as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; exempting sales to political 1.3 subdivisions of the state from the sales tax; 1.4 requiring local governments to reduce levies; amending 1.5 Minnesota Statutes 1998, section 297A.47; Minnesota 1.6 Statutes 1999 Supplement, section 297A.25, subdivision 1.7 11; proposing coding for new law in Minnesota 1.8 Statutes, chapter 275. 1.9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.10 Section 1. [275.75] [MANDATORY REDUCTION OF LEVIES.] 1.11 Each year, when determining the amount of its levy, each 1.12 local government unit must make a reasonable estimate of the 1.13 amount of money that it will save due to enactment of section 2 1.14 during the year in which the taxes will be payable and reduce 1.15 the amount that it would have levied in the absence of section 2 1.16 by that amount. 1.17 Sec. 2. Minnesota Statutes 1999 Supplement, section 1.18 297A.25, subdivision 11, is amended to read: 1.19 Subd. 11. [SALES TO GOVERNMENT.] The gross receipts from 1.20 all sales, including sales in which title is retained by a 1.21 seller or a vendor or is assigned to a third party under an 1.22 installment sale or lease purchase agreement under section 1.23 465.71, of tangible personal property to, and all storage, use 1.24 or consumption of such property by,the following governmental 1.25 entities are exempt: 1.26 (1) the United States and its agencies and 1.27 instrumentalities,; 2.1 (2) the University of Minnesota, state universities, 2.2 community colleges, technical colleges, state academies, and the 2.3 Perpich center for arts education, an instrumentality of a2.4political subdivision that is accredited as an optional/special2.5function school by the North Central Association of Colleges and2.6Schools, school districts,; 2.7 (3) public libraries, public library systems, multicounty, 2.8 multitype library systems as defined in section 134.001,county2.9law libraries under chapter 134A,the state library under 2.10 section 480.09, and the legislative reference libraryare2.11exempt; and 2.12 (4) political subdivisions of a state and their agencies 2.13 and instrumentalities. 2.14As used in this subdivision, "school districts" means2.15public school entities and districts of every kind and nature2.16organized under the laws of the state of Minnesota, including,2.17without limitation, school districts, intermediate school2.18districts, education districts, service cooperatives, secondary2.19vocational cooperative centers, special education cooperatives,2.20joint purchasing cooperatives, telecommunication cooperatives,2.21regional management information centers, and any instrumentality2.22of a school district, as defined in section 471.59.2.23 Sales exempted by this subdivision include sales under 2.24 section 297A.01, subdivision 3, paragraph (f). 2.25Sales to hospitals and nursing homes owned and operated by2.26political subdivisions of the state are exempt under this2.27subdivision.2.28Sales of supplies and equipment used in the operation of an2.29ambulance service owned and operated by a political subdivision2.30of the state are exempt under this subdivision provided that the2.31supplies and equipment are used in the course of providing2.32medical care. Sales to a political subdivision of repair and2.33replacement parts for emergency rescue vehicles and fire trucks2.34and apparatus are exempt under this subdivision.2.35Sales to a political subdivision of machinery and2.36equipment, except for motor vehicles, used directly for mixed3.1municipal solid waste management services at a solid waste3.2disposal facility as defined in section 115A.03, subdivision 10,3.3are exempt under this subdivision.3.4Sales to political subdivisions of chore and homemaking3.5services to be provided to elderly or disabled individuals are3.6exempt.3.7Sales to a town of gravel and of machinery, equipment, and3.8accessories, except motor vehicles, used exclusively for road3.9and bridge maintenance, and leases of motor vehicles exempt from3.10tax under section 297B.03, clause (10), are exempt.3.11 Sales of telephone services to the department of 3.12 administration that are used to provide telecommunications 3.13 services through the intertechnologies revolving fund are exempt 3.14 under this subdivision. 3.15 This exemption shall not apply to building, construction or 3.16 reconstruction materials purchased by a contractor or a 3.17 subcontractor as a part of a lump-sum contract or similar type 3.18 of contract with a guaranteed maximum price covering both labor 3.19 and materials for use in the construction, alteration, or repair 3.20 of a building or facility. This exemption does not apply to 3.21 construction materials purchased by tax exempt entities or their 3.22 contractors to be used in constructing buildings or facilities 3.23 which will not be used principally by the tax exempt entities. 3.24 This exemption does not apply to the leasing of a motor 3.25 vehicle as defined in section 297B.01, subdivision 5, except for: 3.26 (1) leases entered into by the United States or its 3.27 agencies or instrumentalities; and 3.28 (2) leases entered into by a political subdivision of motor 3.29 vehicles exempt from tax under chapter 297B. 3.30The tax imposed on sales to political subdivisions of the3.31state under this section applies to all political subdivisions3.32other than those explicitly exempted under this subdivision,3.33notwithstanding section 115A.69, subdivision 6, 116A.25,3.34360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2,3.35469.127, 473.448, 473.545, or 473.608 or any other law to the3.36contrary enacted before 1992.4.1 Sales exempted by this subdivision include sales made to 4.2 other statesor political subdivisions of other states,if the 4.3 sale would be exempt from taxation if it occurred in that state, 4.4 but do not include sales under section 297A.01, subdivision 3, 4.5 paragraphs (c) and (e). 4.6 Sec. 3. Minnesota Statutes 1998, section 297A.47, is 4.7 amended to read: 4.8 297A.47 [REPORTING OF SALES TAX ON MINNESOTA GOVERNMENTS.] 4.9 The commissioner shall estimate the amount of revenues 4.10 derived from imposing the tax under this chapter and chapter 4.11 297B on state agencies and political subdivisions for each 4.12 fiscal year and shall report this amount to the commissioner of 4.13 finance before the time for filing reports for the fiscal year 4.14 with the United States Department of Commerce. The commissioner 4.15 of finance in reporting the sales tax and sales tax on motor 4.16 vehicles collections to the United States Department of Commerce 4.17 shall exclude this amount from the sales and motor vehicle 4.18 collections.Sales tax andSales tax on motor vehiclesrevenues4.19 revenue received from political subdivisions must be reported as 4.20 intergovernmental grants or similar intergovernmental revenue. 4.21 The amount of the sales tax and sales tax on motor vehicles paid 4.22 by state agencies must be reported as reduced state expenditures. 4.23 Sec. 4. [EFFECTIVE DATE.] 4.24 Section 1 is effective for taxes levied in 2000, payable in 4.25 2001, and thereafter. Sections 2 and 3 are effective for sales 4.26 occurring after December 31, 2000.