Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 418-S.F.No. 3091
An act relating to taxation; recodifying the sales and
use tax laws; making style and form and clarifying
changes; amending Minnesota Statutes 1998, sections
37.13; 115A.69, subdivision 6; 116A.25; 289A.31,
subdivision 7; 360.035; 458A.09; 458A.30; 458D.23;
469.127; 473.448; 473.545; and 473.608, subdivision 2;
Minnesota Statutes 1999 Supplement, section 469.101,
subdivision 2; proposing coding for new law in
Minnesota Statutes, chapter 297A; repealing Minnesota
Statutes 1998, sections 297A.01; 297A.02; 297A.022;
297A.023; 297A.03; 297A.04; 297A.041; 297A.06;
297A.065; 297A.07; 297A.09; 297A.10; 297A.11; 297A.12;
297A.13; 297A.135; 297A.14; 297A.141; 297A.15;
297A.16; 297A.17; 297A.18; 297A.21; 297A.211;
297A.213; 297A.22; 297A.23; 297A.24; 297A.25;
297A.2531; 297A.2545; 297A.255; 297A.256; 297A.2571;
297A.2572; 297A.2573; 297A.259; 297A.26; 297A.28;
297A.33, subdivision 2; 297A.44, subdivision 1;
297A.46; 297A.47; and 297A.48.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
RECODIFICATION
Section 1. [PURPOSE AND EFFECT.]
Subdivision 1. [PURPOSE.] It is the intent of the
legislature to recodify Minnesota Statutes, chapter 297A, by
removing archaic, obsolete, and redundant language, and by
improving the organization and readability of the chapter. The
provisions of this act may not be used to determine the law in
effect prior to this act's effective date.
Subd. 2. [EFFECT.] Due to the complexity of the
recodification, prior provisions are repealed on the effective
date of the new provisions. The repealed provisions, however,
continue to remain in effect until superseded by the analogous
provision in the new law.
Sec. 2. Minnesota Statutes 1998, section 37.13, is amended
to read:
37.13 [TITLE TO PROPERTY VESTED IN STATE.]
Subdivision 1. [USE OF MONEY.] The state owns all money
and other property of the society in the name of the society and
there may be no division of its assets among society members.
Money received by the society must be used for holding its
annual fair and for other exhibitions or expositions the society
holds, for the improvement of the fairgrounds, for the payment
of expenses, premiums, and purses, for the acquisition of real
and personal property, for the use and benefit of the society,
and for furnishing attractions and amusements the board of
managers considers necessary for the success of its fairs and
other exhibitions and expositions.
Subd. 2. [CAPITAL IMPROVEMENTS.] The society shall spend
the amount of sales tax retained under section 289A.31,
subdivision 7, paragraph (f), exclusively to make capital
improvements to state-owned buildings and facilities on the
state fairgrounds. The society shall match the amount retained
with an equal amount from proceeds from special assessments
levied against commercial exhibits, concessions and rentals, and
from other special user fees specifically designated for capital
improvements.
Sec. 3. Minnesota Statutes 1998, section 289A.31,
subdivision 7, is amended to read:
Subd. 7. [SALES AND USE TAX.] (a) The sales and use tax
required to be collected by the retailer under chapter 297A
constitutes a debt owed by the retailer to Minnesota, and the
sums collected must be held as a special fund in trust for the
state of Minnesota.
A retailer who does not maintain a place of business within
this state as defined by section 297A.21, subdivision 1, shall
not be indebted to Minnesota for amounts of tax that it was
required to collect but did not collect unless the retailer knew
or had been advised by the commissioner of its obligation to
collect the tax.
(b) The use tax required to be paid by a purchaser is a
debt owed by the purchaser to Minnesota.
(c) The tax imposed by sections 297A.01 to 297A.44 chapter
297A, and interest and penalties, is a personal debt of the
individual required to file a return from the time the liability
arises, irrespective of when the time for payment of that
liability occurs. The debt is, in the case of the executor or
administrator of the estate of a decedent and in the case of a
fiduciary, that of the individual in an official or fiduciary
capacity unless the individual has voluntarily distributed the
assets held in that capacity without reserving sufficient assets
to pay the tax, interest, and penalties, in which case the
individual is personally liable for the deficiency.
(d) Liability for payment of sales and use taxes includes
any responsible person or entity described in the personal
liability provisions of section 270.101.
(e) Any amounts collected, even if erroneously or illegally
collected, from a purchaser under a representation that they are
taxes imposed under chapter 297A are state funds from the time
of collection and must be reported on a return filed with the
commissioner. The amounts collected are not subject to refund
unless the seller submits written evidence to the commissioner
that the tax and any interest earned on the tax has been or will
be refunded or credited to the purchaser by the seller.
(f) The tax imposed under chapter 297A on sales of tickets
to the premises of or events sponsored by the state agricultural
society and conducted on the state fairgrounds during the period
of the annual state fair may be retained by the state
agricultural society if the funds are used and matched as
required under section 37.13, subdivision 2.
DEFINITIONS
Sec. 4. [297A.61] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] The following words,
terms, and phrases when used in this chapter have the meanings
given them in this section, unless the context clearly indicates
a different meaning.
Subd. 2. [PERSON.] "Person" includes any individual, and
any group or combination of individuals acting as a unit, and
the plural as well as the singular number. Person includes a
firm, partnership, joint venture, limited liability company,
association, cooperative, social club, fraternal organization,
municipal or private corporation whether or not organized for
profit, estates, trusts, business trusts, receiver, trustee,
syndicate, the United States, and a state and its political
subdivisions. Person includes, but is not limited to, directors
and officers of corporations, governors and managers of a
limited liability company, or members of partnerships who,
either individually or jointly with others, have the control,
supervision, or responsibility of filing returns and making
payment of the amount of tax imposed by this chapter. Person
also includes any agent or consignee of any individual or
organization enumerated in this subdivision.
Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase"
include, but are not limited to, each of the transactions listed
in this subdivision.
(b) Sale and purchase include 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, for a consideration, tangible
personal property, other than a manufactured home used for
residential purposes for a continuous period of 30 days or more.
(c) Sale and purchase include 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.
(d) Sale and purchase include the furnishing, preparing, or
serving for a consideration of food or drinks. Notwithstanding
section 297A.67, subdivision 2, taxable food or drinks include,
but are not limited to, the following:
(1) food or drinks sold by the retailer for immediate
consumption on the retailer's premises. Food and drinks sold
within a building or grounds that require an admission charge
for entrance are presumed to be sold for consumption on the
premises;
(2) food or drinks prepared by the retailer for immediate
consumption either on or off the retailer's premises. For
purposes of this subdivision, "food or drinks prepared for
immediate consumption" means any food product upon which an act
of preparation including, but not limited to, cooking, mixing,
sandwich making, blending, heating, or pouring has been
performed by the retailer so the food product may be immediately
consumed by the purchaser;
(3) ice cream, ice milk, frozen yogurt products, or frozen
novelties sold in single or individual servings including, but
not limited to, cones, sundaes, and snow cones;
(4) soft drinks and other beverages, including all
carbonated and noncarbonated beverages or drinks sold in liquid
form, but not including beverages or drinks which contain milk
or milk products, beverages or drinks containing 15 or more
percent fruit juice, and noncarbonated and noneffervescent
bottled water sold in individual containers of one-half gallon
or more in size;
(5) gum, candy, and candy products;
(6) ice;
(7) all food sold from vending machines;
(8) all food for immediate consumption sold from concession
stands and vehicles;
(9) party trays;
(10) all meals and single servings of packaged snack food
sold in restaurants and bars; and
(11) bakery products that are:
(i) prepared by the retailer for consumption on the
retailer's premises;
(ii) sold at a place that charges admission;
(iii) sold from vending machines; or
(iv) sold in single or individual servings from concession
stands, vehicles, bars, and restaurants.
For purposes of this paragraph, "single or individual
servings" does not include products when sold in bulk containers
or bulk packaging.
For purposes of this paragraph, "premises" means the total
space and facilities, including buildings, grounds, and parking
lots that are made available or that are available for use by
the retailer or customer for the purpose of sale or consumption
of prepared food and drinks. The premises of a caterer is the
place where the catered food or drinks are served.
(e) A sale and a purchase includes the furnishing for a
consideration of electricity, gas, water, or steam for use or
consumption within this state or local exchange telephone
service, intrastate toll service, and interstate toll service,
if that service originates from and is charged to a telephone
located in this state. Telephone service includes (1) paging
services, and (2) private communication service, as defined in
United States Code, title 26, section 4252(d), except for
private communication service purchased by an agent acting on
behalf of the state lottery. Telephone service does not include
services purchased with a prepaid telephone calling card. The
furnishing for a consideration of access to telephone services
by a hotel to its guests is a sale. The furnishing for a
consideration of items listed in this paragraph by a municipal
corporation is a sale.
(f) A sale and a purchase includes the transfer for a
consideration of computer software.
(g) A sale and a purchase includes the furnishing for a
consideration of taxable services as defined in subdivision 16.
(h) A sale and a purchase includes the furnishing for a
consideration of tangible personal property or taxable services
by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies,
instrumentalities, or political subdivisions.
Subd. 4. [RETAIL SALE.] (a) A "retail sale" means a sale
for any purpose other than resale in the regular course of
business.
(b) A sale of property used by the owner only by leasing it
to others or by holding it in an effort to lease it, and put to
no use by the owner other than resale after the lease or effort
to lease, is a sale of property for resale.
(c) A sale of master computer software that is purchased
and used to make copies for sale or lease is a sale of property
for resale.
(d) A sale 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 is a retail sale in whatever quantity sold, whether the
sale is for purposes of resale in the form of real property or
otherwise.
(e) A sale of carpeting, linoleum, or similar floor
covering to a person who provides for installation of the floor
covering is a retail sale and not a sale for resale since a sale
of floor covering which includes installation is a contract for
the improvement of real property.
(f) A sale of shrubbery, plants, sod, trees, and similar
items to a person who provides for installation of the items is
a retail sale and not a sale for resale since a sale of
shrubbery, plants, sod, trees, and similar items that includes
installation is a contract for the improvement of real property.
(g) A sale of tangible personal property that is awarded as
prizes is a retail sale and is not considered a sale of property
for resale.
(h) A sale of tangible personal property utilized or
employed in the furnishing or providing of services under
subdivision 16, paragraph (b), including, but not limited to,
property given as promotional items, is a retail sale and is not
considered a sale of property for resale.
(i) A sale of tangible personal property used in conducting
lawful gambling under chapter 349 or the state lottery under
chapter 349A, including, but not limited to, property given as
promotional items, is a retail sale and is not considered a sale
of property for resale.
(j) A sale of machines, equipment, or devices that are used
to furnish, provide, or dispense goods or services, including,
but not limited to, coin-operated devices, is a retail sale and
is not considered a sale of property for resale.
(k) In the case of a lease, a retail sale occurs when an
obligation to make a lease payment becomes due under the terms
of the agreement or the trade practices of the lessor.
(l) In the case of a conditional sales contract, a retail
sale occurs upon the transfer of title or possession of the
tangible personal property.
Subd. 5. [STORAGE.] "Storage" includes keeping or
retaining tangible personal property in Minnesota for any
purpose except sale in the regular course of business or
subsequent use solely outside Minnesota of tangible personal
property.
Subd. 6. [USE.] (a) "Use" includes the exercise of a right
or power incident to the ownership of any interest in tangible
personal property, or taxable services, purchased from a
retailer, other than the sale of that property in the regular
course of business.
(b) Use includes the consumption of printed materials in
the creation of nontaxable advertising that is distributed,
either directly or indirectly, within Minnesota.
Subd. 7. [SALES PRICE.] (a) "Sales price" means the total
consideration for a retail sale, valued in money, whether paid
in money or by barter or exchange.
(b) Sales price includes:
(1) the cost of the property sold, cost of materials used,
labor or service cost, interest, or discount allowed after the
sale is consummated;
(2) the cost of transportation incurred prior to the time
of sale;
(3) any amount for which credit is given by the seller to
the purchaser;
(4) charges for services that are part of a sale; or
(5) any other expense whatsoever.
(c) Sales price does not include the following:
(1) an amount allowed as credit for tangible personal
property taken in trade for resale;
(2) charges of up to 15 percent in lieu of tips if the
charges are separately stated;
(3) interest, financing, or carrying charges if the charges
are separately stated;
(4) charges for labor or services used in installing or
applying the property sold if the charges are separately stated;
(5) transportation charges if the transportation occurs
after the retail sale of the property if the charges are
separately stated;
(6) cash discounts allowed and taken on sales or the amount
refunded either in cash or in credit for property returned by
purchasers;
(7) the rental motor vehicle tax imposed under section
297A.64; or
(8) the amount of any tax imposed by the United States on
communications services under United States Code, title 26,
section 4251(a).
(d) Notwithstanding paragraph (c), "sales price," for
purposes of sales of ready-mixed concrete sold from a
ready-mixed concrete truck, includes any transportation,
delivery, or other service charges, and no deduction is allowed
for those charges, whether or not the charges are separately
stated.
Subd. 8. [GROSS RECEIPTS.] "Gross receipts" means the
total amount received, in money or by barter or exchange, for
all sales at retail as measured by the sales price.
Subd. 9. [RETAILER.] "Retailer" means every person engaged
in making retail sales.
Subd. 10. [TANGIBLE PERSONAL PROPERTY.] (a) "Tangible
personal property" means corporeal personal property of any
kind, including property that is to become real property as a
result of incorporation, attachment, or installation following
its acquisition.
(b) Tangible personal property includes, but is not limited
to:
(1) computer software, whether contained on tape, discs,
cards, or other devices; and
(2) prepaid telephone calling cards.
(c) Personal property does not include:
(1) large ponderous machinery and equipment used in a
business or production activity which at common law would be
considered to be real property;
(2) property which is subject to an ad valorem property
tax;
(3) property described in section 272.02, subdivision 9,
clauses (a) to (d); and
(4) property described in section 272.03, subdivision 2,
clauses (3) and (5).
Subd. 11. [COMMISSIONER.] "Commissioner" means the
commissioner of revenue of the state of Minnesota.
Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new
or used machinery, equipment, implements, accessories, and
contrivances used directly and principally in the production for
sale, but not including the processing, of livestock, dairy
animals, dairy products, poultry and poultry products, fruits,
vegetables, forage, grains, and bees and apiary products.
(b) Farm machinery includes:
(1) machinery for the preparation, seeding, or cultivation
of soil for growing agricultural crops and sod, for the
harvesting and threshing of agricultural products, or for the
harvesting or mowing of sod;
(2) barn cleaners, milking systems, grain dryers, automatic
feeding systems, and similar installations, whether or not the
equipment is installed by the seller and becomes part of the
real property;
(3) irrigation equipment sold for exclusively agricultural
use, including pumps, pipe fittings, valves, sprinklers, and
other equipment necessary to the operation of an irrigation
system when sold as part of an irrigation system, whether or not
the equipment is installed by the seller and becomes part of the
real property;
(4) logging equipment, including chain saws used for
commercial logging;
(5) fencing used for the containment of farmed cervidae, as
defined in section 17.451, subdivision 2;
(6) primary and backup generator units used to generate
electricity for the purpose of operating farm machinery, as
defined in this subdivision, or providing light or space heating
necessary for the production of livestock, dairy animals, dairy
products, or poultry and poultry products; and
(7) aquaculture production equipment as defined in
subdivision 13.
(c) Farm machinery does not include:
(1) repair or replacement parts;
(2) tools, shop equipment, grain bins, feed bunks, fencing
material except fencing material covered by paragraph (b),
clause (5), communication equipment and other farm supplies;
(3) motor vehicles taxed under chapter 297B;
(4) snowmobiles or snow blowers; or
(5) lawn mowers except those used in the production of sod
for sale, or garden-type tractors or garden tillers.
Subd. 13. [AQUACULTURE PRODUCTION EQUIPMENT.] (a)
"Aquaculture production equipment" means new or used machinery,
equipment, implements, accessories, and contrivances used
directly and principally in aquaculture production.
