Minnesota Session Laws - 1983, Regular Session

  

                         Laws of Minnesota 1983 

                        CHAPTER 327--H.F.No. 672
           An act relating to taxation; sales and use; clarifying 
          the taxability or exempt status of certain items or 
          transactions; allowing for a sales tax refund in 
          certain instances; providing penalties for certain 
          operators or misuse of exemption certificates; 
          clarifying filing dates and penalties for not timely 
          filing or paying the tax; requiring a notice on the 
          sales tax return form; authorizing the filing of 
          security and the use of sampling; providing 
          restrictions on refunds; clarifying payments required 
          before appeal; eliminating the fee for permits; 
          amending Minnesota Statutes 1982, sections 297A.01, 
          subdivisions 3 and 4; 297A.211, by adding a 
          subdivision; 297A.25, subdivision 1; 297A.26, by 
          adding a subdivision; 297A.27, subdivision 1; 
          297A.275; 297A.28; 297A.31, subdivision 1; 297A.35, 
          subdivision 1, and by adding a subdivision; 297A.391; 
          and 297B.03; proposing new law coded in Minnesota 
          Statutes, chapter 297A; repealing Minnesota Statutes 
          1982, sections 297A.05 and 297A.251. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 297A.01, 
subdivision 3, is amended to read: 
    Subd. 3.  A "sale" and a "purchase" includes, but is not 
limited to, each of the following transactions: 
    (a) Any transfer of title or possession, or both, of 
tangible personal property, whether absolutely or conditionally, 
and the leasing of or the granting of a license to use or 
consume tangible personal property other than manufactured homes 
used for residential purposes for a continuous period of 30 days 
or more, for a consideration in money or by exchange or barter. 
"Sales" also include the transfer of computer software, meaning 
information and directions which dictate the function to be 
performed by data processing equipment and which are sold 
without adaptation to the specific requirements of the 
purchaser.  This type of computer software, whether contained on 
tape, discs, cards, or other devices, shall be considered 
tangible personal property; 
    (b) The production, fabrication, printing or processing of 
tangible personal property for a consideration for consumers who 
furnish either directly or indirectly the materials used in the 
production, fabrication, printing or processing; 
    (c) The furnishing, preparing or serving for a 
consideration of food, meals or drinks, not including hospitals, 
sanatoriums, nursing homes or senior citizens homes, meals or 
drinks purchased for and served exclusively to individuals who 
are 60 years of age or over and their spouses or to the 
handicapped and their spouses by governmental agencies, 
nonprofit organizations, agencies, or churches or pursuant to 
any program funded in whole or part through 42 USCA sections 
3001 through 3045, wherever delivered, prepared or served, meals 
and lunches served at public and private schools, universities 
or colleges, or the occasional meal thereof by a charitable or 
church organization.  Notwithstanding section 297A.25, 
subdivision 1, clause (a), taxable food or meals include, but is 
not limited to, the following:  
     (i) heated food or drinks;  
     (ii) sandwiches prepared by the retailer;  
     (iii) single sales of prepackaged ice cream or ice milk 
novelties prepared by the retailer; 
     (iv) hand-prepared or dispensed ice cream or ice milk 
products including cones, sundaes, and snow cones;  
     (v) soft drinks and other beverages prepared or served by 
the retailer;  
     (vi) gum;  
     (vii) ice;  
     (viii) all food sold in vending machines;  
     (ix) party trays prepared by the retailers; and 
    (x) all meals and single servings of packaged snack food, 
single cans or bottles of pop, sold in restaurants and bars; 
    (d) The granting of the privilege of admission to places of 
amusement or athletic events and the privilege of use of 
amusement devices or athletic facilities; 
    (e) The furnishing for a consideration of lodging and 
related services by a hotel, rooming house, tourist court, motel 
or trailer camp and of the granting of any similar license to 
use real property other than the renting or leasing thereof for 
a continuous period of 30 days or more; 
    (f) The furnishing for a consideration of electricity, gas, 
water, or steam for use or consumption within this state, or 
local exchange telephone service and intrastate toll service; 
the tax imposed on amounts paid for telephone services is the 
liability of and shall be paid by the person paying for the 
services.  Sales by municipal corporations in a proprietary 
capacity are included in the provisions of this clause.  The 
furnishing of water and sewer services for residential use shall 
not be considered a sale;  
    (g) The furnishing for a consideration of cable television 
services, including charges for basic monthly service, charges 
for monthly premium service, and charges for any other similar 
cable television services;  
     (h) Notwithstanding sections 297A.01, subdivision 4, and 
297A.25, subdivision 1, clause (h), the sales of horses 
including claiming sales and fees paid for breeding a stallion 
to a mare.  This clause applies to sales and fees with respect 
to a horse to be used for racing whose birth has been recorded 
by the Jockey Club or the United States Trotting Association or 
the American Quarter Horse Association but shall not apply with 
respect to the sale of a horse bred and born in the state of 
Minnesota. 
