 53.23 297A.62, subdivision 1, applied and then refunded in the manner 53.24 provided in section 297A.75. 53.25 Subd. 13. [AGRICULTURE PROCESSING FACILITY MATERIALS.] 53.26 Building materials and supplies for constructing an agriculture 53.27 processing facility as defined in section 469.1811 in which the 53.28 total capital investment in the processing facility is expected 53.29 to exceed $100,000,000 are exempt. The tax must be imposed and 53.30 collected as if the rate under section 297A.62, subdivision 1, 53.31 applied, and then refunded in the manner provided in section 53.32 297A.75. 53.33 Subd. 14. [MINERAL PRODUCTION FACILITIES.] Building 53.34 materials, equipment, and supplies used for the construction of 53.35 the following mineral production facilities are exempt. 53.36 The mineral production facilities that qualify for this 54.1 exemption are: 54.2 (1) a value added iron products plant, which may be either 54.3 a new plant or a facility incorporated into an existing plant 54.4 that produces iron upgraded to a minimum of 75 percent iron 54.5 content or any iron alloy with a total minimum metallic content 54.6 of 90 percent; 54.7 (2) a facility used for the manufacture of fluxed taconite 54.8 pellets as defined in section 298.24; 54.9 (3) a new capital project that has a total cost of over 54.10 $40,000,000 that is directly related to production, cost, or 54.11 quality at an existing taconite facility that does not qualify 54.12 under clause (1) or (2); and 54.13 (4) a new mine or minerals processing plant for any mineral 54.14 subject to the net proceeds tax imposed under section 298.015. 54.15 The tax must be imposed and collected as if the rate under 54.16 section 297A.62, subdivision 1, applied, and then refunded in 54.17 the manner provided in section 297A.75. 54.18 Subd. 15. [MINNEAPOLIS CONVENTION CENTER.] Materials, 54.19 supplies, or equipment used or consumed in the construction, 54.20 equipment, improvement, or expansion of the Minneapolis 54.21 convention center are exempt. 54.22 Subd. 16. [RIVERCENTRE ARENA.] Materials, supplies, or 54.23 equipment used or consumed in the construction, equipment, 54.24 improvement, or expansion of the RiverCentre arena complex in 54.25 the city of St. Paul are exempt. 54.26 Subd. 17. [ENVIRONMENTAL LEARNING CENTER.] Construction 54.27 materials and supplies are exempt if they are used or consumed 54.28 in constructing or improving the Long Lake Conservation Center 54.29 pursuant to the funding provided under Laws 1994, chapter 643, 54.30 section 23, subdivision 28, as amended by Laws 1995, First 54.31 Special Session chapter 2, article 1, section 48; Laws 1996, 54.32 chapter 463, section 7, subdivision 26; and Laws 1997, chapter 54.33 246, section 24. The tax must be calculated and paid as if the 54.34 rate in section 297A.62, subdivision 1, was in effect and a 54.35 refund applied for in the manner prescribed in section 297A.75. 54.36 Subd. 18. [SOYBEAN OILSEED PROCESSING AND REFINING 55.1 FACILITY.] Construction materials and supplies are exempt if: 55.2 (1) the materials and supplies are used or consumed in 55.3 constructing a facility for soybean oilseed processing and 55.4 refining; 55.5 (2) the total capital investment made in the facility is at 55.6 least $60,000,000; and 55.7 (3) the facility is constructed by a Minnesota-based 55.8 cooperative, organized under chapter 308A. 55.9 Subd. 19. [EARLE BROWN HERITAGE CENTER.] Materials and 55.10 supplies used or consumed in and equipment incorporated into the 55.11 construction, improvement, or expansion of the Earle Brown 55.12 Heritage Center in Brooklyn Center are exempt. This subdivision 55.13 is effective for purchases made before July 1, 2003. 55.14 Subd. 20. [CONSTRUCTION MATERIALS AND SUPPLIES; BEEF 55.15 PROCESSING FACILITY.] Materials and supplies used or consumed 55.16 in, and equipment incorporated into, the expansion, remodeling, 55.17 or improvement of a facility used for cattle slaughtering are 55.18 exempt if: 55.19 (1) the cost of the project is expected to exceed 55.20 $15,000,000; 55.21 (2) the expansion, remodeling, or improvement of the 55.22 facility will be used to fabricate beef; 55.23 (3) the number of jobs at the facility is expected to 55.24 increase by at least 150 when the project is completed; and 55.25 (4) the project is expected to be completed by December 31, 55.26 2001. 55.27 Subd. 21. [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS 55.28 ELECTRICAL GENERATING FACILITY.] Materials and supplies used or 55.29 consumed in, and equipment incorporated into, the construction, 55.30 improvement, or expansion of a facility using biomass to 55.31 generate electricity are exempt if: 55.32 (1) the facility exclusively utilizes residue wood, 55.33 sawdust, bark, chipped wood, or brush to generate electricity; 55.34 (2) the facility utilizes a reciprocated grate combination 55.35 system; and 55.36 (3) the total gross capacity of the facility is 15 to 21 56.1 megawatts. 56.2 EXEMPTION CERTIFICATES 56.3 Sec. 16. [297A.72] [EXEMPTION CERTIFICATES.] 56.4 Subdivision 1. [DUTY OF RETAILER.] An exemption 56.5 certificate conclusively relieves the retailer from collecting 56.6 and remitting the tax only if taken in good faith from the 56.7 purchaser. 56.8 Subd. 2. [CONTENT AND FORM OF EXEMPTION CERTIFICATE.] An 56.9 exemption certificate must be substantially in the form 56.10 prescribed by the commissioner and: 56.11 (1) be signed by the purchaser or meet the requirements of 56.12 section 289A.07; 56.13 (2) bear the name and address of the purchaser; 56.14 (3) indicate the sales tax account number, if any, issued 56.15 to the purchaser; 56.16 (4) indicate the general character of the property sold by 56.17 the purchaser in the regular course of business or the 56.18 activities carried on by the organization; and 56.19 (5) identify the property purchased. 56.20 Sec. 17. [297A.73] [IMPROPER USE OF ITEM OBTAINED WITH 56.21 EXEMPTION CERTIFICATE.] 56.22 If a purchaser who gives an exemption certificate makes any 56.23 use of the item that is not for a purpose exempted under this 56.24 chapter, that use is considered a retail sale by the purchaser 56.25 and the sales price to the purchaser is considered the gross 56.26 receipts. If the sole use is rental while holding for sale, the 56.27 purchaser shall include in the purchaser's gross receipts the 56.28 amount of the rental charged. Upon subsequent sale of the item, 56.29 the seller shall include the entire amount of gross receipts 56.30 received from the sale without deduction of amounts previously 56.31 received as rentals. 56.32 Sec. 18. [297A.74] [COMMINGLING EXEMPTION CERTIFICATE 56.33 ITEMS.] 56.34 If a purchaser gives an exemption certificate for the 56.35 purchase of fungible items and later commingles the items with 56.36 similar fungible items not purchased exempt, sales from the 57.1 commingled items are considered sales of items purchased exempt 57.2 until a quantity has been sold that equals the quantity 57.3 purchased exempt. 57.4 EXEMPTION REFUNDS 57.5 Sec. 19. [297A.75] [REFUND; APPROPRIATION.] 57.6 Subdivision 1. [TAX COLLECTED.] The tax on the gross 57.7 receipts from the sale of following exempt items must be imposed 57.8 and collected as if the sale were taxable and the rate under 57.9 section 297A.62, subdivision 1, applied. The exempt items 57.10 include: 57.11 (1) capital equipment exempt under section 297A.68, 57.12 subdivision 5; 57.13 (2) building materials for an agricultural processing 57.14 facility exempt under section 297A.71, subdivision 13; 57.15 (3) building materials for mineral production facilities 57.16 exempt under section 297A.71, subdivision 14; 57.17 (4) building materials for correctional facilities under 57.18 section 297A.71, subdivision 3; 57.19 (5) building materials used in a residence for disabled 57.20 veterans exempt under section 297A.71, subdivision 11; and 57.21 (6) chair lifts, ramps, elevators, and associated building 57.22 materials exempt under section 297A.71, subdivision 12. 57.23 Subd. 2. [REFUND; ELIGIBLE PERSONS.] Upon application on 57.24 forms prescribed by the commissioner, a refund equal to the tax 57.25 paid on the gross receipts of the exempt items must be paid to 57.26 the applicant. Only the following persons may apply for the 57.27 refund: 57.28 (1) for subdivision 1, clauses (1) to (3), the applicant 57.29 must be the purchaser; 57.30 (2) for subdivision 1, clause (4), the applicant must be 57.31 the governmental subdivision; 57.32 (3) for subdivision 1, clause (5), the applicant must be 57.33 the recipient of the benefits provided in United States Code, 57.34 title 38, chapter 21; and 57.35 (4) for subdivision 1, clause (6), the applicant must be 57.36 the owner of the homestead property. 