(b) Aquaculture production equipment includes augers and
blowers, automatic feed systems, manual feeding equipment,
shockers, gill nets, trap nets, seines, box traps, round nets
and traps, net pens, dip nets, net washers, floating net
supports, floating access walkways, net supports and walkways,
growing tanks, holding tanks, troughs, raceways, transport
tanks, egg taking equipment, egg hatcheries, egg incubators, egg
baskets and troughs, egg graders, egg counting equipment, fish
counting equipment, fish graders, fish pumps and loaders, fish
elevators, air blowers, air compressors, oxygen generators,
oxygen regulators, diffusers and injectors, air supply
equipment, oxygenation columns, water coolers and heaters, heat
exchangers, water filter systems, water purification systems,
waste collection equipment, feed mills, portable scales, feed
grinders, feed mixers, feed carts and trucks, power feed wagons,
fertilizer spreaders, fertilizer tanks, forage collection
equipment, land levelers, loaders, post hole diggers, disc,
harrow, plow, and water diversion devices.
(c) Aquaculture production equipment does not include
repair or replacement parts for aquaculture production equipment.
Subd. 14. [LEASING; LEASE.] "Leasing" includes all
transfers of possession or the use of tangible personal property
by the lessee for a consideration, if title remains with the
lessor at the end of the lease. For purposes of this chapter, a
lease of tangible personal property is a series of sales
transactions that impose upon the lessee multiple payment
obligations. "Leasing" does not include a transaction defined
under subdivision 15.
Subd. 15. [CONDITIONAL SALES CONTRACT.] A "conditional
sales contract" means a contract, whether or not the contract is
designated as a lease, that provides that the purchaser or
lessee is to obtain title to the property at the end of the term
of the contract or has the option to purchase the property at
the end of the term of the contract for a nominal amount. For
purposes of this paragraph, "nominal amount" means an amount so
small, slight, or negligible that it is not economically
significant and bears no relation to the real value of the item
being purchased.
Subd. 16. [TAXABLE SERVICES.] (a) "Taxable services" means
the services listed in this subdivision and other services
listed in subdivision 3.
(b) Taxable services includes the granting of the privilege
of admission to places of amusement, recreational areas, or
athletic events, and the making available of amusement devices,
tanning facilities, reducing salons, steam baths, turkish baths,
health clubs, and spas or athletic facilities.
(c) Taxable services includes the furnishing of lodging and
related services by a hotel, rooming house, resort, campground,
motel, or trailer camp and 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.
(d) Taxable services includes the furnishing of cable
television services or similar television services, including,
but not limited to, charges for basic, premium, pay-per-view,
and any other similar service.
(e) Taxable services includes the furnishing of parking
services, whether on a contractual, hourly, or other periodic
basis, except for parking at a meter.
(f) Taxable services includes the granting of membership in
a club, association, or other organization if:
(1) the club, association, or other organization makes
available for the use of its members sports and athletic
facilities, without regard to whether a separate charge is
assessed for use of the facilities; and
(2) use of the sports and athletic facility is not made
available to the general public on the same basis as it is made
available to members.
Granting of membership means both one-time initiation fees and
periodic membership dues. Sports and athletic facilities
include golf courses; tennis, racquetball, handball, and squash
courts; basketball and volleyball facilities; running tracks;
exercise equipment; swimming pools; and other similar athletic
or sports facilities.
(g) Taxable services includes the furnishing of the
following services as provided in this paragraph:
(1) laundry and dry cleaning services including cleaning,
pressing, repairing, altering, and storing clothes, linen
services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry
cleaning services do not include services provided by coin
operated facilities operated by the customer;
(2) motor vehicle washing, waxing, and cleaning services,
including services provided by coin operated facilities operated
by the customer, and rustproofing, undercoating, and towing of
motor vehicles;
(3) building and residential cleaning, maintenance, and
disinfecting and exterminating services;
(4) detective, security, burglar, fire alarm, and armored
car services; but not including services performed within the
jurisdiction they serve by off-duty licensed peace officers as
defined in section 626.84, subdivision 1, or services provided
by a nonprofit organization for monitoring and electronic
surveillance of persons placed on in-home detention pursuant to
court order or under the direction of the Minnesota department
of corrections;
(5) pet grooming services;
(6) lawn care, fertilizing, mowing, spraying and sprigging
services; garden planting and maintenance; tree, bush, and shrub
pruning, bracing, spraying, and surgery; indoor plant care;
tree, bush, shrub, and stump removal; and tree trimming for
public utility lines. Services performed under a construction
contract for the installation of shrubbery, plants, sod, trees,
bushes, and similar items are not taxable;
(7) massages, except when provided by a licensed health
care facility or professional or upon written referral from a
licensed health care facility or professional for treatment of
illness, injury, or disease; and
(8) the furnishing of lodging, board, and care services for
animals in kennels and other similar arrangements, but excluding
veterinary and horse boarding services.
The services listed in this paragraph are taxable under
section 297A.62 if the service is performed wholly within
Minnesota or if the service is performed partly within and
partly outside Minnesota and the greater proportion of the
service is performed in Minnesota, based on the cost of
performance. In applying the provisions of this chapter, the
terms "tangible personal property" and "sales at retail" include
taxable services and the provision of taxable services, unless
specifically provided otherwise. Services performed by an
employee for an employer are not taxable. Services performed by
a partnership or association for another partnership or
association are not taxable if one of the entities owns or
controls more than 80 percent of the voting power of the equity
interest in the other entity. Services performed between
members of an affiliated group of corporations are not taxable.
For purposes of this section, "affiliated group of corporations"
includes those entities that would be classified as members of
an affiliated group under United States Code, title 26, section
1504, and that are eligible to file a consolidated tax return
for federal income tax purposes.
Subd. 17. [COMPUTER SOFTWARE.] "Computer software" means a
computer program, either in the form of written procedures or in
the form of storage media on which, or in which, the program is
recorded, or any required documentation or manuals designed to
facilitate the use of the computer program. For purposes of
this subdivision:
(1) "Storage media" includes punched cards, tapes, discs,
diskettes, or drums on which computer programs may be embodied
or stored;
(2) "Computer" does not include tape-controlled automatic
drilling, milling, or other manufacturing machinery or
equipment; and
(3) "Computer program" means information and directions
that dictate the function performed by data processing
equipment. It includes the complete plan for the solution of a
problem, such as the complete sequence of automatic data
processing equipment instructions necessary to solve a problem
and includes both systems and application programs and
subdivisions, such as assemblers, compilers, routines,
generators, and utility programs. Computer program includes a
"canned" or prewritten computer program that is held or existing
for general or repeated sale or lease, even if the prewritten or
"canned" program was initially developed on a custom basis or
for in-house use.
Subd. 18. [HANDICAPPED.] "Handicapped" means an individual
who has a permanent and total disability as defined in section
273.13, subdivision 22.
Subd. 19. [COMMON CARRIER.] "Common carrier" means a
person engaged in transportation for hire of tangible personal
property by motor vehicle, if the person:
(1) has a certificate or permit or has completed a
registration process that authorizes for-hire transportation of
property from the United States Department of Transportation,
the transportation regulation board, or the department of
transportation;
(2) is transporting commodities defined as "exempt" in
for-hire transportation; or
(3) transports tangible personal property pursuant to a
contract with a person described in clause (1) or (2).
Subd. 20. [PREPAID TELEPHONE CALLING CARD.] "Prepaid
telephone calling card" means any card or other similar
arrangement, including a prepaid authorization number, that
permits its holder to obtain telephone services and pay for such
services in advance.
Subd. 21. [NORMAL COURSE OF BUSINESS.] "Normal course of
business" means activities that demonstrate a commercial
continuity or consistency of making sales or performing services
for the purposes of attaining profit or producing income.
Factors that indicate that a person is acting in the normal
course of business include:
(1) systematic solicitation of sales through advertising
media;
(2) entering into contracts to perform services or provide
tangible personal property;
(3) maintaining a place of business; or
(4) use of exemption certificates to purchase items exempt
from the sales tax.
Subd. 22. [INTERNAL REVENUE CODE.] Unless specifically
provided otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 1999.
Subd. 23. [UNITED STATES CODE.] Unless specifically
provided otherwise, "United States Code" means the United States
Code as amended through December 31, 1999.
TAXES; RATES
Sec. 5. [297A.62] [SALES TAX IMPOSED; RATES.]
Subdivision 1. [GENERALLY.] Except as otherwise provided
in subdivision 2 or 3 or in this chapter, a sales tax of 6.5
percent is imposed on the gross receipts from retail sales as
defined in section 297A.61, subdivision 4, made in this state or
to a destination in this state by a person who is required to
have or voluntarily obtains a permit under section 297A.83,
subdivision 1.
Subd. 2. [LIQUOR AND BEER SALES.] The rate of the sales
tax imposed is nine percent on the gross receipts from retail
sales of:
(1) intoxicating liquor, as defined in section 340A.101,
subdivision 14; and
(2) 3.2 percent malt liquor, as defined in section
340A.101, subdivision 19, when sold at an on-sale or off-sale
municipal liquor store or other establishment licensed to sell
any type of intoxicating liquor.
Subd. 3. [MANUFACTURED HOUSING AND PARK TRAILERS.] For
retail sales of manufactured homes as defined in section 327.31,
subdivision 6, for residential uses, the sales tax under
subdivision 1 is imposed on 65 percent of the dealer's cost of
the manufactured home. For retail sales of new or used park
trailers, as defined in section 168.011, subdivision 8,
paragraph (b), the sales tax under subdivision 1 is imposed on
65 percent of the sales price of the park trailer.
Sec. 6. [297A.63] [USE TAXES IMPOSED; RATES.]
Subdivision 1. [USE OF TANGIBLE PERSONAL PROPERTY OR
TAXABLE SERVICES.] (a) For the privilege of using, storing,
distributing, or consuming in Minnesota tangible personal
property or taxable services purchased for use, storage,
distribution, or consumption in this state, a use tax is imposed
on a person in Minnesota. The tax is imposed on the sales price
of retail sales of the tangible personal property or taxable
services at the rate of tax imposed under section 297A.62.
(b) No tax is imposed under paragraph (a) if the tax
imposed by section 297A.62 was paid on the sales price of the
tangible personal property or taxable services.
(c) No tax is imposed under paragraph (a) if the purchase
meets the requirements for exemption under section 297A.67,
subdivision 21.
Subd. 2. [USE OF TANGIBLE PERSONAL PROPERTY MADE FROM
MATERIALS.] (a) A use tax is imposed on a person who
manufactures, fabricates, or assembles tangible personal
property from materials, either within or outside this state and
who uses, stores, distributes, or consumes the tangible personal
property in Minnesota. The tax is imposed on the sales price of
retail sales of the materials contained in the tangible personal
property at the rate of tax imposed under section 297A.62.
(b) No tax is imposed under paragraph (a) if the tax
imposed by section 297A.62 was paid on the sales price of
materials contained in the tangible personal property.
Sec. 7. [297A.64] [RENTAL MOTOR VEHICLE TAX IMPOSED;
RATE.]
Subdivision 1. [TAX IMPOSED.] A tax is imposed on the
lease or rental in this state for not more than 28 days of a
passenger automobile as defined in section 168.011, subdivision
7, a van as defined in section 168.011, subdivision 28, or a
pickup truck as defined in section 168.011, subdivision 29. The
rate of tax is 6.2 percent of the sales price. The tax applies
whether or not the vehicle is licensed in the state.
Subd. 2. [FEE IMPOSED.] A fee equal to three percent of
the sales price is imposed on leases or rentals of vehicles
subject to the tax under subdivision 1. The lessor on the
invoice to the customer may designate the fee as "a fee imposed
by the State of Minnesota for the registration of rental cars."
Subd. 3. [ADMINISTRATION.] The retailer shall report and
pay the tax imposed in subdivision 1 to the commissioner of
revenue with the taxes imposed in this chapter. The tax imposed
in subdivision 1 and the fee imposed in subdivision 2 are
subject to the same interest, penalty, and other provisions
provided for sales and use taxes under chapter 289A and this
chapter. The commissioner has the same powers to assess and
collect the tax and fee that are given the commissioner in
chapters 270 and 289A and this chapter to assess and collect
sales and use tax.
Subd. 4. [EXEMPTIONS.] (a) The tax and the fee imposed by
this section do not apply to a lease or rental of (1) a vehicle
to be used by the lessee to provide a licensed taxi service; (2)
a hearse or limousine used in connection with a burial or
funeral service; or (3) a van designed or adapted primarily for
transporting property rather than passengers.
(b) The lessor may elect not to charge the fee imposed in
subdivision 2 if in the previous calendar year the lessor had no
more than 20 vehicles available for lease that would have been
subject to tax under this section, or no more than $50,000 in
gross receipts that would have been subject to tax under this
section.
Subd. 5. [PAYMENT OF EXCESS FEES.] On the first sales tax
return due following the end of a calendar year during which a
lessor has imposed a fee under subdivision 2, the lessor shall
report to the commissioner of revenue, in the form required by
the commissioner, the amount of the fee collected during the
previous year and the amount of motor vehicle registration taxes
paid during the previous year by the lessor under chapter 168 on
vehicles subject to the fee under this section. If the amount
of the fees collected exceeds the amount of motor vehicle
registration taxes paid, the lessor shall remit the excess to
the commissioner of revenue at the time the report is submitted.
Sec. 8. [297A.65] [LOTTERY TICKETS; IN-LIEU TAX.]
Sales of state lottery tickets are exempt from the tax
imposed under section 297A.62. The state lottery must on or
before the 20th day of each month transmit to the commissioner
of revenue an amount equal to the gross receipts from the sale
of lottery tickets for the previous month multiplied by the tax
rate under section 297A.62, subdivision 1. The resulting
payment is in lieu of the sales tax that otherwise would be
imposed by this chapter. The commissioner shall deposit the
money transmitted as provided by section 297A.94 and the money
must be treated as other proceeds of the sales tax. For
purposes of this section, "gross receipts" means the proceeds of
the sale of tickets before deduction of a commission or other
compensation paid to the vendor or retailer for selling tickets.
REQUIREMENT TO COLLECT AND REMIT
Sec. 9. [297A.66] [JURISDICTION TO REQUIRE COLLECTION AND
REMITTANCE OF TAX BY RETAILER.]
Subdivision 1. [DEFINITIONS.] (a) "Retailer maintaining a
place of business in this state," or a similar term, means a
retailer:
(1) having or maintaining within this state, directly or by
a subsidiary, an office, place of distribution, sales or sample
room or place, warehouse, or other place of business; or
(2) having a representative, agent, salesperson, canvasser,
or solicitor operating in this state under the authority of the
retailer or its subsidiary, for any purpose, including the
repairing, selling, delivering, installing, or soliciting of
orders for the retailer's goods or services, or the leasing of
tangible personal property located in this state, whether the
place of business or agent, representative, salesperson,
canvasser, or solicitor is located in the state permanently or
temporarily, or whether or not the retailer or subsidiary is
authorized to do business in this state.
(b) "Destination of a sale" means the location to which the
retailer makes delivery of the property sold, or causes the
property to be delivered, to the purchaser of the property, or
to the agent or designee of the purchaser. The delivery may be
made by any means, including the United States Postal Service, a
common carrier, or a contract carrier.
Subd. 2. [RETAILER MAINTAINING A PLACE OF BUSINESS IN THIS
STATE.] (a) A retailer maintaining a place of business in this
state who makes retail sales in Minnesota or to a destination in
Minnesota shall collect sales and use taxes and remit them to
the commissioner under section 297A.77.
Subd. 3. [RETAILER NOT MAINTAINING A PLACE OF BUSINESS IN
THIS STATE.] (a) To the extent allowed by the United States
Constitution and the laws of the United States, a retailer
making retail sales from outside this state to a destination
within this state and not maintaining a place of business in
this state shall collect sales and use taxes and remit them to
the commissioner under section 297A.77, if the retailer engages
in the regular or systematic soliciting of sales from potential
customers in this state by:
(1) distribution, by mail or otherwise, of catalogs,
periodicals, advertising flyers, or other written solicitations
of business to customers in this state;
(2) display of advertisements on billboards or other
outdoor advertising in this state;
(3) advertisements in newspapers published in this state;
(4) advertisements in trade journals or other periodicals
the circulation of which is primarily within this state;
(5) advertisements in a Minnesota edition of a national or
regional publication or a limited regional edition in which this
state is included as part of a broader regional or national
publication which are not placed in other geographically defined
editions of the same issue of the same publication;
(6) advertisements in regional or national publications in
an edition which is not by its contents geographically targeted
to Minnesota but which is sold over the counter in Minnesota or
by subscription to Minnesota residents;
(7) advertisements broadcast on a radio or television
station located in Minnesota; or
(8) any other solicitation by telegraphy, telephone,
computer database, cable, optic, microwave, or other
communication system.
This paragraph (a) must be construed without regard to the
state from which distribution of the materials originated or in
which they were prepared.
