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; reducing the general rate of the 1.3 sales and use tax and the sales tax on motor vehicles; 1.4 exempting sales to political subdivisions of a state; 1.5 exempting sales of lottery tickets from the sales tax; 1.6 amending Minnesota Statutes 1998, sections 297A.02, 1.7 subdivision 1; 297A.25, subdivision 11; 297A.259; 1.8 297A.47; 349A.01, subdivision 7; and 349A.10, 1.9 subdivision 7. 1.10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.11 Section 1. Minnesota Statutes 1998, section 297A.02, 1.12 subdivision 1, is amended to read: 1.13 Subdivision 1. [GENERALLY.] Except as otherwise provided 1.14 in this chapter, there is imposed an excise tax of6.5six 1.15 percent of the gross receipts from sales at retail made by any 1.16 person in this state. 1.17 Sec. 2. Minnesota Statutes 1998, section 297A.25, 1.18 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 Lola and Rudy Perpich Minnesota center for arts education, an2.4instrumentality of a political subdivision that is accredited as2.5an optional/special function school by the North Central2.6Association of Colleges and Schools, 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.259, is 4.7 amended to read: 4.8 297A.259 [LOTTERY TICKETS;IN LIEU TAXEXEMPTION.] 4.9 Sales of state lottery tickets are exempt from the tax 4.10 imposed under section 297A.02.The state lottery must on or4.11before the 20th day of each month transmit to the commissioner4.12of revenue an amount equal to the gross receipts from the sale4.13of lottery tickets for the previous month multiplied by the4.14combined tax rate under sections 297A.02, subdivision 1, and4.15297A.021, subdivision 1. The resulting payment is in lieu of4.16the sales tax that otherwise would be imposed by this chapter.4.17The commissioner shall deposit the money transmitted as provided4.18by section 297A.44 and the money must be treated as other4.19proceeds of the sales tax. Gross receipts for purposes of this4.20section mean the proceeds of the sale of tickets before4.21deduction of a commission or other compensation paid to the4.22vendor or retailer for selling tickets.4.23 Sec. 4. Minnesota Statutes 1998, section 297A.47, is 4.24 amended to read: 4.25 297A.47 [REPORTING OF SALES TAX ON MINNESOTA GOVERNMENTS.] 4.26 The commissioner shall estimate the amount of revenues 4.27 derived from imposing the tax under this chapter and chapter 4.28 297B on state agencies and political subdivisions for each 4.29 fiscal year and shall report this amount to the commissioner of 4.30 finance before the time for filing reports for the fiscal year 4.31 with the United States Department of Commerce. The commissioner 4.32 of finance in reporting the sales tax and sales tax on motor 4.33 vehicles collections to the United States Department of Commerce 4.34 shall exclude this amount from the sales and motor vehicle 4.35 collections.Sales tax andSales tax on motor vehicles revenues 4.36 received from political subdivisions must be reported as 5.1 intergovernmental grants or similar intergovernmental revenue. 5.2 The amount of the sales tax and sales tax on motor vehicles paid 5.3 by state agencies must be reported as reduced state expenditures. 5.4 Sec. 5. Minnesota Statutes 1998, section 349A.01, 5.5 subdivision 7, is amended to read: 5.6 Subd. 7. [GROSS RECEIPTS.] "Gross receipts" means all 5.7 money received from the sale of lottery ticketsless amounts5.8transmitted to the commissioner of revenue under section5.9297A.259. 5.10 Sec. 6. Minnesota Statutes 1998, section 349A.10, 5.11 subdivision 7, is amended to read: 5.12 Subd. 7. [TRANSFER OF CASH BALANCES.] (a) A lottery cash 5.13 flow account is created in the special revenue fund in the state 5.14 treasury. At the end of each week the director shall deposit in 5.15 the lottery cash flow account from the lottery fund and the 5.16 lottery prize fund all amounts that the director determines are 5.17 not required for immediate use in the lottery fund or the 5.18 lottery prize fund. The commissioner of finance shall credit to 5.19 the lottery cash flow account interest on all money deposited in 5.20 the lottery cash flow account under this subdivision. 5.21 (b) The director shall notify the commissioner of finance 5.22 whenever the director determines that money transferred under 5.23 paragraph (a) is required for the immediate use of the lottery 5.24 fund or the lottery prize fund. Upon receiving the notification 5.25 the commissioner shall transfer the amount identified in the 5.26 notification. Amounts necessary to make immediate payment for 5.27 expenses or prizes from the lottery fund or the prize fund are 5.28 appropriated from the lottery cash flow account to the director. 5.29 (c) The director shall notify the commissioner of finance 5.30 30 days after each month as to the amount of the net proceeds 5.31 that must be transferred under subdivision 5,and the director5.32shall notify the commissioner of finance 20 days after each5.33month as to the amount that must be transferred under section5.34297A.259,and as necessary the director shall notify the 5.35 commissioner of other amounts required by law to be transferred. 5.36 Sec. 7. [EFFECTIVE DATE.] 6.1 Sections 1 to 6 are effective for sales and purchases 6.2 occurring after June 30, 1999.