58.1 Subd. 3. [APPLICATION.] (a) The application must include 58.2 sufficient information to permit the commissioner to verify the 58.3 tax paid. If the tax was paid by a contractor, subcontractor, 58.4 or builder, under subdivision 1, clause (4), (5), or (6), the 58.5 contractor, subcontractor, or builder must furnish to the refund 58.6 applicant a statement including the cost of the exempt items and 58.7 the taxes paid on the items unless otherwise specifically 58.8 provided by this subdivision. The provisions of sections 58.9 289A.40 and 289A.50 apply to refunds under this section. 58.10 (b) An applicant may not file more than two applications 58.11 per calendar year for refunds for taxes paid on capital 58.12 equipment exempt under section 297A.68, subdivision 5. 58.13 Subd. 4. [INTEREST.] Interest must be paid on the refund 58.14 at the rate in section 270.76 from the date the refund claim is 58.15 filed for taxes paid under subdivision 1, clauses (1) to (3), 58.16 and (5), and from 60 days after the date the refund claim is 58.17 filed with the commissioner for claims filed under subdivision 58.18 1, clauses (4) and (6). 58.19 Subd. 5. [APPROPRIATION.] The amount required to make the 58.20 refunds is annually appropriated to the commissioner. 58.21 COMPUTATION AND COLLECTION OF TAXES 58.22 Sec. 20. [297A.76] [COMPUTATION OF SALES AND USE TAXES.] 58.23 Subdivision 1. [ROUNDING UP OR DOWN.] In computing the 58.24 sales or use tax to be collected or remitted as the result of a 58.25 transaction, amounts of tax less than one-half of one cent must 58.26 be disregarded and amounts of tax of one-half cent or more must 58.27 be considered an additional cent. 58.28 Subd. 2. [UNIFORM TAX COLLECTION METHODS; RULES.] 58.29 Agreements between competitive retailers or the adoption of 58.30 appropriate rules or regulations by organizations or 58.31 associations of retailers to provide uniform methods for adding 58.32 the sales tax or its average equivalent, which do not involve 58.33 otherwise unlawful price fixing agreements, are expressly 58.34 authorized and are not in violation of any Minnesota laws 58.35 prohibiting such agreements. The commissioner may prescribe 58.36 rules for such agreements. 59.1 Sec. 21. [297A.77] [COLLECTION OF SALES AND USE TAXES.] 59.2 Subdivision 1. [COLLECTION OF TAX AT TIME OF SALE.] The 59.3 tax must be stated and charged separately from the sales price 59.4 or charge for service insofar as practicable and must be 59.5 collected by the seller from the purchaser. 59.6 Subd. 2. [RECEIPT.] For use tax, the retailer shall give 59.7 the purchaser a tax receipt. The receipt must indicate the tax 59.8 in the form of a notation on the sales slip or receipt for the 59.9 sales price or in another form as prescribed by the commissioner. 59.10 Subd. 3. [TAX MUST BE REMITTED.] The tax collected by a 59.11 retailer under this section must be remitted to the commissioner 59.12 as provided in chapter 289A and this chapter. 59.13 Subd. 4. [STATUS OF SALES AND USE TAXES AS DEBT.] Sales 59.14 and use taxes that are required to be collected by a retailer 59.15 are debts from the purchaser to the retailer recoverable at law 59.16 in the same manner as other debts. 59.17 Sec. 22. [297A.78] [LIABILITY FOR USE TAX; RECEIPT AS 59.18 EVIDENCE.] 59.19 Liability for the payment of the use tax is not 59.20 extinguished until the tax has been paid to Minnesota. However, 59.21 a receipt from a retailer given to the purchaser under section 59.22 297A.77, subdivision 2, relieves the purchaser of further 59.23 liability for the tax to which the receipt refers, unless the 59.24 purchaser knows or has reason to know that the retailer did not 59.25 have a permit to collect the tax. 59.26 Sec. 23. [297A.79] [REPORTING OF GROSS RECEIPTS.] 59.27 At the option of the taxpayer, gross receipts from sales 59.28 may be reported on the cash basis as the consideration is 59.29 received or on the accrual basis as sales are made. 59.30 Sec. 24. [297A.80] [TAXES IN OTHER STATES; OFFSET AGAINST 59.31 USE TAX.] 59.32 If an article of tangible personal property or an item 59.33 listed in section 297A.63 has already been taxed by another 59.34 state for its sale, storage, use, or other consumption in an 59.35 amount less than the tax imposed by this chapter, then as to the 59.36 person who paid the tax in the other state, section 297A.63 60.1 applies only at a rate measured by the difference between the 60.2 rate imposed under section 297A.62 and the rate by which the 60.3 previous tax was computed. If the tax imposed in the other 60.4 state is equal to or greater than the tax imposed in this state, 60.5 then no tax is due from that person under section 297A.63. 60.6 Sec. 25. [297A.81] [UNCOLLECTIBLE DEBTS; OFFSET AGAINST 60.7 OTHER TAXES.] 60.8 The taxpayer may offset against the taxes payable for any 60.9 reporting period the amount of taxes imposed by this chapter 60.10 previously paid as a result of any transaction the consideration 60.11 for which became a debt owed to the taxpayer that became 60.12 uncollectible during the reporting period, but only in 60.13 proportion to the portion of the debt that became 60.14 uncollectible. Section 289A.40, subdivision 2, applies to an 60.15 offset under this section. 60.16 Sec. 26. [297A.82] [AIRCRAFT; FLIGHT EQUIPMENT; PAYMENT OF 60.17 TAXES; EXEMPTIONS.] 60.18 Subdivision 1. [REQUIREMENTS FOR REGISTRATION.] An 60.19 aircraft must not be registered or licensed in this state unless 60.20 the applicant presents proof that the sales or use tax imposed 60.21 by this chapter has been paid or that the transaction is exempt 60.22 from the sales and use tax. The exemption for an occasional 60.23 sale under section 297A.67, subdivision 23, or 297A.68, 60.24 subdivision 25, does not apply to the sale or purchase of an 60.25 aircraft. 60.26 Subd. 2. [PAYMENT OF TAX TO DEALER.] If an aircraft is 60.27 purchased from a dealer holding a valid sales and use tax permit 60.28 under this chapter, the applicant shall present proof that the 60.29 tax has been paid to the dealer. 60.30 Subd. 3. [PAYMENT OF TAX TO COMMISSIONER.] If the aircraft 60.31 is purchased from a person who is not the holder of a valid 60.32 sales and use tax permit under this chapter, the purchaser shall 60.33 pay the tax to the commissioner of revenue prior to registering 60.34 or licensing the aircraft in this state. The commissioner of 60.35 revenue shall issue a certificate stating that the sales and use 60.36 tax in respect to the transaction has been paid. 61.1 Subd. 4. [EXEMPTIONS.] (a) The following transactions are 61.2 exempt from the tax imposed in this chapter to the extent 61.3 provided. 61.4 (b) The purchase or use of aircraft previously registered 61.5 in Minnesota by a corporation or partnership is exempt if the 61.6 transfer constitutes a transfer within the meaning of section 61.7 351 or 721 of the Internal Revenue Code. 61.8 (c) The sale to or purchase, storage, use, or consumption 61.9 by a licensed aircraft dealer of an aircraft for which a 61.10 commercial use permit has been issued pursuant to section 61.11 360.654 is exempt, if the aircraft is resold while the permit is 61.12 in effect. 61.13 (d) Airflight equipment when sold to, or purchased, stored, 61.14 used, or consumed by airline companies, as defined in section 61.15 270.071, subdivision 4, is exempt. For purposes of this 61.16 subdivision, "airflight equipment" includes airplanes and parts 61.17 necessary for the repair and maintenance of such airflight 61.18 equipment, and flight simulators, but does not include airplanes 61.19 with a gross weight of less than 30,000 pounds that are used on 61.20 intermittent or irregularly timed flights. 61.21 Subd. 5. [EXEMPT PURCHASE CERTIFICATE.] If the purchase of 61.22 an aircraft is exempt under this chapter, the commissioner shall 61.23 issue a certificate that no sales or use tax is due and owing in 61.24 respect to the transaction. 