(b) The location of vendors independent of the retailer
that provide products or services to the retailer in connection
with its solicitation of customers within this state, including
such products and services as creation of copy, printing,
distribution, and recording, is not considered in determining
whether the retailer is required to collect tax.
(c) A retailer not maintaining a place of business in this
state is presumed, subject to rebuttal, to be engaged in regular
solicitation within this state if it engages in any of the
activities in paragraph (a) and:
(1) makes 100 or more retail sales from outside this state
to destinations in this state during a period of 12 consecutive
months; or
(2) makes ten or more retail sales totaling more than
$100,000 from outside this state to destinations in this state
during a period of 12 consecutive months.
Sec. 10. [297A.665] [PRESUMPTION OF TAX; BURDEN OF PROOF.]
(a) For the purpose of the proper administration of this
chapter and to prevent evasion of the tax, until the contrary is
established, it is presumed that:
(1) all gross receipts are subject to the tax; and
(2) all retail sales for delivery in Minnesota are for
storage, use, or other consumption in Minnesota.
(b) The burden of proving that a sale is not a retail sale
is on the seller. However, the seller may take from the
purchaser at the time of the sale an exemption certificate
claiming that the property purchased is for resale or that the
sale is otherwise exempt from the tax imposed by this chapter.
A seller claiming that certain sales are exempt, who does not
possess the required exemption certificates, must acquire the
certificates within 60 days after receiving written notice from
the commissioner that the certificates are required. If the
certificates are not obtained within the 60-day period, the
sales are considered taxable sales under this chapter.
(c) A purchaser of tangible personal property or any items
listed in section 297A.63 that are shipped or brought to
Minnesota by the purchaser has the burden of proving that the
property was not purchased from a retailer for storage, use, or
consumption in Minnesota.
EXEMPTIONS
Sec. 11. [297A.67] [GENERAL EXEMPTIONS.]
Subdivision 1. [SCOPE.] The gross receipts from the sale
and purchase of, and storage, distribution, use, or consumption
of the items contained in this section are specifically exempted
from the taxes imposed by this chapter.
Subd. 2. [FOOD PRODUCTS.] 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, and cocoa
and cocoa products are exempt.
Subd. 3. [FOOD STAMPS.] Tangible personal property
purchased with food stamps, coupons, or vouchers issued by the
federal government under the Food Stamp Program is exempt. This
exemption also applies to food purchased under the Special
Supplemental Food Program for Women, Infants, and Children. The
exemption provided by this subdivision is effective and applies
only to the extent required by federal law.
Subd. 4. [EXEMPT MEALS AT RESIDENTIAL FACILITIES.] Meals
or drinks served to patients, inmates, or persons residing at
hospitals, sanitariums, nursing homes, senior citizen homes, and
correctional, detention, and detoxification facilities are
exempt.
Subd. 5. [EXEMPT MEALS AT SCHOOLS.] Meals and lunches
served at public and private schools, universities, or colleges
are exempt.
Subd. 6. [OTHER EXEMPT MEALS.] Meals or drinks purchased
for and served exclusively to individuals who are 60 years of
age or over and their spouses or to handicapped persons and
their spouses by governmental agencies, nonprofit organizations,
or churches, or pursuant to any program funded in whole or in
part through United States Code, title 42, sections 3001 through
3045, wherever delivered, prepared, or served, are exempt.
Subd. 7. [MEDICINES; MEDICAL DEVICES.] (a) Prescribed
drugs and medicine, and insulin, intended for internal or
external use, in the cure, mitigation, treatment, or prevention
of illness or disease in human beings are exempt. "Prescribed
drugs and medicine" includes over-the-counter drugs or medicine
prescribed by a licensed physician.
(b) Nonprescription medicines consisting principally
(determined by the weight of all ingredients) of analgesics that
are approved by the United States Food and Drug Administration
for internal use by human beings are exempt. For purposes of
this subdivision, "principally" means greater than 50 percent
analgesics by weight.
(c) Prescription glasses, hospital beds, fever
thermometers, reusable finger-pricking devices for the
extraction of blood, blood glucose monitoring machines, and
other diagnostic agents used in diagnosing, monitoring, or
treating diabetes, and therapeutic and prosthetic devices are
exempt. "Therapeutic devices" means devices that are attached
or applied to the human body to cure, heal, or alleviate injury,
illness, or disease, either directly or by administering a
curative agent. "Prosthetic devices" means devices that replace
injured, diseased, or missing parts of the human body, either
temporarily or permanently.
Subd. 8. [CLOTHING.] Clothing and wearing apparel,
including sewing materials to be directly incorporated into
wearing apparel, are exempt. For purposes of this subdivision,
clothing and wearing apparel do not include the following:
(1) articles designed primarily for use while engaging in a
specific sport or recreational activity that are not also worn
for general use;
(2) articles designed primarily to provide safety or
protection against injury while the user is engaged in
industrial or general job activities;
(3) all articles commonly or commercially known as jewelry
including, but not limited to, watches;
(4) nonprescription optical glasses of any sort;
(5) articles made entirely of fur on the hide or pelt, or
partially of such fur if the value of the fur is more than three
times the value of the next most valuable component material;
(6) perfume, lotions, creams, dyes, or other substances
that are applied to the skin or the hair; and
(7) luggage, bags, purses, wallets, or cases of any sort.
Subd. 9. [BABY PRODUCTS.] (a) Products, such as lotion,
creams, ointments, oil, powder, or shampoo, and other articles
designed for application to the hair or skin of babies are
exempt.
(b) Baby bottles and nipples, pacifiers, teething rings,
thumb sucking preventatives, and infant syringes are exempt.
Subd. 10. [CASKETS; VAULTS.] Caskets and burial vaults for
human burial are exempt.
Subd. 11. [AUTOMOBILES; DISABLED VETERANS.] Automobiles or
other conveyances are exempt if the purchaser is assisted by a
grant from the United States in accordance with United States
Code, title 38, section 3902.
Subd. 12. [PARTS AND ACCESSORIES USED TO MAKE A MOTOR
VEHICLE HANDICAPPED ACCESSIBLE.] Parts, accessories, and labor
charges that are used solely to modify a motor vehicle to make
it handicapped accessible are exempt.
Subd. 13. [TEXTBOOKS.] Textbooks that are prescribed for
use in conjunction with a course of study in a school, college,
university, and private career school to students who are
regularly enrolled at such institutions are exempt. For
purposes of this subdivision (1) a "school" is as defined in
section 120A.22, subdivision 4; and (2) "private career school"
means a school licensed under section 141.25.
Subd. 14. [PERSONAL COMPUTERS PRESCRIBED FOR USE BY
SCHOOL.] Personal computers and related computer software sold
by a school, college, university, or private career school to
students who are enrolled at the institutions are exempt if:
(1) the use of the personal computer, or of a substantially
similar model of computer, and the related computer software is
prescribed by the institution in conjunction with a course of
study; and
(2) each student of the institution, or of a unit of the
institution in which the student is enrolled, is required by the
institution to have such a personal computer and related
software as a condition of enrollment.
For the purposes of this subdivision, "school" and "private
career school" have the meanings given in subdivision 13.
Subd. 15. [RESIDENTIAL HEATING FUELS.] Residential heating
fuels are exempt as follows:
(1) all fuel oil, coal, wood, steam, hot water, propane
gas, and L.P. gas sold to residential customers for residential
use;
(2) for the billing months of November, December, January,
February, March, and April, 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; and
(3) for the billing months of November, December, January,
February, March, and April, 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.
Subd. 16. [RESIDENTIAL WATER SERVICES.] Water services for
residential use are exempt regardless of how the services are
billed.
Subd. 17. [FEMININE HYGIENE PRODUCTS.] Sanitary napkins,
tampons, or similar items used for feminine hygiene are exempt.
Subd. 18. [USED MOTOR OILS.] Used motor oils are exempt.
Subd. 19. [CROSS-COUNTRY SKI PASSES.] Cross-country ski
passes issued under sections 85.40 to 85.43 are exempt.
Subd. 20. [MANUFACTURED HOMES.] Manufactured homes, as
defined in section 327.31, subdivision 6, to be used by the
purchaser for residential purposes are exempt, unless the sale
is the first retail sale of the manufactured home in this state.
Subd. 21. [DE MINIMIS EXEMPTION.] A purchase subject to
use tax under section 297A.63 is exempt if (1) the purchase is
made by an individual for personal use, and (2) the total
purchases that are subject to the use tax do not exceed $770 in
the calendar year. For purposes of this subdivision, "personal
use" includes purchases for gifts. If an individual makes
purchases subject to use tax of more than $770 in the calendar
year, the individual must pay the use tax on the entire amount.
This exemption does not apply to purchases made from retailers
who are required or registered to collect taxes under this
chapter.
Subd. 22. [PROPERTY BROUGHT INTO MINNESOTA BY
NONRESIDENT.] All articles of tangible personal property brought
into Minnesota by a person who was a nonresident of this state
immediately prior to bringing such property into this state for
the person's use, storage, or consumption are exempt from the
use tax imposed by section 297A.63.
Subd. 23. [OCCASIONAL SALES.] Isolated and occasional
sales in Minnesota not made in the normal course of business,
and the storage, use, or consumption of property or services
resulting from such sales, are exempt.
Subd. 24. [CONSTITUTIONAL PROHIBITIONS.] 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, that the state of Minnesota is prohibited from taxing
under the Constitution or laws of the United States or under the
Constitution of Minnesota, are exempt.
Sec. 12. [297A.68] [BUSINESS EXEMPTIONS.]
Subdivision 1. [SCOPE.] The gross receipts from the sale
of, and storage, distribution, use, or consumption of the items
contained in this section are specifically exempted from the
taxes imposed by this chapter.
Subd. 2. [MATERIALS CONSUMED IN PRODUCTION.] (a) Materials
stored, used, or consumed in industrial production of personal
property intended to be sold ultimately at retail are exempt,
whether or not the item so used becomes an ingredient or
constituent part of the property produced. Materials that
qualify for this exemption include, but are not limited to, the
following:
(1) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(2) materials, including chemicals, fuels, and electricity
purchased by persons engaged in industrial production to treat
waste generated as a result of the production process;
(3) fuels, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating or lighting is exempt only if it is
necessary to produce that particular industrial product;
(4) petroleum products and lubricants;
(5) packaging materials, including returnable containers
used in packaging food and beverage products;
(6) accessory tools, equipment, and other items that are
separate detachable units with an ordinary useful life of less
than 12 months used in producing a direct effect upon the
product; and
(7) the following materials, tools, and equipment used in
metalcasting: crucibles, thermocouple protection sheaths and
tubes, stalk tubes, refractory materials, molten metal filters
and filter boxes, and degassing lances.
(b) This exemption does not include:
(1) machinery, equipment, implements, tools, accessories,
appliances, contrivances and furniture and fixtures, except
those listed in paragraph (a), clause (6); and
(2) petroleum and special fuels used in producing or
generating power for propelling ready-mixed concrete trucks on
the public highways of this state.
(c) Industrial production includes, 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. Industrial production does not include
painting, cleaning, repairing or similar processing of property
except as part of the original manufacturing process.
Subd. 3. [MATERIALS USED IN PROVIDING CERTAIN TAXABLE
SERVICES.] (a) Materials stored, used, or consumed in providing
a taxable service listed in section 297A.61, subdivision 16,
paragraph (g), intended to be sold ultimately at retail are
exempt.
(b) This exemption includes, but is not limited to:
(1) chemicals, lubricants, packaging materials, seeds,
trees, fertilizers, and herbicides, if these items are used or
consumed in providing the taxable service;
(2) chemicals used to treat waste generated as a result of
providing the taxable service;
(3) accessory tools, equipment, and other items that are
separate detachable units used in providing the service and that
have an ordinary useful life of less than 12 months; and
(4) fuel, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating or lighting is exempt only if it is
necessary to produce that particular taxable service.
(c) This exemption does not include machinery, equipment,
implements, tools, accessories, appliances, contrivances,
furniture, and fixtures used in providing the taxable service.
Subd. 4. [TACONITE PRODUCTION MATERIALS.] Mill liners,
grinding rods, and grinding balls that are substantially
consumed in the production of taconite are exempt when sold to
or stored, used, or consumed by persons taxed under the in-lieu
provisions of chapter 298.
Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is
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.
"Capital equipment" means machinery and equipment purchased
or leased and used in this state by the purchaser or lessee
primarily for manufacturing, fabricating, mining, or refining
tangible personal property to be sold ultimately at retail.
Capital equipment means machinery and equipment essential
to the integrated production process. Capital equipment also
includes machinery and equipment used to electronically transmit
results retrieved by a customer of an online computerized data
retrieval system.
(b) Capital equipment includes, but is not limited to:
(1) machinery and equipment used to operate, control, or
regulate the production equipment;
(2) machinery and equipment used for research and
development, design, quality control, and testing activities;
(3) environmental control devices that are used to maintain
conditions such as temperature, humidity, light, or air pressure
when those conditions are essential to and are part of the
production process;
(4) materials and supplies used to construct and install
machinery or equipment;
(5) repair and replacement parts, including accessories,
whether purchased as spare parts, repair parts, or as upgrades
or modifications to machinery or equipment;
(6) materials used for foundations that support machinery
or equipment;
(7) materials used to construct and install special purpose
buildings used in the production process; and
(8) ready-mixed concrete trucks in which the ready-mixed
concrete is mixed as part of the delivery process.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 297B;
(2) machinery or equipment used to receive or store raw
materials;
(3) building materials, except for materials included in
paragraph (b), clauses (6) and (7);
(4) machinery or equipment used for nonproduction purposes,
including, but not limited to, the following: plant security,
fire prevention, first aid, and hospital stations; support
operations or administration; pollution control; and plant
cleaning, disposal of scrap and waste, plant communications,
space heating, lighting, or safety;
(5) farm machinery and aquaculture production equipment as
defined by section 297A.61, subdivisions 12 and 13;
(6) machinery or equipment purchased and installed by a
contractor as part of an improvement to real property; or
(7) any other item that is not essential to the integrated
process of manufacturing, fabricating, mining, or refining.
(d) For purposes of this subdivision:
(1) "Machinery" means mechanical, electronic, or electrical
devices, including computers and computer software, that are
purchased or constructed to be used for the activities set forth
in paragraph (a).
(2) "Equipment" means independent devices or tools separate
from machinery, including computers and computer software, used
in operating, controlling, or regulating machinery and
equipment; and any subunit or assembly comprising a component of
any machinery or accessory or attachment parts of machinery,
such as tools, dies, jigs, patterns, and molds.
(3) "Primarily" means machinery and equipment used 50
percent or more of the time in an activity described in
paragraph (a).
(4) "Manufacturing" means an operation or series of
operations where raw materials are changed in form, composition,
or condition by machinery and equipment and which results in the
production of a new article of tangible personal property. For
purposes of this subdivision, "manufacturing" includes the
generation of electricity or steam to be sold at retail.
(5) "Fabricating" means to make, build, create, produce, or
assemble components or property to work in a new or different
manner.
(6) "Mining" means the extraction of minerals, ores, stone,
or peat.
(7) "Refining" means the process of converting a natural
resource to a product, including the treatment of water to be
sold at retail.
(8) "Integrated production process" means a process
beginning with the removal of raw materials from inventory
through the completion of the product, including packaging of
the product.
(9) "Online data retrieval system" means a system whose
cumulation of information is equally available and accessible to
all its customers.
(10) "Machinery and equipment used for pollution control"
means machinery and equipment used solely to eliminate, prevent,
or reduce pollution resulting from an activity described in
paragraph (a).
Subd. 6. [SPECIAL TOOLING.] Special tooling is exempt.
"Special tooling" means tools, dies, jigs, patterns, gauges, and
other special tools that have value and use only for the buyer
and for the use for which they are made. An item has value and
use only to the buyer if the item is not standard enough to be
stocked or ordered from a catalog or other sales literature, but
must be produced in accordance with special requirements
peculiar to the buyer and not common to someone else whose
conditions for possible use of the material are reasonably
similar to the buyer's.
Subd. 7. [AIR COOLING EQUIPMENT.] Equipment used for air
cooling is exempt, if the equipment is purchased for conversion
or replacement of an existing groundwater-based once-through
cooling system as required under section 103G.271, subdivision 5.
Subd. 8. [POLLUTION CONTROL EQUIPMENT.] Pollution control
equipment purchased by a steel reprocessing firm is exempt if
the equipment is necessary to meet state or federal emission
standards. For purposes of this subdivision:
(1) "pollution control equipment" means equipment used for
the purpose of eliminating, preventing, or reducing air, land,
or water pollution during or as a result of the manufacturing
process; and
(2) "steel reprocessing firm" means a firm whose primary
business is the recovery of steel from automobiles, appliances,
and other steel products and the rerefining of this recovered
metal into new steel products.
