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Minnesota Legislature

Office of the Revisor of Statutes

SF 3091

2nd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 2nd Engrossment

  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  1.32  recodification, prior provisions are repealed on the effective 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  The repealed provisions, however, 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.44 chapter 
  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.