61.25 Subd. 6. [SALES AND LEASES; TAX TREATMENT.] (a) A sale of 61.26 aircraft and parts for the repair of aircraft purchased by a 61.27 nonprofit, incorporated flying club or association utilized 61.28 solely by the corporation by leasing the aircraft to 61.29 shareholders of the corporation is exempt as property purchased 61.30 for resale. The leasing of the aircraft to the shareholders by 61.31 the flying club or association is taxable as a retail sale. 61.32 (b) A lease of aircraft utilized by a lessee for leasing to 61.33 others, whether or not the lessee also utilizes the aircraft for 61.34 charter service or for flight instruction if no separate charge 61.35 is made for aircraft rental, is exempt as a purchase for resale. 61.36 However, a proportionate share of the lease payment reflecting 62.1 use for flight instruction or charter service is taxable under 62.2 section 297A.63. 62.3 PERMITS 62.4 Sec. 27. [297A.83] [APPLICATION FOR PERMIT.] 62.5 Subdivision 1. [PERSONS APPLYING.] (a) A retailer required 62.6 to collect and remit sales taxes under section 297A.66 shall 62.7 file with the commissioner an application for a permit. 62.8 (b) A retailer making retail sales from outside this state 62.9 to a destination within this state who is not required to obtain 62.10 a permit under paragraph (a) may nevertheless voluntarily file 62.11 an application for a permit. 62.12 (c) The commissioner may require any person or class of 62.13 persons obligated to file a use tax return under section 62.14 289A.11, subdivision 3, to file an application for a permit. 62.15 Subd. 2. [APPLICATION REQUIREMENTS.] The application must 62.16 be made on a form prescribed by the commissioner and indicate 62.17 the name under which the applicant intends to transact business, 62.18 the location of the applicant's place or places of business, and 62.19 other information the commissioner may require. The application 62.20 must be filed by the owner, if a natural person; by a member or 62.21 partner, if the owner is an association or partnership; or by a 62.22 person authorized to file the application, if the owner is a 62.23 corporation. 62.24 Subd. 3. [COMMISSIONER'S DISCRETION.] (a) The commissioner 62.25 may decline to issue a permit to a retailer not maintaining a 62.26 place of business in this state, or may cancel a permit 62.27 previously issued to the retailer, if the commissioner believes 62.28 that the tax can be collected more effectively from the persons 62.29 using the property in this state. A refusal to issue or 62.30 cancellation of a permit on such grounds does not affect the 62.31 retailer's right to make retail sales from outside this state to 62.32 destinations within this state. 62.33 (b) If the commissioner considers it necessary for the 62.34 efficient administration of the tax to regard a salesperson, 62.35 representative, trucker, peddler, or canvasser as the agent of 62.36 the dealer, distributor, supervisor, employer, or other person 63.1 under whom that person operates or from whom the person obtains 63.2 the tangible personal property sold, whether making sales 63.3 personally or in behalf of that dealer, distributor, supervisor, 63.4 employer, or other person, the commissioner may regard the 63.5 salesperson, representative, trucker, peddler, or canvasser as 63.6 such agent, and may regard the dealer, distributor, supervisor, 63.7 employer, or other person as a retailer for the purposes of 63.8 collecting the tax. 63.9 Sec. 28. [297A.84] [PERMITS ISSUED.] 63.10 The commissioner shall issue a permit to each applicant who 63.11 has complied with section 297A.83, and with section 297A.92 if 63.12 security is required. A person is considered to have a permit 63.13 if the person has a Minnesota tax identification number issued 63.14 by the department that is currently active for taxes imposed by 63.15 this chapter. A permit is valid until canceled or revoked. It 63.16 is not assignable and is valid only for the person in whose name 63.17 it is granted and for the transaction of business at the places 63.18 designated on the permit. 63.19 Sec. 29. [297A.85] [CANCELLATION OF PERMITS.] 63.20 The commissioner may cancel a permit if one of the 63.21 following conditions occurs: 63.22 (1) the permit holder has not filed a sales or use tax 63.23 return for at least one year; 63.24 (2) the permit holder has not reported any sales or use tax 63.25 liability on the permit holder's returns for at least two years; 63.26 or 63.27 (3) the permit holder requests cancellation of the permit. 63.28 Sec. 30. [297A.86] [REVOCATION OF PERMITS.] 63.29 Subdivision 1. [NOTICE OF REVOCATION; HEARINGS.] (a) If a 63.30 person fails to comply with this chapter or the sales and use 63.31 tax provisions of chapter 289A or the rules adopted under either 63.32 chapter, without reasonable cause, the commissioner may give the 63.33 person 30 days' notice in writing, specifying the violations, 63.34 and stating that based on the violations the commissioner 63.35 intends to revoke the person's permit. The notice must also 63.36 advise the person of the right to contest the revocation under 64.1 this subdivision. It must also explain the general procedures 64.2 for a contested case hearing under chapter 14. The notice may 64.3 be served personally or by mail in the manner prescribed for 64.4 service of an order of assessment. 64.5 (b) If the person does not request a hearing within 30 days 64.6 after the date of the notice of intent, the commissioner may 64.7 serve a notice of revocation of permit upon the person, and the 64.8 permit is revoked. If a hearing is timely requested, and held, 64.9 the permit is revoked after the commissioner serves an order of 64.10 revocation of permit under section 14.62, subdivision 1. 64.11 Subd. 2. [NEW PERMITS AFTER REVOCATION.] (a) The 64.12 commissioner shall not issue a new permit after revocation or 64.13 reinstate a revoked permit unless the taxpayer applies for a 64.14 permit and provides reasonable evidence of intention to comply 64.15 with the sales and use tax laws and rules. The commissioner may 64.16 require the applicant to provide security, in addition to that 64.17 authorized by section 297A.92, in an amount reasonably necessary 64.18 to ensure compliance with the sales and use tax laws and rules. 64.19 (b) If a taxpayer has had a permit or permits revoked three 64.20 times in a five-year period, the commissioner shall not issue a 64.21 new permit or reinstate the revoked permit until 24 months have 64.22 elapsed after revocation and the taxpayer has satisfied the 64.23 conditions for reinstatement of a revoked permit or issuance of 64.24 a new permit imposed by this section and rules adopted under 64.25 this section. 64.26 (c) For purposes of this subdivision, "taxpayer" means: 64.27 (1) an individual, if a revoked permit was issued to or in 64.28 the name of an individual, or a corporation or partnership, if a 64.29 revoked permit was issued to or in the name of a corporation or 64.30 partnership; and 64.31 (2) an officer of a corporation, a member of a partnership, 64.32 or an individual who is liable for delinquent sales taxes, 64.33 either for the entity for which the new or reinstated permit is 64.34 at issue, or for another entity for which a permit was 64.35 previously revoked, or personally as a permit holder. 64.36 Sec. 31. [297A.87] [FLEA MARKETS, SHOWS, AND OTHER SELLING 65.1 EVENTS.] 65.2 Subdivision 1. [EVENTS AFFECTED.] (a) This section applies 65.3 to a flea market, craft show, antique show, coin show, stamp 65.4 show, comic book show, convention exhibit area, or similar 65.5 selling event. 65.6 (b) To be subject to this section, the operator of an event 65.7 described in paragraph (a) must rent or lease space on the sale 65.8 premises to the seller, charge the seller a registration or 65.9 participation fee, or receive a percentage of sales or other 65.10 consideration from a seller as a condition to participation by a 65.11 seller in the event. 65.12 Subd. 2. [SELLER'S PERMIT OR ALTERNATE STATEMENT.] (a) The 65.13 operator of an event under subdivision 1 shall obtain one of the 65.14 following from a person who wishes to do business as a seller at 65.15 the event: 65.16 (1) evidence that the person holds a valid seller's permit 65.17 under section 297A.84; or 65.18 (2) a written statement that the person is not offering for 65.19 sale any item that is taxable under this chapter. 65.20 (b) The operator shall require the evidence or statement as 65.21 a prerequisite to participating in the event as a seller. 