Subd. 9. [SUPER BOWL ADMISSIONS.] The granting of the
privilege of admission to a world championship football game
sponsored by the national football league is exempt.
Subd. 10. [PUBLICATIONS; PUBLICATION MATERIALS.] Tangible
personal property that is used or consumed in producing any
publication regularly issued at average intervals not exceeding
three months is exempt, and any such publication is exempt.
"Publication" includes, but is not limited to, a qualified
newspaper as defined by section 331A.02, together with any
supplements or enclosures. "Publication" does not include
magazines and periodicals sold over the counter. Tangible
personal property that is used or consumed in producing a
publication does not include machinery, equipment, implements,
tools, accessories, appliances, contrivances, furniture, and
fixtures used in the publication, or fuel, electricity, gas, or
steam used for space heating or lighting.
Advertising contained in a publication is a nontaxable
service and is exempt. Persons who publish or sell newspapers
are engaging in a nontaxable service with respect to gross
receipts realized from such news-gathering or news-publishing
activities, including the sale of advertising.
Subd. 11. [ADVERTISING MATERIALS.] Material designed to
advertise and promote the sale of merchandise or services is
exempt if the material is purchased and stored for the purpose
of subsequently shipping or otherwise transferring outside the
state by the purchaser for later use solely outside the state of
Minnesota. Mailing and reply envelopes and cards used
exclusively in connection with these advertising and promotional
materials are included in this exemption regardless of where the
mailing occurs.
Subd. 12. [WIND ENERGY CONVERSION SYSTEMS.] Wind energy
conversion systems, as defined in section 216C.06, subdivision
12, that are used as an electric power source are exempt, and
the materials used to manufacture, install, construct, repair,
or replace them are exempt.
Subd. 13. [OUTSTATE TRANSPORT OR DELIVERY.] (a) Tangible
personal property is exempt if the property, without
intermediate use, is:
(1) shipped or transported outside Minnesota by the
purchaser or is stored, processed, fabricated or manufactured
into, attached to or incorporated into other tangible personal
property that is transported or shipped outside Minnesota; and
(2) used in a trade or business outside Minnesota after
being shipped or transported outside of Minnesota, and is not
returned to Minnesota, except in the course of interstate
commerce; and
(3) either (i) not subject to tax in the state or country
to which it is transported for storage or use, or (ii) to be
used in other states or countries as part of a maintenance
contract.
(b) For purposes of this subdivision, storage or
processing, fabricating, manufacturing, attaching to, or
incorporating into other property is not intermediate use.
Subd. 14. [TEMPORARY STORAGE.] Tangible personal property
is exempt if all of the following conditions are met:
(1) it is shipped or brought into Minnesota by a common
carrier;
(2) without intermediate use, it is kept in a public
warehouse;
(3) it is kept for the purpose of being later transported
outside Minnesota; and
(4) after storage, it is used solely outside Minnesota,
except in the course of interstate commerce.
Subd. 15. [OUTSTATE DELIVERY BY SELLER.] Property is
exempt if:
(1) it is delivered in one of the following ways:
(i) delivery by the seller to a common carrier for delivery
outside Minnesota;
(ii) placement in the United States mail or parcel post
directed to the purchaser outside Minnesota; or
(iii) delivery to the purchaser outside Minnesota by means
of the seller's own delivery vehicles; and
(2) it is not later returned to a point within Minnesota,
except in the course of interstate commerce.
Subd. 16. [PACKING MATERIALS.] Packing materials used to
pack and ship household goods are exempt if the ultimate
destination of the goods is outside Minnesota and if the goods
are not later returned to a point within Minnesota, except in
the course of interstate commerce.
Subd. 17. [SHIPS USED IN INTERSTATE COMMERCE.] Repair,
replacement, and rebuilding parts and materials, and lubricants,
for ships or vessels used or to be used principally in
interstate or foreign commerce are exempt. Vessels with a gross
registered tonnage of at least 3,000 tons are exempt.
Subd. 18. [CUSTOM COMPUTER SOFTWARE.] The design,
development, writing, translation, fabrication, lease, or
transfer for a consideration of title or possession of a custom
computer program is exempt. "Custom computer program" means a
computer program prepared to the special order of the customer,
either in the form of written procedures or in the form of
storage media on which, or in which, the program is recorded, or
any required documentation or manuals designed to facilitate the
use of the custom computer program transferred. It includes
those services represented by separately stated charges for
modifications to an existing prewritten program that are
prepared to the special order of the customer. It does not
include a "canned" or prewritten computer program that is held
or existing for general or repeated sale or lease, even if the
prewritten or "canned" program was initially developed on a
custom basis or for in-house use. Modification to an existing
prewritten program to meet the customer's needs is custom
computer programming only to the extent of the modification.
Subd. 19. [PETROLEUM PRODUCTS.] The following petroleum
products are exempt:
(1) products upon which a tax has been imposed and paid
under chapter 296A, and for which no refund has been or will be
allowed because the buyer used the fuel for nonhighway use;
(2) products that are used in the improvement of
agricultural land by constructing, maintaining, and repairing
drainage ditches, tile drainage systems, grass waterways, water
impoundment, and other erosion control structures;
(3) products purchased by a transit system receiving
financial assistance under section 174.24 or 473.384;
(4) products used in a passenger snowmobile, as defined in
section 296A.01, subdivision 39, for off-highway business use as
part of the operations of a resort as provided under section
296A.16, subdivision 2, clause (2); or
(5) products purchased by a state or a political
subdivision of a state for use in motor vehicles exempt from
registration under section 168.012, subdivision 1, paragraph (b).
Subd. 20. [NATURAL GAS IN VEHICLES.] Natural gas to be
used as a fuel in vehicles propelled by natural gas is exempt.
Subd. 21. [SNOWMAKING.] Electricity used to make snow for
outdoor use for ski hills, ski slopes, or ski trails is exempt.
Subd. 22. [COPIES OF COURT REPORTER DOCUMENTS.]
Transcripts or copies of transcripts of verbatim testimony are
exempt if produced and sold by court reporters or other
transcribers of legal proceedings to individuals or entities
that are parties to or representatives of parties to the
proceeding to which the transcript relates.
Subd. 23. [AUTOMATIC FIRE-SAFETY SPRINKLER SYSTEMS.]
Automatic fire-safety sprinkler systems described in section
273.11, subdivision 6a, are exempt.
Subd. 24. [WASTE PROCESSING EQUIPMENT.] Equipment used for
processing solid or hazardous waste at a resource recovery
facility, as defined in section 115A.03, subdivision 28, is
exempt, including pollution control equipment at a resource
recovery facility that burns refuse-derived fuel or mixed
municipal solid waste as its primary fuel.
Subd. 25. [OCCASIONAL SALES.] (a) Isolated or occasional
sales of tangible personal property in Minnesota not made in the
normal course of business of selling that kind of property are
exempt. The storage, use, or consumption of property acquired
as a result of such a sale is exempt.
(b) This exemption applies to a sale of tangible personal
property primarily used in a trade or business only if one of
the following conditions are satisfied: (1) the sale occurs in
a transaction subject to or described in section 118, 331, 332,
336, 337, 338, 351, 355, 368, 721, 731, 1031, or 1033 of the
Internal Revenue Code; (2) the sale is between members of a
controlled group as defined in section 1563(a) of the Internal
Revenue Code; (3) the sale is a sale of farm machinery; (4) the
sale is a farm auction sale; (5) the sale is a sale of
substantially all of the assets of a trade or business; or (6)
the total amount of gross receipts from the sale of trade or
business property made during the calendar month of the sale and
the preceding 11 calendar months does not exceed $1,000.
(c) For purposes of this subdivision, the following terms
have the meanings given.
(1) A "farm auction" is a public auction conducted by a
licensed auctioneer if substantially all of the property sold
consists of property used in the trade or business of farming
and property not used primarily in a trade or business.
(2) "Trade or business" includes the assets of a separate
division, branch, or identifiable segment of a trade or business
if, before the sale, the income and expenses attributable to the
separate division, branch, or identifiable segment could be
separately ascertained from the books of account or record (the
lease or rental of an identifiable segment does not qualify for
the exemption).
(3) A "sale of substantially all of the assets of a trade
or business" must occur as a single transaction or a series of
related transactions within the 12-month period beginning on the
date of the first sale of assets intended to qualify for the
exemption provided in paragraph (b), clause (5).
Subd. 26. [INTERSTATE WATS LINES.] Long distance telephone
services are exempt if the service (1) consists of a wide area
telephone line that permits a long distance call to an
individual or business located in Minnesota to be made from a
location outside of Minnesota at no toll charge to the person
placing the call; or (2) entitles a customer, upon payment of a
periodic charge that is determined either as a flat amount or
upon the basis of total elapsed transmission time, to the
privilege of an unlimited number of long distance calls made
from a location in Minnesota to a location outside of Minnesota
if the customer is a qualified provider of telemarketing
services. As used in this subdivision, a "qualified provider of
telemarketing services" is a telemarketing firm that derives at
least 80 percent of its revenues from one or more of the
following activities: soliciting or providing information,
soliciting sales or receiving orders, and conducting research by
means of telegraph, telephone, computer database, fiber optic,
microwave, or other communication system.
Subd. 27. [MOTOR VEHICLES.] Motor vehicles taxable under
the provisions of chapter 297B are exempt.
Subd. 28. [MEDICAL SUPPLIES.] Medical supplies purchased
by a licensed health care facility or licensed health care
professional to provide medical treatment to residents or
patients are exempt. The exemption does not apply to medical
equipment or components of medical equipment, laboratory
supplies, radiological supplies, and other items used in
providing medical services. For purposes of this subdivision,
"medical supplies" means adhesive and nonadhesive bandages,
gauze pads and strips, cotton applicators, antiseptics,
nonprescription drugs, eye solution, and other similar supplies
used directly on the resident or patient in providing medical
services.
Subd. 29. [PRIZES.] Tangible personal property that will
be given as prizes to players in games of skill or chance is
exempt if the games are conducted at events such as community
festivals, fairs, and carnivals and if the events last less than
six days. This exemption does not apply to property awarded as
prizes in connection with lawful gambling as defined in section
349.12 or the state lottery.
Subd. 30. [TELEVISION COMMERCIALS.] Tangible personal
property primarily used or consumed in the preproduction,
production, or postproduction of a television commercial is
exempt. Any such commercial, regardless of the medium in which
it is transferred, is exempt. "Preproduction" and "production"
include, but are not limited to, all activities related to the
preparation for shooting and the shooting of television
commercials, including film processing. Equipment rented for
the preproduction and production activities is exempt.
"Postproduction" includes, but is not limited to, all activities
related to the finishing and duplication of television
commercials. This exemption does not apply to tangible personal
property used primarily in administration, general management,
or marketing. Machinery and equipment purchased for use in
producing such commercials and fuel, electricity, gas, or steam
used for space heating or lighting are not exempt under this
subdivision.
Subd. 31. [WASTE MANAGEMENT CONTAINERS AND
COMPACTORS.] Compactors and waste collection containers are
exempt if they are purchased by a waste management service
provider and are used in providing waste management services as
defined in section 297H.01, subdivision 12. A waste management
service provider that does not remit tax on customer charges or
lease or rental payments for compactors and waste collection
containers under chapter 297H is ineligible for this exemption.
Subd. 32. [EVENTS LOCATED OUTSIDE MINNESOTA.] Tickets or
admissions to places of amusement located outside Minnesota or
to athletic events to be held outside Minnesota are exempt.
Sec. 13. [297A.69] [AGRICULTURAL EXEMPTIONS.]
Subdivision 1. [SCOPE.] The gross receipts from the sale
of, and storage, distribution, use, or consumption of the items
contained in this section are specifically exempted from the
taxes imposed by this chapter.
Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.]
(a) Materials stored, used, or consumed in agricultural
production of personal property intended to be sold ultimately
at retail are exempt, whether or not the item becomes an
ingredient or constituent part of the property produced.
Materials that qualify for this exemption include, but are not
limited to, the following:
(1) feeds, seeds, trees, fertilizers, and herbicides,
including when purchased for use by farmers in a federal or
state farm or conservation program;
(2) materials sold to a veterinarian to be used or consumed
in the care, medication, and treatment of agricultural
production animals and horses;
(3) chemicals, including chemicals used for cleaning food
processing machinery and equipment;
(4) materials, including chemicals, fuels, and electricity
purchased by persons engaged in agricultural production to treat
waste generated as a result of the production process;
(5) fuels, electricity, gas, and steam used or consumed in
the production process, except that electricity, gas, or steam
used for space heating or lighting is exempt only if it is
necessary to produce that particular agricultural product;
(6) petroleum products and lubricants;
(7) packaging materials, including returnable containers
used in packaging food and beverage products; and
(8) accessory tools and equipment that are separate
detachable units with an ordinary useful life of less than 12
months used in producing a direct effect upon the product.
Machinery, equipment, implements, tools, accessories,
appliances, contrivances, and furniture and fixtures, except
those listed in this clause are not included within this
exemption.
(b) For purposes of this subdivision, "agricultural
production" includes, but is not limited to, horticulture,
floriculture, and the raising of pets, fur-bearing animals,
research animals, horses, farmed cervidae as defined in section
17.451, subdivision 2, llamas as defined in section 17.455,
subdivision 2, and ratitae as defined in section 17.453,
subdivision 3.
Subd. 3. [FARM MACHINERY REPAIR PARTS.] Repair and
replacement parts, except tires, used for maintenance or repair
of farm machinery are exempt, if the part replaces a farm
machinery part assigned a specific or generic part number by the
manufacturer of the farm machinery.
Subd. 4. [FARM MACHINERY.] Farm machinery is exempt.
Subd. 5. [USED FARM TIRES.] The first $5,000 of gross
receipts from the sales of used, remanufactured, or repaired
tires for farm machinery, by a sole proprietor, in a calendar
year are exempt if:
(1) the seller had gross receipts from all sales of less
than $10,000 in the previous year; and
(2) the tires are not retreaded.
Subd. 6. [HORSES; RELATED MATERIALS.] (a) Horses,
including racehorses, are exempt.
(b) Materials, including feed and bedding, used or consumed
in the breeding, raising, owning, boarding, and keeping of
horses are exempt. Machinery, equipment, implements, tools,
appliances, furniture, and fixtures used in the breeding,
raising, owning, boarding, and keeping of horses are not
included within this exemption.
Sec. 14. [297A.70] [EXEMPTIONS FOR GOVERNMENTS AND
NONPROFIT GROUPS.]
Subdivision 1. [SCOPE.] (a) The gross receipts from sales
of items to or by, and storage, distribution, use, or
consumption of items by the organizations listed in this section
are specifically exempted from the taxes imposed by this chapter.
(b) Notwithstanding any law to the contrary enacted before
1992, only sales to governments and political subdivisions
listed in this section are exempt from the taxes imposed by this
chapter.
(c) "Sales" includes purchases under an installment
contract or lease purchase agreement under section 465.71.
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;
(4) other states or political subdivisions of other states,
if the sale would be exempt from taxation if it occurred in that
state; and
(5) sales to public libraries, public library systems,
multicounty, multitype library systems as defined in section
134.001, county law libraries under chapter 134A, 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) meals and lodging as defined under section 297A.61,
subdivisions 3, paragraph (d), and 16, paragraph (c), except for
meals and lodging 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.
Subd. 3. [SALES OF CERTAIN GOODS AND SERVICES TO
GOVERNMENT.] (a) The following sales to or use by the specified
governments and political subdivisions of the state are exempt:
(1) supplies and equipment used to provide medical care in
the operation of an ambulance service owned and operated by a
political subdivision of the state;
(2) repair and replacement parts for emergency rescue
vehicles, fire trucks, and fire apparatus to a political
subdivision;
(3) machinery and equipment, except for motor vehicles,
used directly for mixed municipal solid waste management
services at a solid waste disposal facility as defined in
section 115A.03, subdivision 10;
(4) chore and homemaking services to a political
subdivision of the state to be provided to elderly or disabled
individuals;
(5) telephone services to the department of administration
that are used to provide telecommunications services through the
intertechnologies revolving fund;
(6) firefighter personal protective equipment as defined in
paragraph (b), if purchased or authorized by and for the use of
an organized fire department, fire protection district, or fire
company regularly charged with the responsibility of providing
fire protection to the state or a political subdivision;
(7) bullet-resistant body armor that provides the wearer
with ballistic and trauma protection, if purchased by a law
enforcement agency of the state or a political subdivision of
the state, or a licensed peace officer, as defined in section
626.84, subdivision 1;
(8) motor vehicles purchased or leased by political
subdivisions of the state if the vehicles are exempt from
registration under section 168.012, subdivision 1, paragraph
(b);
(9) equipment designed to process, dewater, and recycle
biosolids for wastewater treatment facilities of political
subdivisions, and materials incidental to installation of that
equipment; and materials used to construct buildings to house
the equipment, if the materials are purchased after June 30,
1998, and before July 1, 2001; and
(10) sales to a town of gravel and of machinery, equipment,
and accessories, except motor vehicles, used exclusively for
road and bridge maintenance, and leases by a town of motor
vehicles exempt from tax under section 297B.03, clause (10).
