Bill Text: MN HF2423 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Construction contract exemption applicability modified, and exemption for sales to government clarified.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2014-02-27 - Introduction and first reading, referred to Taxes [HF2423 Detail]
Download: Minnesota-2013-HF2423-Introduced.html
1.2relating to taxation; sales and use; modifying the applicability of the exemption
1.3for certain construction contracts; clarifying the exemption for sales to
1.4government;amending Minnesota Statutes 2012, section 297A.71, subdivision 1,
1.5by adding a subdivision; Minnesota Statutes 2013 Supplement, section 297A.70,
1.6subdivision 2; repealing Minnesota Rules, part 8130.1200, subpart 3.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2013 Supplement, section 297A.70, subdivision 2,
1.9is amended to read:
1.10 Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
1.11to, on behalf of, or for use by the following governments and political subdivisions, or
1.12to, on behalf of, or for use by the listed agencies or instrumentalities of governments and
1.13political subdivisions, are exempt:
1.14(1) the United States and its agencies and instrumentalities;
1.15(2) school districts, local governments, the University of Minnesota, state universities,
1.16community colleges, technical colleges, state academies, the Perpich Minnesota Center for
1.17Arts Education, and an instrumentality of a political subdivision that is accredited as an
1.18optional/special function school by the North Central Association of Colleges and Schools;
1.19(3) hospitals and nursing homes owned and operated by political subdivisions of
1.20the state of tangible personal property and taxable services used at or by hospitals and
1.21nursing homes;
1.22(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
1.23operations provided for in section473.4051 ;
1.24(5) other states or political subdivisions of other states, if the sale would be exempt
1.25from taxation if it occurred in that state; and
2.1(6) public libraries, public library systems, multicounty, multitype library systems
2.2as defined in section134.001 , county law libraries under chapter 134A, state agency
2.3libraries, the state library under section480.09 , and the Legislative Reference Library.
2.4(b) This exemption does not apply to the sales of the following products and services:
2.5(1) building, construction, or reconstruction materials purchased by a contractor
2.6or a subcontractor as a part of a lump-sum contract or similar type of contract with a
2.7guaranteed maximum price covering both labor and materials for use in the construction,
2.8alteration, or repair of a building or facility;
2.9(2) (1) construction materials purchased by tax exempt entities or their contractors
2.10to be used in constructing buildings or facilities which will not be used principally by
2.11the tax exempt entities;
2.12(3) (2) the leasing of a motor vehicle as defined in section
297B.01, subdivision 11 ,
2.13except for leases entered into by the United States or its agencies or instrumentalities;
2.14(4) (3) lodging as defined under section
297A.61, subdivision 3 , paragraph (g), clause
2.15(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
2.16297A.67, subdivision 2
, except for lodging, prepared food, candy, soft drinks, and alcoholic
2.17beverages purchased directly by the United States or its agencies or instrumentalities; or
2.18(5) (4) goods or services purchased by a local government as inputs to goods and
2.19services that are generally provided by a private business and the purchases would be
2.20taxable if made by a private business engaged in the same activity.
2.21(c) As used in this subdivision, "school districts" means public school entities and
2.22districts of every kind and nature organized under the laws of the state of Minnesota, and
2.23any instrumentality of a school district, as defined in section471.59 .
2.24(d) As used in this subdivision, "local governments" means cities, counties, and
2.25townships.
2.26(e) As used in this subdivision, "goods or services generally provided by a private
2.27business" include, but are not limited to, goods or services provided by liquor stores, gas
2.28and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
2.29and laundromats. "Goods or services generally provided by a private business" do not
2.30include housing services, sewer and water services, wastewater treatment, ambulance and
2.31other public safety services, correctional services, chore or homemaking services provided
2.32to elderly or disabled individuals, or road and street maintenance or lighting.
2.33EFFECTIVE DATE.This section is effective for sales and purchases made after
2.34June 30, 2014.
2.35 Sec. 2. Minnesota Statutes 2012, section 297A.71, subdivision 1, is amended to read:
3.1 Subdivision 1. Scope. (a) The gross receipts from the sale of, and storage,
3.2distribution, use, or consumption of the tangible personal property contained in this
3.3section are specifically exempted from the taxes imposed by this chapter.
3.4(b) Building materials, equipment, and supplies and other items exempt under
3.5this section are exempt regardless of whether purchased by the owner or a contractor,
3.6subcontractor, or builder. Unless otherwise provided in this section, the exemption
3.7on qualifying purchases may be claimed through the use of an exemption certificate
3.8prescribed by the commissioner as defined in section 297A.72, or by applying for a refund
3.9under section 297A.75.
3.10EFFECTIVE DATE.This section is effective for sales and purchases made after
3.11June 30, 2014.
3.12 Sec. 3. Minnesota Statutes 2012, section 297A.71, is amended by adding a subdivision
3.13to read:
3.14 Subd. 49. Construction materials; local government exemption. Building,
3.15construction, or reconstruction materials used in constructing buildings or facilities used
3.16principally by a school district or local government as defined under section 297A.70, and
3.17materials used in the construction, reconstruction, repair, maintenance, or improvement of
3.18public infrastructure of any kind, including, but not limited to, roads, bridges, culverts,
3.19drinking water facilities, and wastewater facilities, are exempt.