65.22 Subd. 3. [OCCASIONAL SALE PROVISIONS NOT APPLICABLE.] The 65.23 isolated and occasional sale provisions under section 297A.67, 65.24 subdivision 23, or under section 297A.68, subdivision 25, do not 65.25 apply to a seller at an event under this section. 65.26 DIRECT PAY 65.27 Sec. 32. [297A.89] [DIRECT PAYMENT BY PURCHASERS 65.28 PERMITTED.] 65.29 Subdivision 1. [COMMISSIONER MAY PERMIT.] The commissioner 65.30 may permit purchasers to pay taxes imposed by this chapter 65.31 directly to the commissioner. Any taxes paid by purchasers 65.32 under this section are considered use taxes, except for local 65.33 sales taxes when no corresponding local use tax is imposed. 65.34 Subd. 2. [RETAILER DOES NOT COLLECT.] The retailer shall 65.35 not collect the tax from a purchaser who furnishes to the 65.36 retailer a copy of a certificate issued by the commissioner 66.1 authorizing the purchaser to pay any sales or use tax due on 66.2 purchases made by the purchaser directly to the commissioner 66.3 under subdivision 1. 66.4 Sec. 33. [297A.90] [INTERSTATE MOTOR CARRIERS AS 66.5 RETAILERS.] 66.6 Subdivision 1. [REGISTRATION; RECORDS.] (a) A person who 66.7 is engaged in interstate for-hire transportation of tangible 66.8 personal property or passengers by motor vehicle may, under 66.9 rules prescribed by the commissioner, register as a retailer and 66.10 pay the taxes imposed by this chapter in accordance with this 66.11 section. Any taxes paid under this section are use taxes, 66.12 except local sales taxes when no corresponding local use tax is 66.13 imposed. 66.14 (b) As used in this section, "person" means: (1) one who 66.15 possesses a certificate or permit or has completed a 66.16 registration process that authorizes for-hire transportation of 66.17 property or passengers from the United States Department of 66.18 Transportation, the transportation regulation board, or the 66.19 department of transportation; (2) one who transports commodities 66.20 defined as "exempt" in for-hire transportation in interstate 66.21 commerce; or (3) one who transports tangible personal property 66.22 in interstate commerce, pursuant to contracts with persons 66.23 described in clause (1) or (2). Persons qualifying under clause 66.24 (2) or (3) must maintain on a current basis the same type of 66.25 mileage records that are required by persons specified in clause 66.26 (1) by the United States Department of Transportation. 66.27 (c) Persons who in the course of their business are 66.28 transporting solely their own goods in interstate commerce may 66.29 also register as retailers under rules prescribed by the 66.30 commissioner and pay the taxes imposed by this chapter in 66.31 accordance with this section. 66.32 Subd. 2. [PAYMENT OF TAX.] (a) Persons who are registered 66.33 as retailers may make purchases in this state or import property 66.34 into this state without payment of the sales or use taxes 66.35 imposed by this chapter at the time of purchase or importation, 66.36 if the purchases or importations come within the provisions of 67.1 this section and are made in strict compliance with the rules of 67.2 the commissioner. 67.3 (b) A person described in subdivision 1 may elect to pay 67.4 directly to the commissioner any sales or use tax that may be 67.5 due under this chapter for the acquisition of mobile 67.6 transportation equipment and parts and accessories attached or 67.7 to be attached to such equipment registered under section 67.8 168.187. 67.9 (c) The total cost of such equipment and parts and 67.10 accessories attached or to be attached to such equipment must be 67.11 multiplied by a fraction. The numerator of the fraction is the 67.12 Minnesota mileage as reported on the current pro rata 67.13 application provided for in section 168.187 and the denominator 67.14 of the fraction is the total mileage reported on the current pro 67.15 rata registration application. The amount so determined must be 67.16 multiplied by the tax rate to obtain the tax due. 67.17 In computing the tax under this section "sales price" does not 67.18 include the amount of any tax, except any manufacturer's or 67.19 importer's excise tax, imposed by the United States upon or with 67.20 respect to retail sales, whether imposed on the retailer or the 67.21 consumer. 67.22 (d) A retailer covered by this section shall make a return 67.23 and remit to the commissioner the tax due for the preceding 67.24 calendar month in accordance with sections 289A.11 and 289A.20, 67.25 subdivision 4. 67.26 Subd. 3. [REGISTRATION SUBSEQUENT TO PAYMENT OF TAX.] A 67.27 person who has paid the tax under this chapter or chapter 297B 67.28 and who meets the requirements of this section at the time of 67.29 the sale, but was not registered under this section at the time 67.30 of the sale, may register as a retailer, make a return, and file 67.31 for a refund of the difference between the tax calculated under 67.32 this chapter or chapter 297B and the tax calculated under 67.33 subdivision 2. 67.34 Subd. 4. [AGREEMENT WITH COMMISSIONER OF PUBLIC SAFETY.] 67.35 Notwithstanding subdivisions 1 to 3, the commissioner may enter 67.36 into an agreement with the commissioner of public safety 68.1 whereby, upon approval of both commissioners, the commissioner 68.2 of public safety shall collect the sales tax on motor vehicles 68.3 from persons defined in subdivision 1. For the purpose of 68.4 collecting the tax, the commissioner of public safety shall act 68.5 as the agent of the commissioner of revenue and shall be subject 68.6 to all rules consistent with this chapter that may be prescribed 68.7 by the commissioner. 68.8 ENFORCEMENT 68.9 Sec. 34. [297A.91] [SEIZURE; COURT REVIEW.] 68.10 Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL 68.11 TRANSPORT.] (a) If the retailer does not have a sales or use tax 68.12 permit and has been engaging in transporting personal property 68.13 into the state without payment of the tax, the commissioner of 68.14 revenue or the commissioner's agents may seize in the name of 68.15 the state any truck, automobile, or means of transportation not 68.16 owned or operated by a common carrier, used in the illegal 68.17 importation and transportation of any tangible personal property 68.18 by a retailer or the retailer's agent or employee. The 68.19 commissioner may demand the forfeiture and sale of the truck, 68.20 automobile, or other means of transportation together with the 68.21 property being transported illegally, unless the owner 68.22 establishes to the satisfaction of the commissioner or the court 68.23 that the owner had no notice or knowledge or reason to believe 68.24 that the vehicle was used or intended to be used in any such 68.25 violation. 68.26 (b) Within two days after the seizure, the person making 68.27 the seizure shall deliver an inventory of the vehicle and 68.28 property seized to the person from whom the seizure was made, if 68.29 known, and to any person known or believed to have any right, 68.30 title, interest or lien on the vehicle or property. The person 68.31 making the seizure shall also file a copy of the inventory with 68.32 the commissioner. 68.33 Subd. 2. [COURT REVIEW OF FORFEITURE.] (a) Within ten days 68.34 after the date of service of the inventory, the person from whom 68.35 the vehicle and property were seized or any person claiming an 68.36 interest in the vehicle or property may file with the 69.1 commissioner a demand for a judicial determination of the 69.2 question of whether the vehicle or property was lawfully subject 69.3 to seizure and forfeiture. The commissioner, within 30 days, 69.4 shall institute an action in the district court of the county 69.5 where the seizure was made to determine the issue of forfeiture. 