(b) For purposes of this subdivision, "firefighters
personal protective equipment" means helmets, including face
shields, chin straps, and neck liners; bunker coats and pants,
including pant suspenders; boots; gloves; head covers or hoods;
wildfire jackets; protective coveralls; goggles; self-contained
breathing apparatus; canister filter masks; personal alert
safety systems; spanner belts; optical or thermal imaging search
devices; and all safety equipment required by the Occupational
Safety and Health Administration.
Subd. 4. [SALES TO NONPROFIT GROUPS.] (a) All sales,
except those listed in paragraph (b), to the following
"nonprofit organizations" are exempt:
(1) an entity organized and operated exclusively for
charitable, religious, or educational purposes if the item
purchased is used in the performance of charitable, religious,
or educational functions;
(2) any senior citizen group or association of groups that:
(i) in general limits membership to persons who are either
age 55 or older, or physically disabled; and
(ii) 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; and
(3) an entity organized and operated exclusively to
maintain a cemetery owned by a religious organization.
(b) This exemption does not apply to the following sales:
(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 that will not be used principally by the tax-exempt
entities; and
(3) meals and lodging as defined under section 297A.61,
subdivisions 3, paragraph (d), and 16, paragraph (c); and
(4) leasing of a motor vehicle as defined in section
297B.01, subdivision 5.
Subd. 5. [VETERANS GROUPS.] Sales to an organization of
military service veterans or an auxiliary unit of an
organization of military service veterans are exempt if:
(1) the organization or auxiliary unit is organized within
the state of Minnesota and is exempt from federal taxation under
section 501(c), clause (19), of the Internal Revenue Code; and
(2) the tangible personal property is for charitable,
civic, educational, or nonprofit uses and not for social,
recreational, pleasure, or profit uses.
Subd. 6. [AMBULANCES.] The lease of a motor vehicle for
use as an ambulance by an ambulance service licensed under
section 144E.10 is exempt.
Subd. 7. [HOSPITALS AND OUTPATIENT SURGICAL CENTERS.] (a)
Sales, except for those listed in paragraph (c), to a hospital
are exempt, if the items purchased are used in providing
hospital services. For purposes of this subdivision, "hospital"
means a hospital organized and operated for charitable purposes
within the meaning of section 501(c)(3) of the Internal Revenue
Code, and licensed under chapter 144 or by any other
jurisdiction, and "hospital services" are services authorized or
required to be performed by a "hospital" under chapter 144.
(b) Sales, except for those listed in paragraph (c), to an
outpatient surgical center are exempt, if the items purchased
are used in providing outpatient surgical services. For
purposes of this subdivision, "outpatient surgical center" means
an outpatient surgical center organized and operated for
charitable purposes within the meaning or section 501(c)(3) of
the Internal Revenue Code, and licensed under chapter 144 or by
any other jurisdiction. For the purposes of this subdivision,
"outpatient surgical services" means: (1) services authorized
or required to be performed by an outpatient surgical center
under chapter 144 or under the applicable licensure law of any
other jurisdiction; and (2) urgent care. For purposes of this
subdivision, "urgent care" means health services furnished to a
person whose medical condition is sufficiently acute to require
treatment unavailable through, or inappropriate to be provided
by, a clinic or physician's office, but not so acute as to
require treatment in a hospital emergency room.
(c) This exemption does not apply to the following products
and services:
(1) purchases made by a clinic, physician's office, or any
other medical facility not operating as a hospital or outpatient
surgical center, even though the clinic, office, or facility may
be owned and operated by a hospital or outpatient surgical
center;
(2) sales under section 297A.61, subdivisions 3, paragraph
(d), and 16, paragraph (c);
(3) building and construction materials used in
constructing buildings or facilities that will not be used
principally by the hospital or outpatient surgical center;
(4) 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 hospital or outpatient
surgical center; or
(5) the leasing of a motor vehicle as defined in section
297B.01, subdivision 5.
Subd. 8. [REGIONWIDE PUBLIC SAFETY RADIO COMMUNICATION
SYSTEM; PRODUCT AND SERVICES.] Products and services including,
but not limited to, end user equipment used for construction,
ownership, operation, maintenance, and enhancement of the
backbone system of the regionwide public safety radio
communication system established under sections 473.891 to
473.905, are exempt. For purposes of this subdivision, backbone
system is defined in section 473.891, subdivision 9. This
subdivision is effective for purchases, sales, storage, use, or
consumption occurring before August 1, 2003.
Subd. 9. [SACRAMENTAL WINE.] Wine for sacramental purposes
in religious ceremonies, as described in section 340A.316, is
exempt if the wine is purchased from a nonprofit religious
organization meeting the requirements of subdivision 4 or from a
person authorized to import sacramental wine without a license
as provided in section 340A.316.
Subd. 10. [NONPROFIT TICKETS OR ADMISSIONS.] Tickets or
admissions to the premises of or events sponsored by an
organization that provides an opportunity for citizens of the
state to participate in the creation, performance, or
appreciation of the arts are exempt if the organization is
either (1) a tax-exempt organization within the meaning of
Minnesota Statutes 1980, section 290.05, subdivision 1, clause
(i), or (2) a municipal board that promotes cultural and arts
activities. The exemption provided with respect to a municipal
board applies only to tickets and admissions to events sponsored
by the board.
Subd. 11. [SCHOOL TICKETS OR ADMISSIONS.] Tickets or
admissions to regular season school games, events, and
activities are exempt. For purposes of this subdivision,
"school" has the meaning given it in section 120A.22,
subdivision 4.
Subd. 12. [YMCA, YWCA, AND JCC MEMBERSHIPS.] The sale of
memberships, meaning both one-time initiation fees and periodic
membership dues, to an association incorporated under section
315.44 or an organization defined under section 315.51, are
exempt. However, all separate charges made for the privilege of
having access to and the use of the association's sports and
athletic facilities are taxable.
Subd. 13. [FUNDRAISING SALES BY OR FOR NONPROFIT
GROUPS.] (a) The following sales by the specified organizations
for fundraising purposes are exempt, subject to the limitations
listed in paragraph (b):
(1) all sales made by an organization that exists solely
for the purpose of providing educational or social activities
for young people primarily age 18 and under;
(2) all sales made by an organization that is a senior
citizen group or association of groups if (i) in general it
limits membership to persons age 55 or older; (ii) it is
organized and operated exclusively for pleasure, recreation, and
other nonprofit purposes; and (iii) no part of its net earnings
inures to the benefit of any private shareholders;
(3) the sale or use of tickets or admissions to a golf
tournament held in Minnesota if the beneficiary of the
tournament's net proceeds qualifies as a tax-exempt organization
under section 501(c)(3) of the Internal Revenue Code; and
(4) sales of gum, candy, and candy products sold for
fundraising purposes by a nonprofit organization that provides
educational and social activities primarily for young people 18
years of age and under.
(b) The exemptions listed in paragraph (a) are limited in
the following manner:
(1) the exemption under paragraph (a), clauses (1) and (2),
applies only if the gross annual receipts of the organization
from fundraising do not exceed $10,000; and
(2) the exemption under paragraph (a), clause (1), does not
apply if the sales are derived from admission charges or from
activities for which the money must be deposited with the school
district treasurer under section 123B.49, subdivision 2, or be
recorded in the same manner as other revenues or expenditures of
the school district under section 123B.49, subdivision 4.
(c) For purposes of this subdivision, a club, association,
or other organization of elementary or secondary school students
organized for the purpose of carrying on sports, educational, or
other extracurricular activities is a separate organization from
the school district or school for purposes of applying the
$10,000 limit.
Subd. 14. [FUNDRAISING EVENTS SPONSORED BY NONPROFIT
GROUPS.] (a) Sales of tangible personal property at, and
admission charges for fundraising events sponsored by, a
nonprofit organization are exempt if the entire proceeds, less
the necessary expenses for the event, will be used solely and
exclusively for charitable, religious, or educational purposes.
Exempt sales include the sale of food, meals, drinks, and
taxable services at the fundraising event.
(b) This exemption is limited in the following manner:
(1) it does not apply to admission charges for events
involving bingo or other gambling activities or to charges for
use of amusement devices involving bingo or other gambling
activities;
(2) all gross receipts are taxable if the profits are not
used solely and exclusively for charitable, religious, or
educational purposes;
(3) it does not apply unless the organization keeps a
separate accounting record, including receipts and disbursements
from each fundraising event that documents all deductions from
gross receipts with receipts and other records;
(4) it does not apply to any sale made by or in the name of
a nonprofit corporation as the active or passive agent of a
person that is not a nonprofit corporation;
(5) all gross receipts are taxable if fundraising events
exceed 24 days per year; and
(6) it does not apply to fundraising events conducted on
premises leased for more than five days but less than 30 days.
(c) For purposes of this subdivision, a "nonprofit
organization" means any unit of government, corporation,
society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic,
fraternal, and senior citizens' or veterans' purposes, no part
of the net earnings of which inures to the benefit of a private
individual.
Subd. 15. [STATEWIDE AMATEUR ATHLETIC GAMES.]
Notwithstanding section 297A.61, subdivision 3, or any other
provision of this chapter, the gross receipts from the following
sales made to or by a nonprofit corporation designated by the
Minnesota amateur sports commission to conduct a series of
statewide amateur athletic games and related events, workshops,
and clinics are exempt:
(1) sales of tangible personal property to or the storage,
use, or other consumption of tangible personal property by the
nonprofit corporation; and
(2) sales of tangible personal property, admission charges,
and sales of food, meals, and drinks by the nonprofit
corporation at fundraising events, athletic events, or athletic
facilities.
Subd. 16. [CAMP FEES.] Camp fees to camps or other
recreation facilities owned and operated by an exempt
organization under section 501(c)(3) of the Internal Revenue
Code are exempt if the camps or facilities provide educational
and social activities for young people primarily age 18 and
under.
Sec. 15. [297A.71] [CONSTRUCTION EXEMPTIONS.]
Subdivision 1. [SCOPE.] The gross receipts from the sale
of, and storage, distribution, use, or consumption of the
tangible personal property contained in this section are
specifically exempted from the taxes imposed by this chapter.
Building materials, equipment, and supplies and other items
exempt under this section are exempt regardless of whether
purchased by the owner or a contractor, subcontractor, or
builder.
Subd. 2. [STATE CONVENTION CENTER.] Building materials and
supplies for constructing improvements to a state convention
center located in a city located outside the metropolitan area
as defined in section 473.121, subdivision 2, and governed by an
11-person board of which four are appointed by the governor are
exempt if the improvements are financed in whole or in part by
nonstate resources including, but not limited to, revenue or
general obligations issued by the state convention center board
of the city in which the center is located.
Subd. 3. [CORRECTIONAL FACILITIES.] Building materials and
supplies for constructing or improving an adult or juvenile
correctional facility by a county, home rule charter city, or
statutory city are exempt if the project is mandated by state or
federal law, rule, or regulation. 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.
Subd. 4. [LAKE SUPERIOR CENTER.] Building materials and
supplies for construction of the Lake Superior Center are exempt.
Subd. 5. [SCIENCE MUSEUM.] Building materials and supplies
for construction of the Science Museum of Minnesota are exempt.
Subd. 6. [BUSINESS INCUBATOR AND INDUSTRIAL PARK.]
Building materials and supplies for construction of a facility
that includes a business incubator and industrial park are
exempt if the facility:
(1) is owned and operated by a nonprofit charitable
organization that qualifies for tax exemption under section
501(c)(3) of the Internal Revenue Code;
(2) is used for the development of nonretail businesses,
offering access to equipment, space, services, and advice to the
tenant businesses, for the purpose of encouraging economic
development and job creation in the area served by the
organization, and emphasizes development of businesses that
manufacture products from materials found in the waste stream,
or manufacture alternative energy and conservation systems, or
make use of emerging environmental technologies;
(3) includes in its structure systems of material and
energy exchanges that use waste products from one industrial
process as sources of energy and material for other processes;
and
(4) makes use of solar and wind energy technology and
incorporates salvaged materials in its construction.
Subd. 7. [ALFALFA PROCESSING FACILITY.] Building materials
and supplies for constructing a facility that either develops
market-value agricultural products made from alfalfa leaf
material, or produces biomass energy fuel or electricity from
alfalfa stems in accordance with the biomass mandate imposed
under section 216B.2424 are exempt if the total capital
investment made in the value-added agricultural products and
biomass electric generation facilities is at least $50,000,000.
Subd. 8. [WOOD WASTE COGENERATION FACILITY.] Building
materials and supplies for constructing, equipping, or modifying
a district heating and cooling system cogeneration facility are
exempt if the facility:
(1) utilizes wood waste as a primary fuel source; and
(2) satisfies the requirements of the biomass mandate in
section 216B.2424, subdivision 5.
Subd. 9. [DIRECT SATELLITE BROADCASTING FACILITY.]
Building materials and supplies for constructing a new facility
in Minnesota for providing federal communications commission
licensed direct satellite broadcasting services using direct
broadcast satellites operating in the 12-GHz. band or fixed
satellite regional or national program services, as defined in
section 272.02, subdivision 16, are exempt if construction of
the facility was commenced after June 30, 1993. All machinery,
equipment, tools, accessories, appliances, contrivances,
furniture, fixtures, and all technical equipment or tangible
personal property of any other nature or description necessary
to the construction and equipping of that facility in order to
provide those services are also exempt.
Subd. 10. [AIRCRAFT HEAVY MAINTENANCE FACILITY.]
Materials, equipment, and supplies used or consumed in
constructing a heavy maintenance facility for aircraft that is
to be owned by the state of Minnesota or one of its political
subdivisions and leased by an airline company, or an aircraft
engine repair facility described in section 116R.02, subdivision
6, are exempt. Except for equipment owned or leased by a
contractor, all machinery, equipment, and tools necessary to the
construction and equipping of that facility in order to provide
those services are also exempt.
Subd. 11. [BUILDING MATERIALS; DISABLED VETERANS.]
Building materials to be used in the construction or remodeling
of a residence are exempt when the construction or remodeling is
financed in whole or in part by the United States in accordance
with United States Code, title 38, sections 2101 to 2105. 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.
Subd. 12. [CHAIR LIFTS, RAMPS, ELEVATORS.] Chair lifts,
ramps, and elevators and building materials used to install or
construct them are exempt, if they are authorized by a physician
and installed in or attached to the owner's homestead. 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.
Subd. 13. [AGRICULTURE PROCESSING FACILITY MATERIALS.]
Building materials and supplies for constructing an agriculture
processing facility as defined in section 469.1811 in which the
total capital investment in the processing facility is expected
to exceed $100,000,000 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.
Subd. 14. [MINERAL PRODUCTION FACILITIES.] Building
materials, equipment, and supplies used for the construction of
the following mineral production facilities are exempt.
The mineral production facilities that qualify for this
exemption are:
(1) a value added iron products plant, which may be either
a new plant or a facility incorporated into an existing plant
that produces iron upgraded to a minimum of 75 percent iron
content or any iron alloy with a total minimum metallic content
of 90 percent;
(2) a facility used for the manufacture of fluxed taconite
pellets as defined in section 298.24;
(3) a new capital project that has a total cost of over
$40,000,000 that is directly related to production, cost, or
quality at an existing taconite facility that does not qualify
under clause (1) or (2); and
(4) a new mine or minerals processing plant for any mineral
subject to the net proceeds tax imposed under section 298.015.
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.
Subd. 15. [MINNEAPOLIS CONVENTION CENTER.] Materials,
supplies, or equipment used or consumed in the construction,
equipment, improvement, or expansion of the Minneapolis
convention center are exempt.