    Sec. 2.  Minnesota Statutes 1982, section 297A.01, 
subdivision 4, is amended to read: 
    Subd. 4.  A "retail sale" or "sale at retail" means a sale 
for any purpose other than resale in the regular course of 
business.  Property utilized by the owner only by leasing such 
property to others or by holding it in an effort to so lease it, 
and which is put to no use by the owner other than resale after 
such lease or effort to lease, shall be considered property 
purchased for resale.  Sales of building materials, supplies and 
equipment to owners, contractors, subcontractors or builders for 
the erection of buildings or the alteration, repair or 
improvement of real property are "retail sales" or "sales at 
retail" in whatever quantity sold and whether or not for purpose 
of resale in the form of real property or otherwise.  A sale of 
carpeting, linoleum, or other similar floor covering which 
includes installation of the carpeting, linoleum, or other 
similar floor covering is a contract for the improvement of real 
property.  Aircraft and parts for the repair thereof purchased 
by a nonprofit, incorporated flying club or association utilized 
solely by the corporation by leasing such aircraft to 
shareholders of the corporation shall not be considered property 
purchased for resale.  The leasing of the aircraft to the 
shareholders by the flying club or association shall not be 
considered a sale notwithstanding subdivision 3 if the tax 
imposed by this chapter was paid on the initial purchase as 
provided by this subdivision. 
    Leasing of aircraft utilized by the owner only a lessee for 
the purpose of being leased leasing to others, whether or not 
the lessee also utilizes the aircraft for flight instruction 
where no separate charge is made for aircraft rental or for 
charter service, or by holding the aircraft in an effort to 
lease it, and which is put to no use by the owner other than 
resale after the lease, shall be considered aircraft purchased a 
purchase for resale; provided, however, that a proportionate 
share of the lease payment reflecting use for flight instruction 
or charter service is subject to tax pursuant to section 297A.14.
    Sec. 3.  [297A.041] [OPERATOR OF FLEA MARKETS; SELLER'S 
PERMITS REQUIRED; PENALTY.] 
    The operator of a flea market, craft show, antique show, 
coin show, stamp show, comic book show, or similar selling 
event, as a prerequisite to renting or leasing space on the 
premises owned or controlled by the operator to a person 
desiring to engage in or conduct business as a seller, shall 
obtain evidence that the seller is the holder of a valid 
seller's permit issued pursuant to section 297A.04, or a written 
statement from the seller that he is not offering for sale any 
item that is taxable under this chapter.  
    Flea market, craft show, antique show, coin show, stamp 
show, comic book show, or similar selling event, as used in this 
section, means an activity involving a series of sales 
sufficient in number, scope, and character to constitute a 
regular course of business, and which would not qualify as an 
isolated or occasional sale pursuant to section 297A.25, 
subdivision 1, clause (k).  
    Any operator who fails or refuses to comply with the 
provisions of this section shall be subject to a penalty payable 
to the commissioner of revenue of $100 for each day of each 
selling event that the operator fails to obtain evidence that 
the seller is the holder of a valid seller's permit issued 
pursuant to section 297A.04.  
    This section shall not apply to an operator of a flea 
market, craft show, antique show, coin show, stamp show, comic 
book show, or similar selling event which is held in conjunction 
with a community sponsored festival which has a duration of four 
or fewer consecutive days no more than once a year.  
    Sec. 4.  [297A.121] [USE OF EXEMPTION CERTIFICATES TO EVADE 
TAX; PENALTY.] 