3.20EFFECTIVE DATE.This section is effective for sales and purchases made after
3.21June 30, 2014.
3.22 Sec. 4. REPEALER.
3.23Minnesota Rules, part 8130.1200, subpart 3, is repealed.
3.24EFFECTIVE DATE.This section is effective for sales and purchases made after
3.25June 30, 2014.
1.3for certain construction contracts; clarifying the exemption for sales to
1.4government;amending Minnesota Statutes 2012, section 297A.71, subdivision 1,
1.5by adding a subdivision; Minnesota Statutes 2013 Supplement, section 297A.70,
1.6subdivision 2; repealing Minnesota Rules, part 8130.1200, subpart 3.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2013 Supplement, section 297A.70, subdivision 2,
1.9is amended to read:
1.10 Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
1.11to, on behalf of, or for use by the following governments and political subdivisions, or
1.12to, on behalf of, or for use by the listed agencies or instrumentalities of governments and
1.13political subdivisions, are exempt:
1.14(1) the United States and its agencies and instrumentalities;
1.15(2) school districts, local governments, the University of Minnesota, state universities,
1.16community colleges, technical colleges, state academies, the Perpich Minnesota Center for
1.17Arts Education, and an instrumentality of a political subdivision that is accredited as an
1.18optional/special function school by the North Central Association of Colleges and Schools;
1.19(3) hospitals and nursing homes owned and operated by political subdivisions of
1.20the state of tangible personal property and taxable services used at or by hospitals and
1.21nursing homes;
1.22(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
1.23operations provided for in section
1.24(5) other states or political subdivisions of other states, if the sale would be exempt
1.25from taxation if it occurred in that state; and
2.1(6) public libraries, public library systems, multicounty, multitype library systems
2.2as defined in section
2.3libraries, the state library under section
2.4(b) This exemption does not apply to the sales of the following products and services:
2.5
2.6
2.7
2.8
2.9
2.10to be used in constructing buildings or facilities which will not be used principally by
2.11the tax exempt entities;
2.12
2.13except for leases entered into by the United States or its agencies or instrumentalities;
2.14
2.15(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
2.17beverages purchased directly by the United States or its agencies or instrumentalities; or
2.18
2.19services that are generally provided by a private business and the purchases would be
2.20taxable if made by a private business engaged in the same activity.
2.21(c) As used in this subdivision, "school districts" means public school entities and
2.22districts of every kind and nature organized under the laws of the state of Minnesota, and
2.23any instrumentality of a school district, as defined in section
2.24(d) As used in this subdivision, "local governments" means cities, counties, and
2.25townships.
2.26(e) As used in this subdivision, "goods or services generally provided by a private
2.27business" include, but are not limited to, goods or services provided by liquor stores, gas
2.28and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
2.29and laundromats. "Goods or services generally provided by a private business" do not
2.30include housing services, sewer and water services, wastewater treatment, ambulance and
2.31other public safety services, correctional services, chore or homemaking services provided
2.32to elderly or disabled individuals, or road and street maintenance or lighting.
2.33EFFECTIVE DATE.This section is effective for sales and purchases made after
2.34June 30, 2014.
2.35 Sec. 2. Minnesota Statutes 2012, section 297A.71, subdivision 1, is amended to read:
3.1 Subdivision 1. Scope. (a) The gross receipts from the sale of, and storage,
3.2distribution, use, or consumption of the tangible personal property contained in this
3.3section are specifically exempted from the taxes imposed by this chapter.
3.4(b) Building materials, equipment, and supplies and other items exempt under
3.5this section are exempt regardless of whether purchased by the owner or a contractor,
3.6subcontractor, or builder. Unless otherwise provided in this section, the exemption
3.7on qualifying purchases may be claimed through the use of an exemption certificate
3.8prescribed by the commissioner as defined in section 297A.72, or by applying for a refund
3.9under section 297A.75.
3.10EFFECTIVE DATE.This section is effective for sales and purchases made after
3.11June 30, 2014.
3.12 Sec. 3. Minnesota Statutes 2012, section 297A.71, is amended by adding a subdivision
3.13to read:
3.14 Subd. 49. Construction materials; local government exemption. Building,
3.15construction, or reconstruction materials used in constructing buildings or facilities used
3.16principally by a school district or local government as defined under section 297A.70, and
3.17materials used in the construction, reconstruction, repair, maintenance, or improvement of
3.18public infrastructure of any kind, including, but not limited to, roads, bridges, culverts,
3.19drinking water facilities, and wastewater facilities, are exempt.
3.20EFFECTIVE DATE.This section is effective for sales and purchases made after
3.21June 30, 2014.
3.22 Sec. 4. REPEALER.
3.23Minnesota Rules, part 8130.1200, subpart 3, is repealed.
3.24EFFECTIVE DATE.This section is effective for sales and purchases made after
3.25June 30, 2014.