Subd. 16. [RIVERCENTRE ARENA.] Materials, supplies, or
equipment used or consumed in the construction, equipment,
improvement, or expansion of the RiverCentre arena complex in
the city of St. Paul are exempt.
Subd. 17. [ENVIRONMENTAL LEARNING CENTER.] Construction
materials and supplies are exempt if they are used or consumed
in constructing or improving the Long Lake Conservation Center
pursuant to the funding provided under Laws 1994, chapter 643,
section 23, subdivision 28, as amended by Laws 1995, First
Special Session chapter 2, article 1, section 48; Laws 1996,
chapter 463, section 7, subdivision 26; and Laws 1997, chapter
246, section 24. The tax must be calculated and paid as if the
rate in section 297A.62, subdivision 1, was in effect and a
refund applied for in the manner prescribed in section 297A.75.
Subd. 18. [SOYBEAN OILSEED PROCESSING AND REFINING
FACILITY.] Construction materials and supplies are exempt if:
(1) the materials and supplies are used or consumed in
constructing a facility for soybean oilseed processing and
refining;
(2) the total capital investment made in the facility is at
least $60,000,000; and
(3) the facility is constructed by a Minnesota-based
cooperative, organized under chapter 308A.
Subd. 19. [EARLE BROWN HERITAGE CENTER.] Materials and
supplies used or consumed in and equipment incorporated into the
construction, improvement, or expansion of the Earle Brown
Heritage Center in Brooklyn Center are exempt. This subdivision
is effective for purchases made before July 1, 2003.
Subd. 20. [CONSTRUCTION MATERIALS AND SUPPLIES; BEEF
PROCESSING FACILITY.] Materials and supplies used or consumed
in, and equipment incorporated into, the expansion, remodeling,
or improvement of a facility used for cattle slaughtering are
exempt if:
(1) the cost of the project is expected to exceed
$15,000,000;
(2) the expansion, remodeling, or improvement of the
facility will be used to fabricate beef;
(3) the number of jobs at the facility is expected to
increase by at least 150 when the project is completed; and
(4) the project is expected to be completed by December 31,
2001.
Subd. 21. [CONSTRUCTION MATERIALS AND EQUIPMENT; BIOMASS
ELECTRICAL GENERATING FACILITY.] Materials and supplies used or
consumed in, and equipment incorporated into, the construction,
improvement, or expansion of a facility using biomass to
generate electricity are exempt if:
(1) the facility exclusively utilizes residue wood,
sawdust, bark, chipped wood, or brush to generate electricity;
(2) the facility utilizes a reciprocated grate combination
system; and
(3) the total gross capacity of the facility is 15 to 21
megawatts.
EXEMPTION CERTIFICATES
Sec. 16. [297A.72] [EXEMPTION CERTIFICATES.]
Subdivision 1. [DUTY OF RETAILER.] An exemption
certificate conclusively relieves the retailer from collecting
and remitting the tax only if taken in good faith from the
purchaser.
Subd. 2. [CONTENT AND FORM OF EXEMPTION CERTIFICATE.] An
exemption certificate must be substantially in the form
prescribed by the commissioner and:
(1) be signed by the purchaser or meet the requirements of
section 289A.07;
(2) bear the name and address of the purchaser;
(3) indicate the sales tax account number, if any, issued
to the purchaser;
(4) indicate the general character of the property sold by
the purchaser in the regular course of business or the
activities carried on by the organization; and
(5) identify the property purchased.
Sec. 17. [297A.73] [IMPROPER USE OF ITEM OBTAINED WITH
EXEMPTION CERTIFICATE.]
If a purchaser who gives an exemption certificate makes any
use of the item that is not for a purpose exempted under this
chapter, that use is considered a retail sale by the purchaser
and the sales price to the purchaser is considered the gross
receipts. If the sole use is rental while holding for sale, the
purchaser shall include in the purchaser's gross receipts the
amount of the rental charged. Upon subsequent sale of the item,
the seller shall include the entire amount of gross receipts
received from the sale without deduction of amounts previously
received as rentals.
Sec. 18. [297A.74] [COMMINGLING EXEMPTION CERTIFICATE
ITEMS.]
If a purchaser gives an exemption certificate for the
purchase of fungible items and later commingles the items with
similar fungible items not purchased exempt, sales from the
commingled items are considered sales of items purchased exempt
until a quantity has been sold that equals the quantity
purchased exempt.
EXEMPTION REFUNDS
Sec. 19. [297A.75] [REFUND; APPROPRIATION.]
Subdivision 1. [TAX COLLECTED.] The tax on the gross
receipts from the sale of 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; and
(6) chair lifts, ramps, elevators, and associated building
materials exempt under section 297A.71, subdivision 12.
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, clause (4), 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; and
(4) for subdivision 1, clause (6), the applicant must be
the owner of the homestead property.
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), or (6), 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 270.76 from the date the refund claim is
filed for taxes paid under subdivision 1, clauses (1) to (3),
and (5), and from 60 days after the date the refund claim is
filed with the commissioner for claims filed under subdivision
1, clauses (4) and (6).
Subd. 5. [APPROPRIATION.] The amount required to make the
refunds is annually appropriated to the commissioner.
COMPUTATION AND COLLECTION OF TAXES
Sec. 20. [297A.76] [COMPUTATION OF SALES AND USE TAXES.]
Subdivision 1. [ROUNDING UP OR DOWN.] In computing the
sales or use tax to be collected or remitted as the result of a
transaction, amounts of tax less than one-half of one cent must
be disregarded and amounts of tax of one-half cent or more must
be considered an additional cent.
Subd. 2. [UNIFORM TAX COLLECTION METHODS; RULES.]
Agreements between competitive retailers or the adoption of
appropriate rules or regulations by organizations or
associations of retailers to provide uniform methods for adding
the sales tax or its average equivalent, which do not involve
otherwise unlawful price fixing agreements, are expressly
authorized and are not in violation of any Minnesota laws
prohibiting such agreements. The commissioner may prescribe
rules for such agreements.
Sec. 21. [297A.77] [COLLECTION OF SALES AND USE TAXES.]
Subdivision 1. [COLLECTION OF TAX AT TIME OF SALE.] The
tax must be stated and charged separately from the sales price
or charge for service insofar as practicable and must be
collected by the seller from the purchaser.
Subd. 2. [RECEIPT.] For use tax, the retailer shall give
the purchaser a tax receipt. The receipt must indicate the tax
in the form of a notation on the sales slip or receipt for the
sales price or in another form as prescribed by the commissioner.
Subd. 3. [TAX MUST BE REMITTED.] The tax collected by a
retailer under this section must be remitted to the commissioner
as provided in chapter 289A and this chapter.
Subd. 4. [STATUS OF SALES AND USE TAXES AS DEBT.] Sales
and use taxes that are required to be collected by a retailer
are debts from the purchaser to the retailer recoverable at law
in the same manner as other debts.
Sec. 22. [297A.78] [LIABILITY FOR USE TAX; RECEIPT AS
EVIDENCE.]
Liability for the payment of the use tax is not
extinguished until the tax has been paid to Minnesota. However,
a receipt from a retailer given to the purchaser under section
297A.77, subdivision 2, relieves the purchaser of further
liability for the tax to which the receipt refers, unless the
purchaser knows or has reason to know that the retailer did not
have a permit to collect the tax.
Sec. 23. [297A.79] [REPORTING OF GROSS RECEIPTS.]
At the option of the taxpayer, gross receipts from sales
may be reported on the cash basis as the consideration is
received or on the accrual basis as sales are made.
Sec. 24. [297A.80] [TAXES IN OTHER STATES; OFFSET AGAINST
USE TAX.]
If an article of tangible personal property or an item
listed in section 297A.63 has already been taxed by another
state for its sale, storage, use, or other consumption in an
amount less than the tax imposed by this chapter, then as to the
person who paid the tax in the other state, section 297A.63
applies only at a rate measured by the difference between the
rate imposed under section 297A.62 and the rate by which the
previous tax was computed. If the tax imposed in the other
state is equal to or greater than the tax imposed in this state,
then no tax is due from that person under section 297A.63.
Sec. 25. [297A.81] [UNCOLLECTIBLE DEBTS; OFFSET AGAINST
OTHER TAXES.]
The taxpayer may offset against the taxes payable for any
reporting period the amount of taxes imposed by this chapter
previously paid as a result of any transaction the consideration
for which became a debt owed to the taxpayer that became
uncollectible during the reporting period, but only in
proportion to the portion of the debt that became
uncollectible. Section 289A.40, subdivision 2, applies to an
offset under this section.
Sec. 26. [297A.82] [AIRCRAFT; FLIGHT EQUIPMENT; PAYMENT OF
TAXES; EXEMPTIONS.]
Subdivision 1. [REQUIREMENTS FOR REGISTRATION.] An
aircraft must not be registered or licensed in this state unless
the applicant presents proof that the sales or use tax imposed
by this chapter has been paid or that the transaction is exempt
from the sales and use tax. The exemption for an occasional
sale under section 297A.67, subdivision 23, or 297A.68,
subdivision 25, does not apply to the sale or purchase of an
aircraft.
Subd. 2. [PAYMENT OF TAX TO DEALER.] If an aircraft is
purchased from a dealer holding a valid sales and use tax permit
under this chapter, the applicant shall present proof that the
tax has been paid to the dealer.
Subd. 3. [PAYMENT OF TAX TO COMMISSIONER.] If the aircraft
is purchased from a person who is not the holder of a valid
sales and use tax permit under this chapter, the purchaser shall
pay the tax to the commissioner of revenue prior to registering
or licensing the aircraft in this state. The commissioner of
revenue shall issue a certificate stating that the sales and use
tax in respect to the transaction has been paid.
Subd. 4. [EXEMPTIONS.] (a) The following transactions are
exempt from the tax imposed in this chapter to the extent
provided.
(b) The purchase or use of aircraft previously registered
in Minnesota by a corporation or partnership is exempt if the
transfer constitutes a transfer within the meaning of section
351 or 721 of the Internal Revenue Code.
(c) The sale to or purchase, storage, use, or consumption
by a licensed aircraft dealer of an aircraft for which a
commercial use permit has been issued pursuant to section
360.654 is exempt, if the aircraft is resold while the permit is
in effect.
(d) Airflight equipment when sold to, or purchased, stored,
used, or consumed by airline companies, as defined in section
270.071, subdivision 4, is exempt. For purposes of this
subdivision, "airflight equipment" includes airplanes and parts
necessary for the repair and maintenance of such airflight
equipment, and flight simulators, but does not include airplanes
with a gross weight of less than 30,000 pounds that are used on
intermittent or irregularly timed flights.
Subd. 5. [EXEMPT PURCHASE CERTIFICATE.] If the purchase of
an aircraft is exempt under this chapter, the commissioner shall
issue a certificate that no sales or use tax is due and owing in
respect to the transaction.
Subd. 6. [SALES AND LEASES; TAX TREATMENT.] (a) A sale of
aircraft and parts for the repair of aircraft purchased by a
nonprofit, incorporated flying club or association utilized
solely by the corporation by leasing the aircraft to
shareholders of the corporation is exempt as property purchased
for resale. The leasing of the aircraft to the shareholders by
the flying club or association is taxable as a retail sale.
(b) A lease of aircraft utilized by a lessee for leasing to
others, whether or not the lessee also utilizes the aircraft for
charter service or for flight instruction if no separate charge
is made for aircraft rental, is exempt as a purchase for resale.
However, a proportionate share of the lease payment reflecting
use for flight instruction or charter service is taxable under
section 297A.63.
PERMITS
Sec. 27. [297A.83] [APPLICATION FOR PERMIT.]
Subdivision 1. [PERSONS APPLYING.] (a) A retailer required
to collect and remit sales taxes under section 297A.66 shall
file with the commissioner an application for a permit.
(b) A retailer making retail sales from outside this state
to a destination within this state who is not required to obtain
a permit under paragraph (a) may nevertheless voluntarily file
an application for a permit.
(c) The commissioner may require any person or class of
persons obligated to file a use tax return under section
289A.11, subdivision 3, to file an application for a permit.
Subd. 2. [APPLICATION REQUIREMENTS.] The application must
be made on a form prescribed by the commissioner and indicate
the name under which the applicant intends to transact business,
the location of the applicant's place or places of business, and
other information the commissioner may require. The application
must be filed by the owner, if a natural person; by a member or
partner, if the owner is an association or partnership; or by a
person authorized to file the application, if the owner is a
corporation.
Subd. 3. [COMMISSIONER'S DISCRETION.] (a) The commissioner
may decline to issue a permit to a retailer not maintaining a
place of business in this state, or may cancel a permit
previously issued to the retailer, if the commissioner believes
that the tax can be collected more effectively from the persons
using the property in this state. A refusal to issue or
cancellation of a permit on such grounds does not affect the
retailer's right to make retail sales from outside this state to
destinations within this state.
(b) If the commissioner considers it necessary for the
efficient administration of the tax to regard a salesperson,
representative, trucker, peddler, or canvasser as the agent of
the dealer, distributor, supervisor, employer, or other person
under whom that person operates or from whom the person obtains
the tangible personal property sold, whether making sales
personally or in behalf of that dealer, distributor, supervisor,
employer, or other person, the commissioner may regard the
salesperson, representative, trucker, peddler, or canvasser as
such agent, and may regard the dealer, distributor, supervisor,
employer, or other person as a retailer for the purposes of
collecting the tax.
Sec. 28. [297A.84] [PERMITS ISSUED.]
The commissioner shall issue a permit to each applicant who
has complied with section 297A.83, and with section 297A.92 if
security is required. A person is considered to have a permit
if the person has a Minnesota tax identification number issued
by the department that is currently active for taxes imposed by
this chapter. A permit is valid until canceled or revoked. It
is not assignable and is valid only for the person in whose name
it is granted and for the transaction of business at the places
designated on the permit.
Sec. 29. [297A.85] [CANCELLATION OF PERMITS.]
The commissioner may cancel a permit if one of the
following conditions occurs:
(1) the permit holder has not filed a sales or use tax
return for at least one year;
(2) the permit holder has not reported any sales or use tax
liability on the permit holder's returns for at least two years;
or
(3) the permit holder requests cancellation of the permit.
Sec. 30. [297A.86] [REVOCATION OF PERMITS.]
Subdivision 1. [NOTICE OF REVOCATION; HEARINGS.] (a) If a
person fails to comply with this chapter or the sales and use
tax provisions of chapter 289A or the rules adopted under either
chapter, without reasonable cause, the commissioner may give the
person 30 days' notice in writing, specifying the violations,
and stating that based on the violations the commissioner
intends to revoke the person's permit. The notice must also
advise the person of the right to contest the revocation under
this subdivision. It must also explain the general procedures
for a contested case hearing under chapter 14. The notice may
be served personally or by mail in the manner prescribed for
service of an order of assessment.
(b) If the person does not request a hearing within 30 days
after the date of the notice of intent, the commissioner may
serve a notice of revocation of permit upon the person, and the
permit is revoked. If a hearing is timely requested, and held,
the permit is revoked after the commissioner serves an order of
revocation of permit under section 14.62, subdivision 1.
Subd. 2. [NEW PERMITS AFTER REVOCATION.] (a) The
commissioner shall not issue a new permit after revocation or
reinstate a revoked permit unless the taxpayer applies for a
permit and provides reasonable evidence of intention to comply
with the sales and use tax laws and rules. The commissioner may
require the applicant to provide security, in addition to that
authorized by section 297A.92, in an amount reasonably necessary
to ensure compliance with the sales and use tax laws and rules.
(b) If a taxpayer has had a permit or permits revoked three
times in a five-year period, the commissioner shall not issue a
new permit or reinstate the revoked permit until 24 months have
elapsed after revocation and the taxpayer has satisfied the
conditions for reinstatement of a revoked permit or issuance of
a new permit imposed by this section and rules adopted under
this section.
(c) For purposes of this subdivision, "taxpayer" means:
(1) an individual, if a revoked permit was issued to or in
the name of an individual, or a corporation or partnership, if a
revoked permit was issued to or in the name of a corporation or
partnership; and
(2) an officer of a corporation, a member of a partnership,
or an individual who is liable for delinquent sales taxes,
either for the entity for which the new or reinstated permit is
at issue, or for another entity for which a permit was
previously revoked, or personally as a permit holder.
Sec. 31. [297A.87] [FLEA MARKETS, SHOWS, AND OTHER SELLING
EVENTS.]
Subdivision 1. [EVENTS AFFECTED.] (a) This section applies
to a flea market, craft show, antique show, coin show, stamp
show, comic book show, convention exhibit area, or similar
selling event.