69.6 (b) The action must be brought in the name of the state and 69.7 prosecuted by the county attorney or the attorney general. The 69.8 court shall hear the action without a jury and shall determine 69.9 the issues of fact and law involved. If a judgment of 69.10 forfeiture is entered and is not stayed pending an appeal, the 69.11 commissioner may have the forfeited vehicle and property sold at 69.12 public auction as provided by law. 69.13 Subd. 3. [TREATMENT OF SEIZED PROPERTY.] If a demand for 69.14 judicial determination is made and no action is commenced as 69.15 provided in this subdivision, the vehicle and property must be 69.16 released by the commissioner and redelivered to the person 69.17 entitled to it. If no demand is made, the vehicle and property 69.18 seized are considered forfeited to the state by operation of law 69.19 and may be disposed of by the commissioner as if there was a 69.20 judgment of forfeiture. The forfeiture and sale of the 69.21 automobile, truck, or other means of transportation, and of the 69.22 property being transported illegally in it, are a penalty for 69.23 the violation of this chapter. After deducting the expense of 69.24 keeping the vehicle and property, the fee for seizure, and the 69.25 costs of the sale, the commissioner shall pay liens from the 69.26 funds collected. The commissioner shall pay all liens, 69.27 according to their priority, that are established at the hearing 69.28 as being bona fide and as existing without the lienor having any 69.29 notice or knowledge that the vehicle or property was being used 69.30 or was intended to be used for or in connection with any such 69.31 violation as specified in the order of the court. The 69.32 commissioner shall pay the balance of the proceeds into the 69.33 state treasury to be credited to the general fund. The state is 69.34 not liable for any liens in excess of the proceeds from the sale 69.35 after allowable deductions. A sale under this section frees the 69.36 vehicle and property sold from all liens. The order of the 70.1 district court may be appealed as in other civil cases. 70.2 Sec. 35. [297A.92] [SECURITY.] 70.3 Subdivision 1. [AMOUNT OF SECURITY.] To ensure compliance 70.4 with the taxes imposed by this chapter, the commissioner may 70.5 require a retailer subject to this chapter to deposit security 70.6 with the commissioner. The security must be in the form and 70.7 amount the commissioner requires, but not more than twice the 70.8 retailer's estimated average liability for the period for which 70.9 the returns are required to be filed, or $10,000, whichever is 70.10 less. The amount of security may be increased or decreased by 70.11 the commissioner, subject to the limitations in this section. 70.12 Subd. 2. [AUCTIONS OF SECURITY.] The commissioner may sell 70.13 property deposited as security at public auction if necessary to 70.14 recover the amount required to be collected, including any 70.15 interest and penalties. Notice of the sale must be served upon 70.16 the person who deposited the security. It must be served 70.17 personally, or by mail as prescribed for the service of a notice 70.18 of a deficiency. After a sale any surplus above the amount due 70.19 not required as security under this section must be returned to 70.20 the person who deposited the security. 70.21 Subd. 3. [BOND.] In lieu of security, the commissioner may 70.22 require a retailer to file a bond. The bond must be issued by a 70.23 surety company authorized to transact business in this state and 70.24 approved by the commissioner of commerce as to solvency and 70.25 responsibility. 70.26 Sec. 36. [297A.93] [JEOPARDY ASSESSMENT AND COLLECTION.] 70.27 (a) If the commissioner has reason to believe that the 70.28 person required to file the return is about to leave the state 70.29 or remove the person's property from this state with the purpose 70.30 of evading the tax and penalties imposed by this chapter, or 70.31 that the collection of the tax will be jeopardized by delays 70.32 incident to other methods of collection, the commissioner may 70.33 immediately declare the person's reporting period at an end and 70.34 assess a tax on the basis of the commissioner's own knowledge or 70.35 information available. The commissioner may then demand 70.36 immediate payment of the tax, and, if payment is not immediately 71.1 made, collect the tax by any method prescribed in chapter 270. 71.2 (b) It is not a defense to an assessment made under this 71.3 section that the tax period has not terminated, that the time 71.4 otherwise allowed by law for filing a return has not expired, 71.5 that the notices otherwise required by law for making an 71.6 assessment have not been given, or that the time otherwise 71.7 allowed by law for taking or prosecuting an appeal or for paying 71.8 the tax has not expired. 71.9 DEPOSIT OF REVENUES 71.10 Sec. 37. [297A.94] [DEPOSIT OF REVENUES.] 71.11 (a) Except as provided in this section, the commissioner 71.12 shall deposit the revenues, including interest and penalties, 71.13 derived from the taxes imposed by this chapter in the state 71.14 treasury and credit them to the general fund. 71.15 (b) The commissioner shall deposit taxes in the Minnesota 71.16 agricultural and economic account in the special revenue fund if: 71.17 (1) the taxes are derived from sales and use of property 71.18 and services purchased for the construction and operation of an 71.19 agricultural resource project; and 71.20 (2) the purchase was made on or after the date on which a 71.21 conditional commitment was made for a loan guaranty for the 71.22 project under section 41A.04, subdivision 3. 71.23 The commissioner of finance shall certify to the commissioner 71.24 the date on which the project received the conditional 71.25 commitment. The amount deposited in the loan guaranty account 71.26 must be reduced by any refunds and by the costs incurred by the 71.27 department of revenue to administer and enforce the assessment 71.28 and collection of the taxes. 71.29 (c) The commissioner shall deposit the revenues, including 71.30 interest and penalties, derived from the taxes imposed on sales 71.31 and purchases included in section 297A.61, subdivision 16, 71.32 paragraphs (b) and (f), in the state treasury, and credit them 71.33 as follows: 71.34 (1) first to the general obligation special tax bond debt 71.35 service account in each fiscal year the amount required by 71.36 section 16A.661, subdivision 3, paragraph (b); and 72.1 (2) after the requirements of clause (1) have been met, the 72.2 balance to the general fund. 72.3 (d) The commissioner shall deposit the revenues, including 72.4 interest and penalties, collected under section 297A.64, 72.5 subdivision 5, in the state treasury and credit them to the 72.6 general fund. By July 15 of each year the commissioner shall 72.7 transfer to the highway user tax distribution fund an amount 72.8 equal to the excess fees collected under section 297A.64, 72.9 subdivision 5, for the previous calendar year. 72.10 LOCAL SALES AND USE TAXES 72.11 Sec. 38. [297A.95] [COORDINATION OF STATE AND LOCAL SALES 72.12 TAX RATES.] 72.13 In preparing and distributing a sales tax schedule for use 72.14 within a local jurisdiction with a separate general sales tax, 72.15 the state department of revenue shall coordinate the state and 72.16 local sales tax so that a sale of $1 reflects a tax equal to the 72.17 combination of the state and local sales tax rates. The 72.18 combined sales tax on other sales amounts must also reflect the 72.19 coordinated rather than the separate effects of the state and 72.20 local sales taxes. The schedule must be coordinated as long as 72.21 the local sales tax is in effect. If the sales tax percentage 72.22 is changed for either of the taxes, the schedule must be 72.23 adjusted to reflect the change. 72.24 Sec. 39. [297A.96] [LOCAL ADMISSIONS AND AMUSEMENT TAXES; 72.25 EXEMPTION FOR ARTS ORGANIZATIONS.] 72.26 If an event is sponsored by a nonprofit arts organization, 72.27 then amounts charged for admission to the event or to the 72.28 organization's premises are not subject to a tax imposed by a 72.29 local unit of government or imposed on sales taking place in a 72.30 single named local unit of government on sales of admissions or 72.31 amusements, under a law other than a general sales tax law. 72.32 Sec. 40. [297A.97] [OUTSTATE RETAILERS; LOCAL TAX 72.33 COLLECTION NOT REQUIRED.] 72.34 A retailer not maintaining a place of business in this 72.35 state is not required to collect taxes imposed by a political 72.36 subdivision of this state. 73.1 Sec. 41. [297A.98] [LOCAL GOVERNMENTS EXEMPT FROM LOCAL 73.2 SALES TAXES.] 73.3 Notwithstanding any other law, ordinance, or charter 73.4 provision, a political subdivision of the state is not required 73.5 to pay any general sales tax imposed by a political subdivision 73.6 of the state. 73.7 Sec. 42. [297A.99] [LOCAL SALES TAXES.] 73.8 Subdivision 1. [AUTHORIZATION; SCOPE.] (a) A political 73.9 subdivision of this state may impose a general sales tax if 73.10 permitted by special law or if the political subdivision enacted 73.11 and imposed the tax before the effective date of section 73.12 477A.016 and its predecessor provision. 