SF 3162

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; modifying the exemption for light rail transit vehicle and
repair parts and expanding it to the Northstar Corridor rail project; exempting
purchases for materials and supplies used in the construction of the Central
Corridor light rail transit and Northstar Corridor rail projects; amending
Minnesota Statutes 2006, sections 297A.70, subdivision 2; 297A.71, by adding
subdivisions; 297A.75.

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

Section 1.

Minnesota Statutes 2006, section 297A.70, subdivision 2, is amended to
read:

Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) the Metropolitan Council new text begin or the Department of Transportation new text end , for its purchases
of vehicles and repair parts to equip operations provided for in deleted text begin section deleted text end new text begin sections 174.90 and
new text end 473.4051 new text begin , including, but not limited to, the Northstar Corridor rail project new text end ;

(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and

(6) sales to public libraries, public library systems, multicounty, multitype library
systems as defined in section 134.001, county law libraries under chapter 134A, state
agency libraries, the state library under section 480.09, and the Legislative Reference
Library.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5,
except for leases entered into by the United States or its agencies or instrumentalities; or

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, and soft drinks, except for lodging, prepared food, candy,
and soft drinks purchased directly by the United States or its agencies or instrumentalities.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after January 1, 2007.
new text end

Sec. 2.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 40. new text end

new text begin Construction materials; Central Corridor light rail transit. new text end

new text begin Materials
and supplies used or consumed in, and equipment incorporated into, the construction
or improvement of the Central Corridor light rail transit line and associated facilities
including, but not limited to, stations, park-and-ride facilities, and maintenance facilities,
are exempt. The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied and then refunded in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after January 1, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 41. new text end

new text begin Construction materials; Northstar Corridor rail project. new text end

new text begin Materials
and supplies used or consumed in, and equipment incorporated into, the construction or
improvement of the Northstar Corridor rail project and associated facilities by a public
entity or under a contract with a public entity including, but not limited to, track and signal
improvements, stations, park-and-ride facilities, and maintenance facilities, are exempt.
The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
applied and then refunded in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after January 1, 2007.
new text end

Sec. 4.

Minnesota Statutes 2006, section 297A.75, is amended to read:

297A.75 REFUND; APPROPRIATION.

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) capital equipment exempt under section 297A.68, subdivision 5;

(2) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(3) building materials for mineral production facilities exempt under section
297A.71, subdivision 14;

(4) building materials for correctional facilities under section 297A.71, subdivision
3;

(5) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;

(6) elevators and building materials exempt under section 297A.71, subdivision 12;

(7) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;

(8) materials, supplies, fixtures, furnishings, and equipment for a county law
enforcement and family service center under section 297A.71, subdivision 26;

(9) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;

(10) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(11) equipment and materials used for the generation, transmission, and distribution
of electrical energy and an aerial camera package exempt under section 297A.68,
subdivision 37; deleted text begin and
deleted text end

(12) tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section 297A.68, subdivision 41 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (13) materials, supplies, and equipment for construction or improvement of projects
and facilities under section 297A.71, subdivisions 40 and 41.
new text end

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;

(2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental
subdivision;

(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (9), the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities; deleted text begin and deleted text end

(7) for subdivision 1, clauses (11) and (12), the owner of the qualifying business deleted text begin . deleted text end new text begin ; and
new text end

new text begin (8) for subdivision 1, clause (13), the applicant must be the governmental entity that
owns or contracts for the project or facility.
new text end

Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10),
(11), deleted text begin or deleted text end (12) new text begin , or (13) new text end , the contractor, subcontractor, or builder must furnish to the refund
applicant a statement including the cost of the exempt items and the taxes paid on the
items unless otherwise specifically provided by this subdivision. The provisions of
sections 289A.40 and 289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

Subd. 4.

Interest.

Interest must be paid on the refund at the rate in section 270C.405
from 90 days after the refund claim is filed with the commissioner for taxes paid under
subdivision 1.

Subd. 5.

Appropriation.

The amount required to make the refunds is annually
appropriated to the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end