    Any person who gives an exemption certificate for property 
which will be used for purposes other than the exemption claimed 
with the intent to evade payment to the seller of the amount of 
the tax applicable to the transaction shall be subject to a 
penalty payable to the commissioner of revenue of $100 for each 
transaction where an improper use of an exemption certificate 
has occurred.  
    Sec. 5.  Minnesota Statutes 1982, section 297A.211, is 
amended by adding a subdivision to read: 
    Subd. 3.  Any person who pays the tax to the seller as 
provided in section 297A.03 or pays the tax to the motor vehicle 
registrar as required by section 297B.02 and who meets the 
requirements of section 297A.211 at the time of the sale, except 
that the person has not registered as a retailer pursuant to 
section 297A.211 at the time of the sale, may register as a 
retailer, make a return, and file for a refund of the difference 
between the tax calculated under section 297A.02, 297A.14, or 
297B.02 and the tax calculated under subdivision 2.  The person 
must file for a refund within the time limitations provided in 
section 297A.35. Notwithstanding the provisions of section 
297A.35, subdivision 1, interest shall be allowed for any refund 
allowed under this subdivision only from the date on which the 
person has both registered as a retailer and filed a claim for 
refund.  
    Sec. 6.  Minnesota Statutes 1982, section 297A.25, 
subdivision 1, is amended to read: 
    Subdivision 1.  The following are specifically exempted 
from the taxes imposed by sections 297A.01 to 297A.44: 
    (a) The gross receipts from the sale of food products 
including but not limited to cereal and cereal products, butter, 
cheese, milk and milk products, oleomargarine, meat and meat 
products, fish and fish products, eggs and egg products, 
vegetables and vegetable products, fruit and fruit products, 
spices and salt, sugar and sugar products, coffee and coffee 
substitutes, tea, cocoa and cocoa products, and food products 
which are not taxable pursuant to section 297A.01, subdivision 
3, clause (c) and which are sold by a retailer, organized as a 
nonprofit corporation or association, within a place located on 
property owned by the state or an agency or instrumentality of 
the state, the entrance to which is subject to an admission 
charge.  This exemption does not include the following:  
    (i) candy and candy products; 
    (ii) carbonated beverages, beverages commonly referred to 
as soft drinks containing less than 15 percent fruit juice, or 
bottled water other than noncarbonated and noneffervescent 
bottled water sold in individual containers of one gallon or 
more in size; 
     (b) The gross receipts from the sale of prescribed drugs 
and medicine intended for use, internal or external, in the 
cure, mitigation, treatment or prevention of illness or disease 
in human beings and products consumed by humans for the 
preservation of health, including prescription glasses, 
therapeutic and prosthetic devices, but not including cosmetics 
or toilet articles notwithstanding the presence of medicinal 
ingredients therein; 
     (c) The gross receipts from the sale of and the storage, 
use or other consumption in Minnesota of tangible personal 
property, tickets, or admissions, electricity, gas, or local 
exchange telephone service, which under the Constitution or laws 
of the United States or under the Constitution of Minnesota, the 
state of Minnesota is prohibited from taxing; 
     (d) The gross receipts from the sale of tangible personal 
property (i) which, without intermediate use, is shipped or 
transported outside Minnesota by the purchaser and thereafter 
used in a trade or business or is stored, processed, fabricated 
or manufactured into, attached to or incorporated into other 
tangible personal property transported or shipped outside 
Minnesota and thereafter used in a trade or business outside 
Minnesota, and which is not thereafter returned to a point 
within Minnesota, except in the course of interstate commerce 
(storage shall not constitute intermediate use); provided that 
the property is not subject to tax in that state or country to 
which it is transported for storage or use, or, if subject to 
tax in that other state, that state allows a similar exemption 
for property purchased therein and transported to Minnesota for 
use in this state; except that sales of tangible personal 
property that is shipped or transported for use outside 
Minnesota shall be taxed at the rate of the use tax imposed by 
the state to which the property is shipped or transported, 
unless that state has no use tax, in which case the sale shall 
be taxed at the rate generally imposed by this state; and 
provided further that sales of tangible personal property to be 
used in other states or countries as part of a maintenance 
contract shall be specifically exempt; or (ii) which the seller 
delivers to a common carrier for delivery outside Minnesota, 
places in the United States mail or parcel post directed to the 
purchaser outside Minnesota, or delivers to the purchaser 
outside Minnesota by means of the seller's own delivery 
vehicles, and which is not thereafter returned to a point within 
Minnesota, except in the course of interstate commerce; 
    (e) The gross receipts from the sale of packing materials 
used to pack and ship household goods, the ultimate destination 
of which is outside the state of Minnesota and which are not 
thereafter returned to a point within Minnesota, except in the 
course of interstate commerce; 
    (f) The gross receipts from the sale of and storage, use or 
consumption of petroleum products upon which a tax has been 
imposed under the provisions of chapter 296, whether or not any 
part of said tax may be subsequently refunded; 
    (g) The gross receipts from the sale of clothing and 
wearing apparel except the following: 
    (i) all articles commonly or commercially known as jewelry, 
whether real or imitation; pearls, precious and semi-precious 
stones, and imitations thereof; articles made of, or ornamented, 
mounted or fitted with precious metals or imitations thereof; 
watches; clocks; cases and movements for watches and clocks; 
gold, gold-plated, silver, or sterling flatware or hollow ware 
and silver-plated hollow ware; opera glasses; lorgnettes; marine 
glasses; field glasses and binoculars. 
     (ii) articles made of fur on the hide or pelt, and articles 
of which such fur is the component material or chief value, but 
only if such value is more than three times the value of the 
next most valuable component material. 
     (iii) perfume, essences, extracts, toilet waters, 
cosmetics, petroleum jellies, hair oils, pomades, hair 
dressings, hair restoratives, hair dyes, aromatic cachous and 
toilet powders.  The tax imposed by this act shall not apply to 
lotion, oil, powder, or other article intended to be used or 
applied only in the case of babies. 
     (iv) trunks, valises, traveling bags, suitcases, satchels, 
overnight bags, hat boxes for use by travelers, beach bags, 
bathing suit bags, brief cases made of leather or imitation 
leather, salesmen's sample and display cases, purses, handbags, 
pocketbooks, wallets, billfolds, card, pass, and key cases and 
toilet cases. 
     (h) The gross receipts from the sale of and the storage, 
use, or consumption of all materials, including chemicals, 
fuels, petroleum products, lubricants, packaging materials, 
including returnable containers used in packaging food and 
beverage products, feeds, seeds, fertilizers, electricity, gas 
and steam, used or consumed in agricultural or industrial 
production of personal property intended to be sold ultimately 
at retail, whether or not the item so used becomes an ingredient 
or constituent part of the property produced.  Such production 
shall include, but is not limited to, research, development, 
design or production of any tangible personal property, 
manufacturing, processing (other than by restaurants and 
consumers) of agricultural products whether vegetable or animal, 
commercial fishing, refining, smelting, reducing, brewing, 
distilling, printing, mining, quarrying, lumbering, generating 
electricity and the production of road building materials.  Such 
production shall not include painting, cleaning, repairing or 
similar processing of property except as part of the original 
manufacturing process.  Machinery, equipment, implements, tools, 
accessories, appliances, contrivances, furniture and fixtures, 
used in such production and fuel, electricity, gas or steam used 
for space heating or lighting, are not included within this 
exemption; however, accessory tools, equipment and other short 
lived items, which are separate detachable units used in 
producing a direct effect upon the product, where such items 
have an ordinary useful life of less than 12 months, are 
included within the exemption provided herein; 
     (i) The gross receipts from the sale of and storage, use or 
other consumption in Minnesota of tangible personal property 
(except as provided in section 297A.14) which is used or 
consumed in producing any publication regularly issued at 
average intervals not exceeding three months, and any such 
publication.  For purposes of this subsection, "publication" as 
used herein shall include, without limiting the foregoing, a 
legal newspaper as defined by Minnesota Statutes 1965, section 
331.02, and any supplements or enclosures with or part of said 
newspaper; and the gross receipts of any advertising contained 
therein or therewith shall be exempt.  For this purpose, 
advertising in any such publication shall be deemed to be a 
service and not tangible personal property, and persons or their 
agents who publish or sell such newspapers shall be deemed to be 
engaging in a service with respect to gross receipts realized 
from such newsgathering or publishing activities by them, 
including the sale of advertising.  Machinery, equipment, 
implements, tools, accessories, appliances, contrivances, 
furniture and fixtures used in such publication and fuel, 
electricity, gas or steam used for space heating or lighting, 
are not exempt; 
    (j) The gross receipts from all sales, including sales in 
which title is retained by a seller or a vendor or is assigned 
to a third party under an installment sale or lease purchase 
agreement under section 465.71, of tangible personal property 
to, and all storage, use or consumption of such property by, the 
United States and its agencies and instrumentalities or a state 
and its agencies, instrumentalities and political subdivisions. 
Sales exempted by this clause include sales pursuant to section 
297A.01, subdivision 3, clauses (d) and (f).  This exemption 
shall not apply to 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.  This exemption does not apply to 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; 
    (k) The gross receipts from the isolated or occasional sale 
of tangible personal property in Minnesota not made in the 
normal course of business of selling that kind of property, and 
the storage, use, or consumption of property acquired as a 
result of such a sale.  For purposes of this clause, sales by a 
nonprofit organization shall be deemed to be "isolated or 
occasional" if they occur at sale events that have a duration of 
three or fewer consecutive days.  The granting of the privilege 
of admission to places of amusement and the privilege of use of 
amusement devices by a nonprofit organization at an isolated or 
occasional event conducted on property owned or leased for a 
continuous period of more than 30 days by the nonprofit 
organization are also exempt.  The exemption provided for 
isolated sales of tangible personal property and of the granting 
of admissions or the privilege of use of amusement devices by 
nonprofit organizations pursuant to this clause shall be 
available only if the sum of the days on which the organization 
and any subsidiary nonprofit organization sponsored by it that 
does not have a separate sales tax exemption permit conduct 
sales of tangible personal property, plus the days with respect 
to which the organization charges for the use of amusement 
devices or admission to places of amusement, does not exceed 
eight days in a calendar year.  For purposes of this clause, a 
"nonprofit organization" means any corporation, society, 
association, foundation, or institution organized and operated 
exclusively for charitable, religious, or educational purposes, 
no part of the net earnings of which inures to the benefit of a 
private individual; 
    (l) The gross receipts from sales of rolling stock and the 
storage, use or other consumption of such property by railroads, 
freight line companies, sleeping car companies and express 
companies taxed on the gross earnings basis in lieu of ad 
valorem taxes.  For purposes of this clause "rolling stock" is 
defined as the portable or moving apparatus and machinery of any 
such company which moves on the road, and includes, but is not 
limited to, engines, cars, tenders, coaches, sleeping cars and 
parts necessary for the repair and maintenance of such rolling 
stock. 
    (m) The gross receipts from sales of airflight equipment 
and the storage, use or other consumption of such property by 
airline companies taxed under the provisions of sections 270.071 
to 270.079.  For purposes of this clause, "airflight equipment" 
includes airplanes and parts necessary for the repair and 
maintenance of such airflight equipment, and flight simulators. 
    (n) The gross receipts from the sale of telephone central 
office telephone equipment used in furnishing intrastate and 
interstate telephone service to the public. 
     (o) The gross receipts from the sale of and the storage, 
use or other consumption by persons taxed under the in lieu 
provisions of chapter 298, of mill liners, grinding rods and 
grinding balls which are substantially consumed in the 
production of taconite, the material of which primarily is added 
to and becomes a part of the material being processed. 
    (p) The gross receipts from the sale of tangible personal 
property to, and the storage, use or other consumption of such 
property by, any corporation, society, association, foundation, 
or institution organized and operated exclusively for 
charitable, religious or educational purposes if the property 
purchased is to be used in the performance of charitable, 
religious or educational functions, or any senior citizen group 
or association of groups that in general limits membership to 
persons age 55 or older and is organized and operated 
exclusively for pleasure, recreation and other nonprofit 
purposes, no part of the net earnings of which inures to the 
benefit of any private shareholders.  Sales exempted by this 
clause include sales pursuant to section 297A.01, subdivision 3, 
clauses (d) and (f).  This exemption shall not apply to 
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.  This exemption 
does not apply to 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; 
    (q) The gross receipts from the sale of caskets and burial 
vaults; 
    (r) The gross receipts from the sale of an automobile or 
other conveyance if the purchaser is assisted by a grant from 
the United States in accordance with 38 United States Code, 
Section 1901, as amended. 
     (s) The gross receipts from the sale to the licensed 
aircraft dealer of an aircraft for which a commercial use permit 
has been issued pursuant to section 360.654, if the aircraft is 
resold while the permit is in effect. 
     (t) The gross receipts from the sale of building materials 
to be used in the construction or remodeling of a residence when 
the construction or remodeling is financed in whole or in part 
by the United States in accordance with 38 United States Code, 
Sections 801 to 805, as amended.  This exemption shall not be 
effective at time of sale of the materials to contractors, 
subcontractors, builders or owners, but shall be applicable only 
upon a claim for refund to the commissioner of revenue filed by 
recipients of the benefits provided in Title 38 United States 
Code, Chapter 21, as amended.  The commissioner shall provide by 
regulation for the refund of taxes paid on sales exempt in 
accordance with this paragraph. 
     (u) The gross receipts from the sale of textbooks which are 
prescribed for use in conjunction with a course of study in a 
public or private school, college, university and business or 
trade school to students who are regularly enrolled at such 
institutions.  For purposes of this clause a "public school" is 
defined as one that furnishes course of study, enrollment and 
staff that meets standards of the state board of education and a 
private school is one which under the standards of the state 
board of education, provides an education substantially 
equivalent to that furnished at a public school.  Business and 
trade schools shall mean such schools licensed pursuant to 
section 141.25. 
     (v) The gross receipts from the sale of and the storage of 
material designed to advertise and promote the sale of 
merchandise or services, which material is purchased and stored 
for the purpose of subsequently shipping or otherwise 
transferring outside the state by the purchaser for use 
thereafter solely outside the state of Minnesota. 
     (w) The gross receipt from the sale of residential heating 
fuels in the following manner: 
     (i) all fuel oil, coal, wood, steam, propane gas, and L.P.  
gas sold to residential customers for residential use; 
     (ii) natural gas sold for residential use to customers who 
are metered and billed as residential users and who use natural 
gas for their primary source of residential heat, for the 
billing months of November, December, January, February, March 
and April; 
     (iii) electricity sold for residential use to customers who 
are metered and billed as residential users and who use 
electricity for their primary source of residential heat, for 
the billing months of November, December, January, February, 
March and April. 
     (x) The gross receipts from the sale or use of tickets or 
admissions to the premises of or events sponsored by an 
association, corporation or other group of persons which 
provides an opportunity for citizens of the state to participate 
in the creation, performance or appreciation of the arts and 
which qualifies as a tax-exempt organization within the meaning 
of Minnesota Statutes 1980, section 290.05, subdivision 1, 
clause (i). 
    (y) The gross receipts from either the sales to or the 
storage, use or consumption of tangible personal property by an 
organization of military service veterans or an auxiliary unit 
of an organization of military service veterans, provided that: 
    (i) the organization or auxiliary unit is organized within 
the state of Minnesota and is exempt from federal taxation 
pursuant to section 501(c), clause (19), of the Internal Revenue 
Code as amended through December 31, 1978 1982; and 
    (ii) the tangible personal property which is sold to or 
stored, used or consumed by the organization or auxiliary unit 
is for charitable, civic, educational, or nonprofit uses and not 
for social, recreational, pleasure or profit uses. 
    (z) The gross receipts from the sale of sanitary napkins, 
tampons, or similar items used for feminine hygiene. 
    Sec. 7.  Minnesota Statutes 1982, section 297A.26, is 
amended by adding a subdivision to read:  
    Subd. 3.  The sales tax return form must include printed 
notice in eight point type or larger that the return and payment 
must be received by the commissioner no later than the due date. 
    Sec. 8.  Minnesota Statutes 1982, section 297A.27, 
subdivision 1, is amended to read: 
    Subdivision 1.  Except as provided in section 297A.275, on 
or before the 25th day of each month in which taxes imposed by 
sections 297A.01 to 297A.44 are payable, a return for the 
preceding reporting period shall be filed with the commissioner 
in such form as the commissioner may prescribe, verified by a 
written declaration that it is made under the criminal penalties 
for wilfully making a false return, and in addition shall 
contain a confession of judgment for the amount of the tax shown 
due thereon to the extent not timely paid.  Any person making 
sales at retail at two or more places of business may file a 
consolidated return subject to such regulations as the 
commissioner may prescribe.  
    Sec. 9.  Minnesota Statutes 1982, section 297A.275, is 
amended to read: 
    297A.275 [ACCELERATED PAYMENT OF JUNE LIABILITY.] 
    Every vendor having a liability of $1,500 or more in May 
1982 or in May of each subsequent year, shall remit the June 
liability in the manner required by this section.  
    On or before June 25, 1982, or June 25 of each subsequent 
year, the vendor shall remit the actual May liability and 
one-half of the estimated June liability to the commissioner and 
file the return on a form prescribed by the commissioner.  
    On or before August 25, 1982, or August 25 of each 
subsequent year, the vendor shall submit a return showing the 
actual June liability and paying any additional amount of tax 
not remitted in June.  A penalty is hereby imposed equal to ten 
percent of the actual June liability amount of June liability 
required to be paid in June less the amount remitted in June.  
However, the penalty shall not be imposed if the amount remitted 
in June equals the lesser of (a) 45 percent of the actual June 
liability, or (b) 50 percent of the preceding May's liability.  
    Sec. 10.  Minnesota Statutes 1982, section 297A.28, is 
amended to read: 
    297A.28 [SECURITY.] 
    Whenever he deems it necessary to insure compliance with 
sections 297A.01 to 297A.44 the commissioner may require a 
retailer subject thereto to deposit with him security in such 
form and in such amount as he may determine but not more than 
twice the estimated average liability for the period for which 
the returns are required to be filed, or $10,000, whichever 
amount is the lesser.  The amount of security may be increased 
or decreased by the commissioner, subject to the limitations 
herein provided.  The commissioner may sell property deposited 
as security at public auction if necessary in order to recover 
any tax or any amount required to be collected, including 
interest and penalties, if any.  Notice of the sale must be 
served upon the person who deposited the security personally, or 
by mail in the manner hereinafter prescribed for the service of 
a notice of a deficiency.  After any sale any surplus above the 
amount due not required as security under this section shall be 
returned to the person who deposited the security.  In lieu of 
security, the commissioner may require a retailer to file a 
bond, issued by a surety company authorized to transact business 
in this state and approved by the insurance commissioner as to 
solvency and responsibility.  
    Sec. 11.  Minnesota Statutes 1982, section 297A.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  The commissioner shall, as soon as 
practicable after a return is filed, examine the same and make 
any investigation or examination of the records and accounts of 
the person making the return that he deems necessary for 
determining its correctness.  The commissioner may use 
statistical or other sampling techniques consistent with 
generally acceptable accounting principles in examining the 
returns or records.  The tax computed on the basis of such 
examination shall be the tax to be paid.  If the tax found to be 
due exceeds the amount of the tax reported as due on the 
taxpayers return, such excess shall be paid to the commissioner 
within 60 days after notice of the amount and demand for its 
payment shall have been mailed to the person making the return.  
If the amount of the tax found due by the commissioner shall be 
less than that reported as due on the return, the excess shall 
be refunded to the person making the return in the manner 
provided by section 297A.35 (except that no demand therefor 
shall be necessary), if he has already paid the whole of such 
tax, or credited against any unpaid tax.  Except as otherwise 
provided in this chapter, no refundment shall be made except as 
provided in section 297A.35 after the expiration of three years 
after the filing of the return.  
    Sec. 12.  Minnesota Statutes 1982, section 297A.35, 
subdivision 1, is amended to read: 
    Subdivision 1.  A person who has, pursuant to the 
provisions of this chapter, paid to the commissioner an amount 
of tax for any period in excess of the amount legally due for 
that period, may file with the commissioner a claim for a refund 
of such excess subject to the conditions specified in 
subdivision 5.  Except as provided in subdivision 4 no such 
claim shall be entertained unless filed within two years after 
such tax was paid, or within three years from the filing of the 
return, whichever period is the longer.  The commissioner shall 
examine the claim and make and file written findings thereon 
denying or allowing the claim in whole or in part and shall mail 
a notice thereof to such person at the address stated upon the 
claim.  Any allowance shall include interest on the excess 
determined at a rate of six percent per annum from the date such 
excess was paid or collected until the date it is refunded or 
credited.  If such claim is allowed in whole or in part, the 
commissioner shall credit the amount of the allowance against 
any taxes under sections 297A.01 to 297A.44 due from the 
claimant and for the balance of said allowance, if any, the 
commissioner shall issue his certificate for the refundment of 
the excess paid, and the commissioner of finance shall cause 
such refund to be paid out of the proceeds of the taxes imposed 
by sections 297A.01 to 297A.44, as other state moneys are 
expended.  So much of the proceeds of such taxes as may be 
necessary are hereby appropriated for that purpose. 
    Sec. 13.  Minnesota Statutes 1982, section 297A.35, is 
amended by adding a subdivision to read: 
    Subd. 5.  If a vendor has collected from a purchaser and 
remitted to the state a tax on a transaction which is not 
subject to the tax imposed by this chapter, the tax shall be 
refundable to the vendor only if and to the extent that it will 
be credited to amounts due to the vendor by the purchaser or 
returned to the purchaser by the vendor.  
    Sec. 14.  Minnesota Statutes 1982, section 297A.391, is 
amended to read: 
    297A.391 [PAYMENT OF TAX PENDING APPEAL.] 
    When a taxpayer appeals his tax any liability assessed 
under this chapter to the tax court, and the amount in dispute 
is more than $4,000 $6,000, the entire amount of the tax, 
penalty, and interest assessed by the commissioner shall be paid 
at the time it is due unless permission to continue prosecution 
of the petition without payment is obtained as provided herein.  
The petitioner, upon ten days notice to the commissioner, may 
apply to the court for permission to continue prosecution of the 
petition without payment; and, if it is made to appear 
    (1) That the proposed review is to be taken in good faith;  
    (2) That there is probable cause to believe that the 
taxpayer may be held exempt from payment of the tax liability or 
that the tax liability may be determined to be less than 50 
percent of the amount due; and 
    (3) That it would work a substantial hardship upon 
petitioner to pay the tax liability, 
    the court may permit the petitioner to continue prosecution 
of the petition without payment, or may fix a lesser amount to 
be paid as a condition of continuing the prosecution of the 
petition.  
     Failure to make payment of the amount required when due 
shall operate automatically to dismiss the petition and all 
proceedings thereunder unless the payment is waived by an order 
of the court permitting the petitioner to continue prosecution 
of the petition without payment.  
    Sec. 15.  Minnesota Statutes 1982, section 297B.03, is 
amended to read: 
    297B.03 [EXEMPTIONS.] 
    There is specifically exempted from the provisions of this 
chapter and from computation of the amount of tax imposed by it 
the following: 
    (1) Purchase or use, including use under a lease purchase 
agreement or installment sales contract made pursuant to section 
465.71, of any motor vehicle by any person described in and 
subject to the conditions provided in section 297A.25, 
subdivision 1, clauses (j), (p) and (s) (r). 
    (2) Purchase or use of any motor vehicle by any person who 
was a resident of another state at the time of the purchase and 
who subsequently becomes a resident of Minnesota, provided the 
purchase occurred more than 60 days prior to the date such 
person moved his residence to the state of Minnesota. 
    (3) Purchase or use of any motor vehicle by any person 
making a valid election to be taxed under the provisions of 
section 297A.211. 
    (4) Purchase or use of any motor vehicle previously 
registered in the state of Minnesota by any corporation or 
partnership when such transfer constitutes a transfer within the 
meaning of sections 351 or 721 of the Internal Revenue Code of 
1954, as amended through December 31, 1974. 
    Sec. 16.  [REPEALER.] 
    Minnesota Statutes 1982, sections 297A.05 and 297A.251 are 
repealed.  
    Sec. 17.  [EFFECTIVE DATE.] 
    The amendments to clauses (a) and (g) of section 1 and 
sections 3 and 10, are effective July 1, 1983.  The new clause 
(h) added to section 1 is effective April 1, 1984.  Sections 2, 
4, 5, 8, 9, and 11 to 16 are effective the day following final 
enactment.  The amendments to clauses (j) and (p) of section 6, 
relating to construction contracts, are effective for contracts 
entered into after December 31, 1983.  The remainder of section 
6 is effective the day following final enactment.  Section 7 is 
effective January 1, 1984.  
    Approved June 14, 1983