73.13 (b) This section governs the imposition of a general sales 73.14 tax by the political subdivision. The provisions of this 73.15 section preempt the provisions of any special law: 73.16 (1) enacted before June 2, 1997, or 73.17 (2) enacted on or after June 2, 1997, that does not 73.18 explicitly exempt the special law provision from this section's 73.19 rules by reference. 73.20 (c) This section does not apply to or preempt a sales tax 73.21 on motor vehicles or a special excise tax on motor vehicles. 73.22 Subd. 2. [LOCAL RESOLUTION BEFORE APPLICATION FOR 73.23 AUTHORITY.] Before the governing body of a political subdivision 73.24 requests legislative approval of a special law for a local sales 73.25 tax that is administered under this section, it shall adopt a 73.26 resolution indicating its approval of the tax. The resolution 73.27 must include, at a minimum, information on the proposed tax 73.28 rate, how the revenues will be used, the total revenue that will 73.29 be raised before the tax expires, and the estimated length of 73.30 time that the tax will be in effect. This subdivision applies 73.31 to local laws enacted after June 30, 1998. 73.32 Subd. 3. [REQUIREMENTS FOR ADOPTION, USE, TERMINATION.] (a) 73.33 Imposition of a local sales tax is subject to approval by voters 73.34 of the political subdivision at a general election. 73.35 (b) The proceeds of the tax must be dedicated exclusively 73.36 to payment of the cost of a specific capital improvement which 74.1 is designated at least 90 days before the referendum on 74.2 imposition of the tax is conducted. 74.3 (c) The tax must terminate after the improvement designated 74.4 under paragraph (b) has been completed. 74.5 (d) After a sales tax imposed by a political subdivision 74.6 has expired or been terminated, the political subdivision is 74.7 prohibited from imposing a local sales tax for a period of one 74.8 year. Notwithstanding subdivision 13, this paragraph applies to 74.9 all local sales taxes in effect at the time of or imposed after 74.10 the date of enactment of this section. 74.11 Subd. 4. [TAX BASE.] (a) The tax applies to sales taxable 74.12 under this chapter that occur within the political subdivision. 74.13 (b) Taxable services are subject to a political 74.14 subdivision's sales tax, if they are performed either: 74.15 (1) within the political subdivision, or 74.16 (2) partly within and partly without the political 74.17 subdivision and more of the service is performed within the 74.18 political subdivision, based on the cost of performance. 74.19 Subd. 5. [TAX RATE.] (a) The tax rate is as specified in 74.20 the special law authorization and as imposed by the political 74.21 subdivision. 74.22 (b) The full political subdivision rate applies to any 74.23 sales that are taxed at a state rate less than or more than the 74.24 state general sales and use tax rate. 74.25 Subd. 6. [USE TAX.] A compensating use tax applies, at the 74.26 same rate as the sales tax, on the use, storage, distribution, 74.27 or consumption of tangible personal property or taxable services. 74.28 Subd. 7. [EXEMPTIONS.] (a) All goods or services that are 74.29 otherwise exempt from taxation under this chapter are exempt 74.30 from a political subdivision's tax. 74.31 (b) The gross receipts from the sale of tangible personal 74.32 property that meets the requirement of section 297A.68, 74.33 subdivision 13 or 14, are exempt, except the qualification test 74.34 applies based on the boundaries of the political subdivision 74.35 instead of the state of Minnesota. 74.36 (c) All mobile transportation equipment, and parts and 75.1 accessories attached to or to be attached to the equipment are 75.2 exempt, if purchased by a holder of a motor carrier direct pay 75.3 permit under section 297A.90. 75.4 Subd. 8. [CREDIT FOR OTHER LOCAL TAXES.] If a person paid 75.5 sales or use tax to another political subdivision of this state 75.6 on an item subject to tax under this section, a credit applies 75.7 against the tax imposed under this section. The credit equals 75.8 the tax the person paid to the other political subdivision for 75.9 the item. 75.10 Subd. 9. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.] 75.11 (a) The commissioner of revenue shall collect the taxes subject 75.12 to this section. The commissioner may collect the tax with the 75.13 state sales and use tax. All taxes under this section are 75.14 subject to the same penalties, interest, and enforcement 75.15 provisions as apply to the state sales and use tax. 75.16 (b) A request for a refund of state sales tax paid in 75.17 excess of the amount of tax legally due includes a request for a 75.18 refund of the political subdivision taxes paid on the goods or 75.19 services. The commissioner shall refund to the taxpayer the 75.20 full amount of the political subdivision taxes paid on exempt 75.21 sales or use. 75.22 (c) A political subdivision that is collecting and 75.23 administering its own sales and use tax before January 1, 1998, 75.24 may elect to be exempt from this subdivision and subdivision 11. 75.25 Subd. 10. [USE OF ZIP CODE IN DETERMINING LOCATION OF 75.26 SALE.] To determine whether to impose the local tax, the 75.27 retailer may use zip codes if the zip code area is entirely 75.28 within the political subdivision. When a zip code area is not 75.29 entirely within a political subdivision, the retailer shall not 75.30 collect the local tax if the purchaser notifies the retailer 75.31 that the purchaser's delivery address is outside of the 75.32 political subdivision, unless the retailer verifies that the 75.33 delivery address is in the political subdivision using a means 75.34 other than the zip code. Notwithstanding subdivision 13, this 75.35 subdivision applies to all local sales taxes without regard to 75.36 the date of authorization. 76.1 Subd. 11. [REVENUES; COST OF COLLECTION.] The commissioner 76.2 shall remit the proceeds of the tax, less refunds and a 76.3 proportionate share of the cost of collection, at least 76.4 quarterly, to the political subdivision. The commissioner shall 76.5 deduct from the proceeds remitted an amount that equals 76.6 (1) the direct and indirect costs of the department to 76.7 administer, audit, and collect the political subdivision's tax, 76.8 plus 76.9 (2) the political subdivision's proportionate share of the 76.10 indirect cost of administering all taxes under this section. 76.11 Subd. 12. [EFFECTIVE DATES; NOTIFICATION.] (a) A political 76.12 subdivision may impose a tax under this section starting only on 76.13 the first day of a calendar quarter. A political subdivision 76.14 may repeal a tax under this section stopping only on the last 76.15 day of a calendar quarter. 76.16 (b) The political subdivision shall notify the commissioner 76.17 of revenue at least 90 days before imposing or repealing a tax 76.18 under this section. 76.19 Subd. 13. [APPLICATION.] This section applies to all local 76.20 sales taxes that were authorized before, on, or after June 2, 76.21 1997. 76.22 Sec. 43. [297A.991] [REPORTING OF SALES TAX ON MINNESOTA 76.23 GOVERNMENTS.] 76.24 Subdivision 1. [COMMISSIONER OF REVENUE TO REPORT.] For 76.25 each fiscal year, the commissioner shall estimate the amount of 76.26 revenues derived from imposing the tax under this chapter and 76.27 chapter 297B on state agencies and political subdivisions. The 76.28 commissioner shall report this amount to the commissioner of 76.29 finance before the time for filing reports for the fiscal year 76.30 with the United States Department of Commerce. 76.31 Subd. 2. [COMMISSIONER OF FINANCE TO REPORT.] In reporting 76.32 the sales tax and sales tax on motor vehicles collections to the 76.33 United States Department of Commerce, the commissioner of 76.34 finance shall exclude the estimated amount from the sales and 76.35 motor vehicle collections. Sales tax and sales tax on motor 76.36 vehicles revenues received from political subdivisions must be 77.1 reported as intergovernmental grants or similar 77.2 intergovernmental revenue. The amount of the sales tax and 77.3 sales tax on motor vehicles paid by state agencies must be 77.4 reported as reduced state expenditures. 77.5 Sec. 44. [REVISOR'S INSTRUCTIONS.] 77.6 Subdivision 1. [CODIFICATION OF LOCAL LAWS.] In the next 77.7 edition of Minnesota Statutes, after consultation with the 77.8 chairs of the house and senate tax committees and with the 77.9 commissioner of revenue, the revisor of statutes may codify 77.10 local laws authorizing the imposition of a general sales or 77.11 general sales and use tax. 77.12 Subd. 2. [INTERNAL REFERENCES.] In the next edition of 77.13 Minnesota Statutes, the revisor of statutes shall change any 77.14 references to a repealed section in Minnesota Statutes, chapter 77.15 297A, to the appropriate recodified section. 77.16 Subd. 3. [AMENDMENTS TO REPEALED 77.17 SECTIONS.] Notwithstanding any law to the contrary, if a 77.18 provision of a section of Minnesota Statutes repealed by this 77.19 article is amended or repealed during the same legislative 77.20 session, the amendment or repealer shall supersede the 77.21 provisions of this article, and the revisor shall codify the 77.22 amendment or repealer consistent with the recodification of the 77.23 affected section by this article. 77.24 Sec. 45. [REPEALER.] 77.25 Minnesota Statutes 1998, sections 297A.01; 297A.02; 77.26 297A.022; 297A.023; 297A.03; 297A.04; 297A.041; 297A.06; 77.27 297A.065; 297A.07; 297A.09; 297A.10; 297A.11; 297A.12; 297A.13; 77.28 297A.135; 297A.14; 297A.141; 297A.15; 297A.16; 297A.17; 297A.18; 77.29 297A.21; 297A.211; 297A.213; 297A.22; 297A.23; 297A.24; 297A.25; 77.30 297A.2531; 297A.2545; 297A.255; 297A.256; 297A.2571; 297A.2572; 77.31 297A.2573; 297A.259; 297A.26; 297A.28; 297A.33, subdivision 2; 77.32 297A.44, subdivision 1; 297A.46; 297A.47; and 297A.48, are 77.33 repealed. 77.34 Sec. 46. [EFFECTIVE DATE.] 77.35 Sections 1 and 44, subdivisions 1 and 3, are effective the 77.36 day following final enactment. 78.1 Sections 2 and 3, paragraph (f), are effective for sales 78.2 taxes retained after June 30, 2001. 78.3 Section 3, paragraph (e), is effective for amounts 78.4 collected after June 30, 2001. 78.5 Sections 4 to 21 are effective for sales and purchases 78.6 occurring after June 30, 2001. 78.7 Section 22 is effective for use tax liabilities incurred 78.8 after June 30, 2001. 78.9 Section 23 is effective for gross receipts reported after 78.10 June 30, 2001. 78.11 Sections 24 and 25 are effective for offsets against taxes 78.12 after June 30, 2001. 78.13 Section 26 is effective for aircraft registered or licensed 78.14 and for sales or purchases of aircraft after June 30, 2001. 78.15 Sections 27 to 30 are effective for permits applied for, 78.16 issued, canceled, or revoked after June 30, 2001. 78.17 Section 31 is effective for selling events held after June 78.18 30, 2001. 78.19 Section 32 is effective for direct payment by purchasers 78.20 after June 30, 2001. 78.21 Section 33 is effective for registered motor carriers after 78.22 June 30, 2001. 78.23 Section 34 is effective for seizures after June 30, 2001. 78.24 Section 35 is effective for security required, security 78.25 auctions held, and security bonds required after June 30, 2001. 78.26 Section 36 is effective for assessments after June 30, 2001. 78.27 Section 37 is effective for revenues deposited after June 78.28 30, 2001. 78.29 Section 38 is effective for sales tax schedules distributed 78.30 after June 30, 2001. 78.31 Sections 39 to 42 are effective for local sales taxes 78.32 collected after June 30, 2001. 78.33 Section 43 is effective for sales taxes reported after June 78.34 30, 2001. 78.35 Sections 44, subdivision 2, and 45 are effective July 1, 78.36 2001. 79.1 ARTICLE 2 79.2 CONFORMING CHANGES 79.3 Section 1. Minnesota Statutes 1998, section 115A.69, 79.4 subdivision 6, is amended to read: 79.5 Subd. 6. [PROPERTY EXEMPT FROM TAXATION.] Any real or 79.6 personal property owned, used, or occupied by the district for 79.7 any authorized purpose is declared to be acquired, owned, used 79.8 and occupied for public and governmental purposes, and shall be 79.9 exempted from taxation by the state or any political subdivision 79.10 of the state, except to the extent that the property is subject 79.11 to the sales and use tax under chapter 297A, provided that those 79.12 properties shall be subject to special assessments levied by a 79.13 political subdivision for a local improvement in amounts 79.14 proportionate to and not exceeding the special benefit received 79.15 by the properties from the improvement. No possible use of the 79.16 properties in any manner different from their use for solid 79.17 waste management at the time shall be considered in determining 79.18 the special benefit received by the properties. 79.19 Sec. 2. Minnesota Statutes 1998, section 116A.25, is 79.20 amended to read: 79.21 116A.25 [PROPERTY EXEMPT FROM TAXATION.] 79.22 Any properties, real or personal, owned, leased, 79.23 controlled, used, or occupied by a water or sewer or water and 79.24 sewer commission or board for any purpose referred to in 79.25 sections 116A.01 to 116A.26 are declared to be acquired, owned, 79.26 leased, controlled, used and occupied for public, governmental, 79.27 and municipal purposes, and shall be exempt from taxation by the 79.28 state or any political subdivision of the state, except to the 79.29 extent that the property is subject to the sales and use tax 79.30 under chapter 297A, provided that such properties shall be 79.31 subject to special assessments levied by a political subdivision 79.32 for a local improvement in amounts proportionate to and not 79.33 exceeding the special benefit received by the properties from 79.34 such improvement. No possible use of any such properties in any 79.35 manner different from their use as part of a distribution or 79.36 disposal system at the time shall be considered in determining 80.1 the special benefit received by such properties. All such 80.2 assessments shall be subject to final confirmation by the county 80.3 board or boards in whose jurisdiction the system is constructed 80.4 and whose determination of the benefits shall be conclusive upon 80.5 the political subdivision levying the assessment. 80.6 Sec. 3. Minnesota Statutes 1998, section 360.035, is 80.7 amended to read: 80.8 360.035 [EXEMPTION FROM TAXATION.] 80.9 Any properties, real or personal, acquired, owned, leased, 80.10 controlled, used, or occupied by a municipality for any of the 80.11 purposes of sections 360.011 to 360.076, are declared to be 80.12 acquired, owned, leased, controlled, used, or occupied for 80.13 public, governmental, and municipal purposes, and shall be 80.14 exempt from taxation by the state or any of its political 80.15 subdivisions, except to the extent that the property is subject 80.16 to the sales and use tax under chapter 297A. Nothing contained 80.17 in sections 360.011 to 360.076 shall be construed as exempting 80.18 properties, real or personal, leased from the municipality to a 80.19 tenant or lessee who is a private person, association, or 80.20 corporation from assessments or taxes. Leased municipal airport 80.21 property that is not located at the airport operated by the 80.22 metropolitan airports commission shall not be subject to payment 80.23 of any portion of rentals under section 272.68, subdivision 3. 80.24 Sec. 4. Minnesota Statutes 1998, section 458A.09, is 80.25 amended to read: 80.26 458A.09 [EXEMPTION FROM TAXATION.] 80.27 Notwithstanding any other provision of law to the contrary, 80.28 the properties, moneys, and other assets of the commission, and 80.29 all revenues or other income of the commission shall be exempt 80.30 from all taxation, licenses, fees, or charges of any kind 80.31 imposed by the state or by any county, municipality, political 80.32 subdivision, taxing district, or other public agency or body of 80.33 the state, except to the extent that the property is subject to 80.34 the sales and use tax under chapter 297A. 80.35 Sec. 5. Minnesota Statutes 1998, section 458A.30, is 80.36 amended to read: 81.1 458A.30 [TAX EXEMPTION.] 81.2 Notwithstanding any other provisions of law to the 81.3 contrary, the property, moneys, and other assets of the 81.4 authority, or revenues or other income of the authority, and all 81.5 bonds, certificates of indebtedness, or other obligations issued 81.6 by the authority, with the approval of the city council, and the 81.7 interest thereon, shall be exempt from all taxation, licenses, 81.8 fees, or charges of any kind imposed by the state of Minnesota, 81.9 or by any county, municipality, political subdivision, taxing 81.10 district, or other public agency or body of the state, including 81.11 but not limited to the excise tax on gasoline or special fuel 81.12 under chapter 296A, except to the extent that the property is 81.13 subject to the sales and use tax under chapter 297A. 81.14 Sec. 6. Minnesota Statutes 1998, section 458D.23, is 81.15 amended to read: 81.16 458D.23 [PROPERTY EXEMPT FROM TAXATION.] 81.17 Any properties, real or personal, owned, leased, 81.18 controlled, used, or occupied by the sanitary sewer board for 81.19 any purpose under sections 458D.01 to 458D.24 are declared to be 81.20 acquired, owned, leased, controlled, used and occupied for 81.21 public, governmental, and municipal purposes, and shall be 81.22 exempt from taxation by the state or any political subdivision 81.23 of the state, except to the extent that the property is subject 81.24 to the sales and use tax under chapter 297A, provided that such 81.25 properties shall be subject to special assessments levied by a 81.26 political subdivision for a local improvement in amounts 81.27 proportionate to and not exceeding the special benefit received 81.28 by the properties from such improvement. No possible use of any 81.29 such properties in any manner different from their use as part 81.30 of a disposal system at the time shall be considered in 81.31 determining the special benefit received by such properties. 81.32 All such assessments shall be subject to final approval by the 81.33 board, whose determination of the benefits shall be conclusive 81.34 upon the political subdivision levying the assessment. All 81.35 bonds, certificates of indebtedness or other obligations of the 81.36 board, and the interest thereon, shall be exempt from taxation 82.1 by the state or any political subdivision of the state. 82.2 Sec. 7. Minnesota Statutes 1999 Supplement, section 82.3 469.101, subdivision 2, is amended to read: 82.4 Subd. 2. [ACQUIRE PROPERTY.] The economic development 82.5 authority may acquire by lease, purchase, gift, devise, or 82.6 condemnation proceedings the needed right, title, and interest 82.7 in property to create economic development districts. It shall 82.8 pay for the property out of money it receives under sections 82.9 469.090 to 469.108. It may hold and dispose of the property 82.10 subject to the limits and conditions in sections 469.090 to 82.11 469.108. The title to property acquired by condemnation or 82.12 purchase must be in fee simple, absolute. The authority may 82.13 accept an interest in property acquired in another way subject 82.14 to any condition of the grantor or donor. The condition must be 82.15 consistent with the proper use of the property under sections 82.16 469.090 to 469.108. Property acquired, owned, leased, 82.17 controlled, used, or occupied by the authority for any of the 82.18 purposes of this section is for public governmental and 82.19 municipal purposes and is exempt from taxation by the state or 82.20 by its political subdivisions, except to the extent that the 82.21 property is subject to the sales and use tax under chapter 82.22 297A. The exemption applies only while the authority holds 82.23 property for its own purpose. The exemption is subject to the 82.24 provisions of section 272.02, subdivision 39. When the property 82.25 is sold it becomes subject to taxation. 82.26 Sec. 8. Minnesota Statutes 1998, section 469.127, is 82.27 amended to read: 82.28 469.127 [TAX STATUS.] 82.29 The pedestrian skyway system, underground pedestrian 82.30 concourse, the people mover system, and publicly owned parking 82.31 structures are declared to be public property to be used for 82.32 essential public and governmental purposes. They are exempt 82.33 from all taxes and special assessments of the city, county, 82.34 state, or any political subdivision thereof, except to the 82.35 extent that the property is subject to the sales and use tax 82.36 under chapter 297A. Taxes do not include charges for utilities 83.1 and special services such as heat, water, electricity, gas, 83.2 sewage disposal, or garbage removal. 83.3 Sec. 9. Minnesota Statutes 1998, section 473.448, is 83.4 amended to read: 83.5 473.448 [TRANSIT ASSETS EXEMPT FROM TAX BUT MUST PAY 83.6 ASSESSMENTS.] 83.7 (a) Notwithstanding any other provision of law to the 83.8 contrary, the properties, moneys, and other assets of the 83.9 council used for transit operations or for special 83.10 transportation services and all revenues or other income from 83.11 the council's transit operations or special transportation 83.12 services are exempt from all taxation, licenses, or fees imposed 83.13 by the state or by any county, municipality, political 83.14 subdivision, taxing district, or other public agency or body of 83.15 the state, except to the extent that the property is subject to 83.16 the sales and use tax under chapter 297A. 83.17 (b) Notwithstanding paragraph (a), the council's transit 83.18 properties are subject to special assessments levied by a 83.19 political subdivision for a local improvement in amounts 83.20 proportionate to and not exceeding the special benefit received 83.21 by the properties from the improvement. 83.22 Sec. 10. Minnesota Statutes 1998, section 473.545, is 83.23 amended to read: 83.24 473.545 [PROPERTY EXEMPT FROM TAXATION.] 83.25 Any properties, real or personal, owned, leased, 83.26 controlled, used, or occupied by the council for any purpose 83.27 referred to in Minnesota Statutes 1984, section 473.502, are 83.28 declared to be acquired, owned, leased, controlled, used and 83.29 occupied for public, governmental, and municipal purposes, and 83.30 shall be exempt from taxation by the state or any political 83.31 subdivision of the state, except to the extent that the property 83.32 is subject to the sales and use tax under chapter 297A, provided 83.33 that such properties shall be subject to special assessments 83.34 levied by a political subdivision for a local improvement in 83.35 amounts proportionate to and not exceeding the special benefit 83.36 received by the properties from such improvement. No possible 84.1 use of any such properties in any manner different from their 84.2 use as part of the metropolitan disposal system at the time 84.3 shall be considered in determining the special benefit received 84.4 by such properties. All such assessments shall be subject to 84.5 final confirmation by the metropolitan council, whose 84.6 determination of the benefits shall be conclusive upon the 84.7 political subdivision levying the assessment. 84.8 Sec. 11. Minnesota Statutes 1998, section 473.608, 84.9 subdivision 2, is amended to read: 84.10 Subd. 2. [GETTING AIRPORT PROPERTY.] It may acquire by 84.11 lease, purchase, gift, devise, or condemnation proceedings all 84.12 necessary right, title, and interest in and to lands and 84.13 personal property required for airports and all other real or 84.14 personal property required for the purposes contemplated by 84.15 sections 473.601 to 473.679, within the metropolitan area, pay 84.16 therefor out of funds obtained as hereinafter provided, and hold 84.17 and dispose of the same, subject to the limitations and 84.18 conditions herein prescribed except that the corporation may not 84.19 acquire by any means lands or personal property for a major new 84.20 airport. Title to any such property acquired by condemnation or 84.21 purchase shall be in fee simple, absolute, unqualified in any 84.22 way, but any such real or personal property or interest therein 84.23 otherwise acquired may be so acquired or accepted subject to any 84.24 condition which may be imposed thereon by the grantor or donor 84.25 and agreed to by the corporation, not inconsistent with the 84.26 proper use of the property by the corporation for the purposes 84.27 herein provided. Any properties, real or personal, acquired, 84.28 owned, leased, controlled, used, and occupied by the corporation 84.29 for any of the purposes of sections 473.601 to 473.679, are 84.30 declared to be acquired, owned, leased, controlled, used, and 84.31 occupied for public, governmental, and municipal purposes, and 84.32 shall be exempt from taxation by the state or any of its 84.33 political subdivisions, except to the extent that the property 84.34 is subject to the sales and use tax under chapter 297A. Nothing 84.35 contained in sections 473.601 to 473.679, shall be construed as 84.36 exempting properties, real or personal, leased from the 85.1 metropolitan airports commission to a tenant or lessee who is a 85.2 private person, association, or corporation from assessments or 85.3 taxes.