(b) To be subject to this section, the operator of an event
described in paragraph (a) must rent or lease space on the sale
premises to the seller, charge the seller a registration or
participation fee, or receive a percentage of sales or other
consideration from a seller as a condition to participation by a
seller in the event.
Subd. 2. [SELLER'S PERMIT OR ALTERNATE STATEMENT.] (a) The
operator of an event under subdivision 1 shall obtain one of the
following from a person who wishes to do business as a seller at
the event:
(1) evidence that the person holds a valid seller's permit
under section 297A.84; or
(2) a written statement that the person is not offering for
sale any item that is taxable under this chapter.
(b) The operator shall require the evidence or statement as
a prerequisite to participating in the event as a seller.
Subd. 3. [OCCASIONAL SALE PROVISIONS NOT APPLICABLE.] The
isolated and occasional sale provisions under section 297A.67,
subdivision 23, or under section 297A.68, subdivision 25, do not
apply to a seller at an event under this section.
DIRECT PAY
Sec. 32. [297A.89] [DIRECT PAYMENT BY PURCHASERS
PERMITTED.]
Subdivision 1. [COMMISSIONER MAY PERMIT.] The commissioner
may permit purchasers to pay taxes imposed by this chapter
directly to the commissioner. Any taxes paid by purchasers
under this section are considered use taxes, except for local
sales taxes when no corresponding local use tax is imposed.
Subd. 2. [RETAILER DOES NOT COLLECT.] The retailer shall
not collect the tax from a purchaser who furnishes to the
retailer a copy of a certificate issued by the commissioner
authorizing the purchaser to pay any sales or use tax due on
purchases made by the purchaser directly to the commissioner
under subdivision 1.
Sec. 33. [297A.90] [INTERSTATE MOTOR CARRIERS AS
RETAILERS.]
Subdivision 1. [REGISTRATION; RECORDS.] (a) A person who
is engaged in interstate for-hire transportation of tangible
personal property or passengers by motor vehicle may, under
rules prescribed by the commissioner, register as a retailer and
pay the taxes imposed by this chapter in accordance with this
section. Any taxes paid under this section are use taxes,
except local sales taxes when no corresponding local use tax is
imposed.
(b) As used in this section, "person" means: (1) one who
possesses a certificate or permit or has completed a
registration process that authorizes for-hire transportation of
property or passengers from the United States Department of
Transportation, the transportation regulation board, or the
department of transportation; (2) one who transports commodities
defined as "exempt" in for-hire transportation in interstate
commerce; or (3) one who transports tangible personal property
in interstate commerce, pursuant to contracts with persons
described in clause (1) or (2). Persons qualifying under clause
(2) or (3) must maintain on a current basis the same type of
mileage records that are required by persons specified in clause
(1) by the United States Department of Transportation.
(c) Persons who in the course of their business are
transporting solely their own goods in interstate commerce may
also register as retailers under rules prescribed by the
commissioner and pay the taxes imposed by this chapter in
accordance with this section.
Subd. 2. [PAYMENT OF TAX.] (a) Persons who are registered
as retailers may make purchases in this state or import property
into this state without payment of the sales or use taxes
imposed by this chapter at the time of purchase or importation,
if the purchases or importations come within the provisions of
this section and are made in strict compliance with the rules of
the commissioner.
(b) A person described in subdivision 1 may elect to pay
directly to the commissioner any sales or use tax that may be
due under this chapter for the acquisition of mobile
transportation equipment and parts and accessories attached or
to be attached to such equipment registered under section
168.187.
(c) The total cost of such equipment and parts and
accessories attached or to be attached to such equipment must be
multiplied by a fraction. The numerator of the fraction is the
Minnesota mileage as reported on the current pro rata
application provided for in section 168.187 and the denominator
of the fraction is the total mileage reported on the current pro
rata registration application. The amount so determined must be
multiplied by the tax rate to obtain the tax due.
In computing the tax under this section "sales price" does not
include the amount of any tax, except any manufacturer's or
importer's excise tax, imposed by the United States upon or with
respect to retail sales, whether imposed on the retailer or the
consumer.
(d) A retailer covered by this section shall make a return
and remit to the commissioner the tax due for the preceding
calendar month in accordance with sections 289A.11 and 289A.20,
subdivision 4.
Subd. 3. [REGISTRATION SUBSEQUENT TO PAYMENT OF TAX.] A
person who has paid the tax under this chapter or chapter 297B
and who meets the requirements of this section at the time of
the sale, but was not registered under this section 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
this chapter or chapter 297B and the tax calculated under
subdivision 2.
Subd. 4. [AGREEMENT WITH COMMISSIONER OF PUBLIC SAFETY.]
Notwithstanding subdivisions 1 to 3, the commissioner may enter
into an agreement with the commissioner of public safety
whereby, upon approval of both commissioners, the commissioner
of public safety shall collect the sales tax on motor vehicles
from persons defined in subdivision 1. For the purpose of
collecting the tax, the commissioner of public safety shall act
as the agent of the commissioner of revenue and shall be subject
to all rules consistent with this chapter that may be prescribed
by the commissioner.
ENFORCEMENT
Sec. 34. [297A.91] [SEIZURE; COURT REVIEW.]
Subdivision 1. [SEIZURE OF PROPERTY USED IN ILLEGAL
TRANSPORT.] (a) If the retailer does not have a sales or use tax
permit and has been engaging in transporting personal property
into the state without payment of the tax, the commissioner of
revenue or the commissioner's agents may seize in the name of
the state any truck, automobile, or means of transportation not
owned or operated by a common carrier, used in the illegal
importation and transportation of any tangible personal property
by a retailer or the retailer's agent or employee. The
commissioner may demand the forfeiture and sale of the truck,
automobile, or other means of transportation together with the
property being transported illegally, unless the owner
establishes to the satisfaction of the commissioner or the court
that the owner had no notice or knowledge or reason to believe
that the vehicle was used or intended to be used in any such
violation.
(b) Within two days after the seizure, the person making
the seizure shall deliver an inventory of the vehicle and
property seized to the person from whom the seizure was made, if
known, and to any person known or believed to have any right,
title, interest or lien on the vehicle or property. The person
making the seizure shall also file a copy of the inventory with
the commissioner.
Subd. 2. [COURT REVIEW OF FORFEITURE.] (a) Within ten days
after the date of service of the inventory, the person from whom
the vehicle and property were seized or any person claiming an
interest in the vehicle or property may file with the
commissioner a demand for a judicial determination of the
question of whether the vehicle or property was lawfully subject
to seizure and forfeiture. The commissioner, within 30 days,
shall institute an action in the district court of the county
where the seizure was made to determine the issue of forfeiture.
(b) The action must be brought in the name of the state and
prosecuted by the county attorney or the attorney general. The
court shall hear the action without a jury and shall determine
the issues of fact and law involved. If a judgment of
forfeiture is entered and is not stayed pending an appeal, the
commissioner may have the forfeited vehicle and property sold at
public auction as provided by law.
Subd. 3. [TREATMENT OF SEIZED PROPERTY.] If a demand for
judicial determination is made and no action is commenced as
provided in this subdivision, the vehicle and property must be
released by the commissioner and redelivered to the person
entitled to it. If no demand is made, the vehicle and property
seized are considered forfeited to the state by operation of law
and may be disposed of by the commissioner as if there was a
judgment of forfeiture. The forfeiture and sale of the
automobile, truck, or other means of transportation, and of the
property being transported illegally in it, are a penalty for
the violation of this chapter. After deducting the expense of
keeping the vehicle and property, the fee for seizure, and the
costs of the sale, the commissioner shall pay liens from the
funds collected. The commissioner shall pay all liens,
according to their priority, that are established at the hearing
as being bona fide and as existing without the lienor having any
notice or knowledge that the vehicle or property was being used
or was intended to be used for or in connection with any such
violation as specified in the order of the court. The
commissioner shall pay the balance of the proceeds into the
state treasury to be credited to the general fund. The state is
not liable for any liens in excess of the proceeds from the sale
after allowable deductions. A sale under this section frees the
vehicle and property sold from all liens. The order of the
district court may be appealed as in other civil cases.
Sec. 35. [297A.92] [SECURITY.]
Subdivision 1. [AMOUNT OF SECURITY.] To ensure compliance
with the taxes imposed by this chapter, the commissioner may
require a retailer subject to this chapter to deposit security
with the commissioner. The security must be in the form and
amount the commissioner requires, but not more than twice the
retailer's estimated average liability for the period for which
the returns are required to be filed, or $10,000, whichever is
less. The amount of security may be increased or decreased by
the commissioner, subject to the limitations in this section.
Subd. 2. [AUCTIONS OF SECURITY.] The commissioner may sell
property deposited as security at public auction if necessary to
recover the amount required to be collected, including any
interest and penalties. Notice of the sale must be served upon
the person who deposited the security. It must be served
personally, or by mail as prescribed for the service of a notice
of a deficiency. After a sale any surplus above the amount due
not required as security under this section must be returned to
the person who deposited the security.
Subd. 3. [BOND.] In lieu of security, the commissioner may
require a retailer to file a bond. The bond must be issued by a
surety company authorized to transact business in this state and
approved by the commissioner of commerce as to solvency and
responsibility.
Sec. 36. [297A.93] [JEOPARDY ASSESSMENT AND COLLECTION.]
(a) If the commissioner has reason to believe that the
person required to file the return is about to leave the state
or remove the person's property from this state with the purpose
of evading the tax and penalties imposed by this chapter, or
that the collection of the tax will be jeopardized by delays
incident to other methods of collection, the commissioner may
immediately declare the person's reporting period at an end and
assess a tax on the basis of the commissioner's own knowledge or
information available. The commissioner may then demand
immediate payment of the tax, and, if payment is not immediately
made, collect the tax by any method prescribed in chapter 270.
(b) It is not a defense to an assessment made under this
section that the tax period has not terminated, that the time
otherwise allowed by law for filing a return has not expired,
that the notices otherwise required by law for making an
assessment have not been given, or that the time otherwise
allowed by law for taking or prosecuting an appeal or for paying
the tax has not expired.
DEPOSIT OF REVENUES
Sec. 37. [297A.94] [DEPOSIT OF REVENUES.]
(a) Except as provided in this section, the commissioner
shall deposit the revenues, including interest and penalties,
derived from the taxes imposed by this chapter in the state
treasury and credit them to the general fund.
(b) The commissioner shall deposit taxes in the Minnesota
agricultural and economic account in the special revenue fund if:
(1) the taxes are derived from sales and use of property
and services purchased for the construction and operation of an
agricultural resource project; and
(2) the purchase was made on or after the date on which a
conditional commitment was made for a loan guaranty for the
project under section 41A.04, subdivision 3.
The commissioner of finance shall certify to the commissioner
the date on which the project received the conditional
commitment. The amount deposited in the loan guaranty account
must be reduced by any refunds and by the costs incurred by the
department of revenue to administer and enforce the assessment
and collection of the taxes.
(c) The commissioner shall deposit the revenues, including
interest and penalties, derived from the taxes imposed on sales
and purchases included in section 297A.61, subdivision 16,
paragraphs (b) and (f), in the state treasury, and credit them
as follows:
(1) first to the general obligation special tax bond debt
service account in each fiscal year the amount required by
section 16A.661, subdivision 3, paragraph (b); and
(2) after the requirements of clause (1) have been met, the
balance to the general fund.
(d) The commissioner shall deposit the revenues, including
interest and penalties, collected under section 297A.64,
subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall
transfer to the highway user tax distribution fund an amount
equal to the excess fees collected under section 297A.64,
subdivision 5, for the previous calendar year.
LOCAL SALES AND USE TAXES
Sec. 38. [297A.95] [COORDINATION OF STATE AND LOCAL SALES
TAX RATES.]
In preparing and distributing a sales tax schedule for use
within a local jurisdiction with a separate general sales tax,
the state department of revenue shall coordinate the state and
local sales tax so that a sale of $1 reflects a tax equal to the
combination of the state and local sales tax rates. The
combined sales tax on other sales amounts must also reflect the
coordinated rather than the separate effects of the state and
local sales taxes. The schedule must be coordinated as long as
the local sales tax is in effect. If the sales tax percentage
is changed for either of the taxes, the schedule must be
adjusted to reflect the change.
Sec. 39. [297A.96] [LOCAL ADMISSIONS AND AMUSEMENT TAXES;
EXEMPTION FOR ARTS ORGANIZATIONS.]
If an event is sponsored by a nonprofit arts organization,
then amounts charged for admission to the event or to the
organization's premises are not subject to a tax imposed by a
local unit of government or imposed on sales taking place in a
single named local unit of government on sales of admissions or
amusements, under a law other than a general sales tax law.
Sec. 40. [297A.97] [OUTSTATE RETAILERS; LOCAL TAX
COLLECTION NOT REQUIRED.]
A retailer not maintaining a place of business in this
state is not required to collect taxes imposed by a political
subdivision of this state.
Sec. 41. [297A.98] [LOCAL GOVERNMENTS EXEMPT FROM LOCAL
SALES TAXES.]
Notwithstanding any other law, ordinance, or charter
provision, a political subdivision of the state is not required
to pay any general sales tax imposed by a political subdivision
of the state.
Sec. 42. [297A.99] [LOCAL SALES TAXES.]
Subdivision 1. [AUTHORIZATION; SCOPE.] (a) A political
subdivision of this state may impose a general sales tax if
permitted by special law or if the political subdivision enacted
and imposed the tax before the effective date of section
477A.016 and its predecessor provision.
(b) This section governs the imposition of a general sales
tax by the political subdivision. The provisions of this
section preempt the provisions of any special law:
(1) enacted before June 2, 1997, or
(2) enacted on or after June 2, 1997, that does not
explicitly exempt the special law provision from this section's
rules by reference.
(c) This section does not apply to or preempt a sales tax
on motor vehicles or a special excise tax on motor vehicles.
Subd. 2. [LOCAL RESOLUTION BEFORE APPLICATION FOR
AUTHORITY.] Before the governing body of a political subdivision
requests legislative approval of a special law for a local sales
tax that is administered under this section, it shall adopt a
resolution indicating its approval of the tax. The resolution
must include, at a minimum, information on the proposed tax
rate, how the revenues will be used, the total revenue that will
be raised before the tax expires, and the estimated length of
time that the tax will be in effect. This subdivision applies
to local laws enacted after June 30, 1998.
Subd. 3. [REQUIREMENTS FOR ADOPTION, USE, TERMINATION.] (a)
Imposition of a local sales tax is subject to approval by voters
of the political subdivision at a general election.
(b) The proceeds of the tax must be dedicated exclusively
to payment of the cost of a specific capital improvement which
is designated at least 90 days before the referendum on
imposition of the tax is conducted.
(c) The tax must terminate after the improvement designated
under paragraph (b) has been completed.
(d) After a sales tax imposed by a political subdivision
has expired or been terminated, the political subdivision is
prohibited from imposing a local sales tax for a period of one
year. Notwithstanding subdivision 13, this paragraph applies to
all local sales taxes in effect at the time of or imposed after
the date of enactment of this section.
Subd. 4. [TAX BASE.] (a) The tax applies to sales taxable
under this chapter that occur within the political subdivision.
(b) Taxable services are subject to a political
subdivision's sales tax, if they are performed either:
(1) within the political subdivision, or
(2) partly within and partly without the political
subdivision and more of the service is performed within the
political subdivision, based on the cost of performance.
Subd. 5. [TAX RATE.] (a) The tax rate is as specified in
the special law authorization and as imposed by the political
subdivision.
(b) The full political subdivision rate applies to any
sales that are taxed at a state rate less than or more than the
state general sales and use tax rate.
Subd. 6. [USE TAX.] A compensating use tax applies, at the
same rate as the sales tax, on the use, storage, distribution,
or consumption of tangible personal property or taxable services.
Subd. 7. [EXEMPTIONS.] (a) All goods or services that are
otherwise exempt from taxation under this chapter are exempt
from a political subdivision's tax.
(b) The gross receipts from the sale of tangible personal
property that meets the requirement of section 297A.68,
subdivision 13 or 14, are exempt, except the qualification test
applies based on the boundaries of the political subdivision
instead of the state of Minnesota.
(c) All mobile transportation equipment, and parts and
accessories attached to or to be attached to the equipment are
exempt, if purchased by a holder of a motor carrier direct pay
permit under section 297A.90.
Subd. 8. [CREDIT FOR OTHER LOCAL TAXES.] If a person paid
sales or use tax to another political subdivision of this state
on an item subject to tax under this section, a credit applies
against the tax imposed under this section. The credit equals
the tax the person paid to the other political subdivision for
the item.
Subd. 9. [ENFORCEMENT; COLLECTION; AND ADMINISTRATION.]
(a) The commissioner of revenue shall collect the taxes subject
to this section. The commissioner may collect the tax with the
state sales and use tax. All taxes under this section are
subject to the same penalties, interest, and enforcement
provisions as apply to the state sales and use tax.
(b) A request for a refund of state sales tax paid in
excess of the amount of tax legally due includes a request for a
refund of the political subdivision taxes paid on the goods or
services. The commissioner shall refund to the taxpayer the
full amount of the political subdivision taxes paid on exempt
sales or use.
(c) A political subdivision that is collecting and
administering its own sales and use tax before January 1, 1998,
may elect to be exempt from this subdivision and subdivision 11.
Subd. 10. [USE OF ZIP CODE IN DETERMINING LOCATION OF
SALE.] To determine whether to impose the local tax, the
retailer may use zip codes if the zip code area is entirely
within the political subdivision. When a zip code area is not
entirely within a political subdivision, the retailer shall not
collect the local tax if the purchaser notifies the retailer
that the purchaser's delivery address is outside of the
political subdivision, unless the retailer verifies that the
delivery address is in the political subdivision using a means
other than the zip code. Notwithstanding subdivision 13, this
subdivision applies to all local sales taxes without regard to
the date of authorization.
Subd. 11. [REVENUES; COST OF COLLECTION.] The commissioner
shall remit the proceeds of the tax, less refunds and a
proportionate share of the cost of collection, at least
quarterly, to the political subdivision. The commissioner shall
deduct from the proceeds remitted an amount that equals
(1) the direct and indirect costs of the department to
administer, audit, and collect the political subdivision's tax,
plus
(2) the political subdivision's proportionate share of the
indirect cost of administering all taxes under this section.
Subd. 12. [EFFECTIVE DATES; NOTIFICATION.] (a) A political
subdivision may impose a tax under this section starting only on
the first day of a calendar quarter. A political subdivision
may repeal a tax under this section stopping only on the last
day of a calendar quarter.
(b) The political subdivision shall notify the commissioner
of revenue at least 90 days before imposing or repealing a tax
under this section.
Subd. 13. [APPLICATION.] This section applies to all local
sales taxes that were authorized before, on, or after June 2,
1997.
Sec. 43. [297A.991] [REPORTING OF SALES TAX ON MINNESOTA
GOVERNMENTS.]
Subdivision 1. [COMMISSIONER OF REVENUE TO REPORT.] For
each fiscal year, the commissioner shall estimate the amount of
revenues derived from imposing the tax under this chapter and
chapter 297B on state agencies and political subdivisions. The
commissioner shall report this amount to the commissioner of
finance before the time for filing reports for the fiscal year
with the United States Department of Commerce.
Subd. 2. [COMMISSIONER OF FINANCE TO REPORT.] In reporting
the sales tax and sales tax on motor vehicles collections to the
United States Department of Commerce, the commissioner of
finance shall exclude the estimated amount from the sales and
motor vehicle collections. Sales tax and sales tax on motor
vehicles revenues received from political subdivisions must be
reported as intergovernmental grants or similar
intergovernmental revenue. The amount of the sales tax and
sales tax on motor vehicles paid by state agencies must be
reported as reduced state expenditures.
Sec. 44. [REVISOR'S INSTRUCTIONS.]
Subdivision 1. [CODIFICATION OF LOCAL LAWS.] In the next
edition of Minnesota Statutes, after consultation with the
chairs of the house and senate tax committees and with the
commissioner of revenue, the revisor of statutes may codify
local laws authorizing the imposition of a general sales or
general sales and use tax.
Subd. 2. [INTERNAL REFERENCES.] In the next edition of
Minnesota Statutes, the revisor of statutes shall change any
references to a repealed section in Minnesota Statutes, chapter
297A, to the appropriate recodified section.
Subd. 3. [AMENDMENTS TO REPEALED
SECTIONS.] Notwithstanding any law to the contrary, if a
provision of a section of Minnesota Statutes repealed by this
article is amended or repealed during the same legislative
session, the amendment or repealer shall supersede the
provisions of this article, and the revisor shall codify the
amendment or repealer consistent with the recodification of the
affected section by this article.
Sec. 45. [REPEALER.]
Minnesota Statutes 1998, sections 297A.01; 297A.02;
297A.022; 297A.023; 297A.03; 297A.04; 297A.041; 297A.06;
297A.065; 297A.07; 297A.09; 297A.10; 297A.11; 297A.12; 297A.13;
297A.135; 297A.14; 297A.141; 297A.15; 297A.16; 297A.17; 297A.18;
297A.21; 297A.211; 297A.213; 297A.22; 297A.23; 297A.24; 297A.25;
297A.2531; 297A.2545; 297A.255; 297A.256; 297A.2571; 297A.2572;
297A.2573; 297A.259; 297A.26; 297A.28; 297A.33, subdivision 2;
297A.44, subdivision 1; 297A.46; 297A.47; and 297A.48, are
repealed.
Sec. 46. [EFFECTIVE DATE.]
Sections 1 and 44, subdivisions 1 and 3, are effective the
day following final enactment.
Sections 2 and 3, paragraph (f), are effective for sales
taxes retained after June 30, 2001.
Section 3, paragraph (e), is effective for amounts
collected after June 30, 2001.
Sections 4 to 21 are effective for sales and purchases
occurring after June 30, 2001.
Section 22 is effective for use tax liabilities incurred
after June 30, 2001.
Section 23 is effective for gross receipts reported after
June 30, 2001.
Sections 24 and 25 are effective for offsets against taxes
after June 30, 2001.
Section 26 is effective for aircraft registered or licensed
and for sales or purchases of aircraft after June 30, 2001.
Sections 27 to 30 are effective for permits applied for,
issued, canceled, or revoked after June 30, 2001.
Section 31 is effective for selling events held after June
30, 2001.
Section 32 is effective for direct payment by purchasers
after June 30, 2001.
Section 33 is effective for registered motor carriers after
June 30, 2001.
Section 34 is effective for seizures after June 30, 2001.
Section 35 is effective for security required, security
auctions held, and security bonds required after June 30, 2001.
Section 36 is effective for assessments after June 30, 2001.
Section 37 is effective for revenues deposited after June
30, 2001.
Section 38 is effective for sales tax schedules distributed
after June 30, 2001.
Sections 39 to 42 are effective for local sales taxes
collected after June 30, 2001.
Section 43 is effective for sales taxes reported after June
30, 2001.
Sections 44, subdivision 2, and 45 are effective July 1,
2001.
ARTICLE 2
CONFORMING CHANGES
Section 1. Minnesota Statutes 1998, section 115A.69,
subdivision 6, is amended to read:
Subd. 6. [PROPERTY EXEMPT FROM TAXATION.] Any real or
personal property owned, used, or occupied by the district for
any authorized purpose is declared to be acquired, owned, used
and occupied for public and governmental purposes, and shall be
exempted from taxation by the state or any political subdivision
of the state, except to the extent that the property is subject
to the sales and use tax under chapter 297A, provided that those
properties shall be subject to special assessments levied by a
political subdivision for a local improvement in amounts
proportionate to and not exceeding the special benefit received
by the properties from the improvement. No possible use of the
properties in any manner different from their use for solid
waste management at the time shall be considered in determining
the special benefit received by the properties.
Sec. 2. Minnesota Statutes 1998, section 116A.25, is
amended to read:
116A.25 [PROPERTY EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased,
controlled, used, or occupied by a water or sewer or water and
sewer commission or board for any purpose referred to in
sections 116A.01 to 116A.26 are declared to be acquired, owned,
leased, controlled, used and occupied for public, governmental,
and municipal purposes, and shall be exempt from taxation by the
state or any political subdivision of the state, except to the
extent that the property is subject to the sales and use tax
under chapter 297A, provided that such properties shall be
subject to special assessments levied by a political subdivision
for a local improvement in amounts proportionate to and not
exceeding the special benefit received by the properties from
such improvement. No possible use of any such properties in any
manner different from their use as part of a distribution or
disposal system at the time shall be considered in determining
the special benefit received by such properties. All such
assessments shall be subject to final confirmation by the county
board or boards in whose jurisdiction the system is constructed
and whose determination of the benefits shall be conclusive upon
the political subdivision levying the assessment.
Sec. 3. Minnesota Statutes 1998, section 360.035, is
amended to read:
360.035 [EXEMPTION FROM TAXATION.]
Any properties, real or personal, acquired, owned, leased,
controlled, used, or occupied by a municipality for any of the
purposes of sections 360.011 to 360.076, are declared to be
acquired, owned, leased, controlled, used, or occupied for
public, governmental, and municipal purposes, and shall be
exempt from taxation by the state or any of its political
subdivisions, except to the extent that the property is subject
to the sales and use tax under chapter 297A. Nothing contained
in sections 360.011 to 360.076 shall be construed as exempting
properties, real or personal, leased from the municipality to a
tenant or lessee who is a private person, association, or
corporation from assessments or taxes. Leased municipal airport
property that is not located at the airport operated by the
metropolitan airports commission shall not be subject to payment
of any portion of rentals under section 272.68, subdivision 3.
Sec. 4. Minnesota Statutes 1998, section 458A.09, is
amended to read:
458A.09 [EXEMPTION FROM TAXATION.]
Notwithstanding any other provision of law to the contrary,
the properties, moneys, and other assets of the commission, and
all revenues or other income of the commission shall be exempt
from all taxation, licenses, fees, or charges of any kind
imposed by the state or by any county, municipality, political
subdivision, taxing district, or other public agency or body of
the state, except to the extent that the property is subject to
the sales and use tax under chapter 297A.
Sec. 5. Minnesota Statutes 1998, section 458A.30, is
amended to read:
458A.30 [TAX EXEMPTION.]
Notwithstanding any other provisions of law to the
contrary, the property, moneys, and other assets of the
authority, or revenues or other income of the authority, and all
bonds, certificates of indebtedness, or other obligations issued
by the authority, with the approval of the city council, and the
interest thereon, shall be exempt from all taxation, licenses,
fees, or charges of any kind imposed by the state of Minnesota,
or by any county, municipality, political subdivision, taxing
district, or other public agency or body of the state, including
but not limited to the excise tax on gasoline or special fuel
under chapter 296A, except to the extent that the property is
subject to the sales and use tax under chapter 297A.
Sec. 6. Minnesota Statutes 1998, section 458D.23, is
amended to read:
458D.23 [PROPERTY EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased,
controlled, used, or occupied by the sanitary sewer board for
any purpose under sections 458D.01 to 458D.24 are declared to be
acquired, owned, leased, controlled, used and occupied for
public, governmental, and municipal purposes, and shall be
exempt from taxation by the state or any political subdivision
of the state, except to the extent that the property is subject
to the sales and use tax under chapter 297A, provided that such
properties shall be subject to special assessments levied by a
political subdivision for a local improvement in amounts
proportionate to and not exceeding the special benefit received
by the properties from such improvement. No possible use of any
such properties in any manner different from their use as part
of a disposal system at the time shall be considered in
determining the special benefit received by such properties.
All such assessments shall be subject to final approval by the
board, whose determination of the benefits shall be conclusive
upon the political subdivision levying the assessment. All
bonds, certificates of indebtedness or other obligations of the
board, and the interest thereon, shall be exempt from taxation
by the state or any political subdivision of the state.
Sec. 7. Minnesota Statutes 1999 Supplement, section
469.101, subdivision 2, is amended to read:
Subd. 2. [ACQUIRE PROPERTY.] The economic development
authority may acquire by lease, purchase, gift, devise, or
condemnation proceedings the needed right, title, and interest
in property to create economic development districts. It shall
pay for the property out of money it receives under sections
469.090 to 469.108. It may hold and dispose of the property
subject to the limits and conditions in sections 469.090 to
469.108. The title to property acquired by condemnation or
purchase must be in fee simple, absolute. The authority may
accept an interest in property acquired in another way subject
to any condition of the grantor or donor. The condition must be
consistent with the proper use of the property under sections
469.090 to 469.108. Property acquired, owned, leased,
controlled, used, or occupied by the authority for any of the
purposes of this section is for public governmental and
municipal purposes and is exempt from taxation by the state or
by its political subdivisions, except to the extent that the
property is subject to the sales and use tax under chapter
297A. The exemption applies only while the authority holds
property for its own purpose. The exemption is subject to the
provisions of section 272.02, subdivision 39. When the property
is sold it becomes subject to taxation.
Sec. 8. Minnesota Statutes 1998, section 469.127, is
amended to read:
469.127 [TAX STATUS.]
The pedestrian skyway system, underground pedestrian
concourse, the people mover system, and publicly owned parking
structures are declared to be public property to be used for
essential public and governmental purposes. They are exempt
from all taxes and special assessments of the city, county,
state, or any political subdivision thereof, except to the
extent that the property is subject to the sales and use tax
under chapter 297A. Taxes do not include charges for utilities
and special services such as heat, water, electricity, gas,
sewage disposal, or garbage removal.
Sec. 9. Minnesota Statutes 1998, section 473.448, is
amended to read:
473.448 [TRANSIT ASSETS EXEMPT FROM TAX BUT MUST PAY
ASSESSMENTS.]
(a) Notwithstanding any other provision of law to the
contrary, the properties, moneys, and other assets of the
council used for transit operations or for special
transportation services and all revenues or other income from
the council's transit operations or special transportation
services are exempt from all taxation, licenses, or fees imposed
by the state or by any county, municipality, political
subdivision, taxing district, or other public agency or body of
the state, except to the extent that the property is subject to
the sales and use tax under chapter 297A.
(b) Notwithstanding paragraph (a), the council's transit
properties are subject to special assessments levied by a
political subdivision for a local improvement in amounts
proportionate to and not exceeding the special benefit received
by the properties from the improvement.
Sec. 10. Minnesota Statutes 1998, section 473.545, is
amended to read:
473.545 [PROPERTY EXEMPT FROM TAXATION.]
Any properties, real or personal, owned, leased,
controlled, used, or occupied by the council for any purpose
referred to in Minnesota Statutes 1984, section 473.502, are
declared to be acquired, owned, leased, controlled, used and
occupied for public, governmental, and municipal purposes, and
shall be exempt from taxation by the state or any political
subdivision of the state, except to the extent that the property
is subject to the sales and use tax under chapter 297A, provided
that such properties shall be subject to special assessments
levied by a political subdivision for a local improvement in
amounts proportionate to and not exceeding the special benefit
received by the properties from such improvement. No possible
use of any such properties in any manner different from their
use as part of the metropolitan disposal system at the time
shall be considered in determining the special benefit received
by such properties. All such assessments shall be subject to
final confirmation by the metropolitan council, whose
determination of the benefits shall be conclusive upon the
political subdivision levying the assessment.
Sec. 11. Minnesota Statutes 1998, section 473.608,
subdivision 2, is amended to read:
Subd. 2. [GETTING AIRPORT PROPERTY.] It may acquire by
lease, purchase, gift, devise, or condemnation proceedings all
necessary right, title, and interest in and to lands and
personal property required for airports and all other real or
personal property required for the purposes contemplated by
sections 473.601 to 473.679, within the metropolitan area, pay
therefor out of funds obtained as hereinafter provided, and hold
and dispose of the same, subject to the limitations and
conditions herein prescribed except that the corporation may not
acquire by any means lands or personal property for a major new
airport. Title to any such property acquired by condemnation or
purchase shall be in fee simple, absolute, unqualified in any
way, but any such real or personal property or interest therein
otherwise acquired may be so acquired or accepted subject to any
condition which may be imposed thereon by the grantor or donor
and agreed to by the corporation, not inconsistent with the
proper use of the property by the corporation for the purposes
herein provided. Any properties, real or personal, acquired,
owned, leased, controlled, used, and occupied by the corporation
for any of the purposes of sections 473.601 to 473.679, are
declared to be acquired, owned, leased, controlled, used, and
occupied for public, governmental, and municipal purposes, and
shall be exempt from taxation by the state or any of its
political subdivisions, except to the extent that the property
is subject to the sales and use tax under chapter 297A. Nothing
contained in sections 473.601 to 473.679, shall be construed as
exempting properties, real or personal, leased from the
metropolitan airports commission to a tenant or lessee who is a
private person, association, or corporation from assessments or
taxes.
Presented to the governor April 14, 2000
Signed by the governor April 18, 2000, 10:34 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes