Bill Text: MN SF1549 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Motor vehicle repair paint and supplies retail sales by motor vehicle repair or body shop sales tax imposition
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-01-26 - Referred to Taxes [SF1549 Detail]
Download: Minnesota-2011-SF1549-Introduced.html
1.2relating to taxation; sales and use; modifying definitions; providing business
1.3exemption for motor vehicle repair paint and supplies;amending Minnesota
1.4Statutes 2010, sections 297A.61, subdivision 4, by adding a subdivision;
1.5297A.68, by adding a subdivision.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 4, is amended to
1.8read:
1.9 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
1.10purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
1.11course of business as defined in subdivision 21.
1.12 (b) A sale of property used by the owner only by leasing it to others or by holding it
1.13in an effort to lease it, and put to no use by the owner other than resale after the lease or
1.14effort to lease, is a sale of property for resale.
1.15 (c) A sale of master computer software that is purchased and used to make copies for
1.16sale or lease is a sale of property for resale.
1.17 (d) A sale of building materials, supplies, and equipment to owners, contractors,
1.18subcontractors, or builders for the erection of buildings or the alteration, repair, or
1.19improvement of real property is a retail sale in whatever quantity sold, whether the sale is
1.20for purposes of resale in the form of real property or otherwise.
1.21 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
1.22for installation of the floor covering is a retail sale and not a sale for resale since a sale
1.23of floor covering which includes installation is a contract for the improvement of real
1.24property.
2.1 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
2.2for installation of the items is a retail sale and not a sale for resale since a sale of
2.3shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
2.4the improvement of real property.
2.5 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
2.6is not considered a sale of property for resale.
2.7 (h) A sale of tangible personal property utilized or employed in the furnishing or
2.8providing of services under subdivision 3, paragraph (g), clause (1), including, but not
2.9limited to, property given as promotional items, is a retail sale and is not considered a
2.10sale of property for resale.
2.11 (i) A sale of tangible personal property used in conducting lawful gambling under
2.12chapter 349 or the State Lottery under chapter 349A, including, but not limited to,
2.13property given as promotional items, is a retail sale and is not considered a sale of
2.14property for resale.
2.15 (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
2.16dispense goods or services, including, but not limited to, coin-operated devices, is a retail
2.17sale and is not considered a sale of property for resale.
2.18 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
2.19payment becomes due under the terms of the agreement or the trade practices of the
2.20lessor or (2) in the case of a lease of a motor vehicle, as defined in section297B.01,
2.21subdivision 11 , but excluding vehicles with a manufacturer's gross vehicle weight rating
2.22greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
2.23the lease is executed.
2.24 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
2.25title or possession of the tangible personal property.
2.26 (m) A sale of a bundled transaction in which one or more of the products included
2.27in the bundle is a taxable product is a retail sale, except that if one of the products
2.28is a telecommunication service, ancillary service, Internet access, or audio or video
2.29programming service, and the seller has maintained books and records identifying through
2.30reasonable and verifiable standards the portions of the price that are attributable to the
2.31distinct and separately identifiable products, then the products are not considered part of a
2.32bundled transaction. For purposes of this paragraph:
2.33 (1) the books and records maintained by the seller must be maintained in the regular
2.34course of business, and do not include books and records created and maintained by the
2.35seller primarily for tax purposes;
3.1 (2) books and records maintained in the regular course of business include, but are
3.2not limited to, financial statements, general ledgers, invoicing and billing systems and
3.3reports, and reports for regulatory tariffs and other regulatory matters; and
3.4 (3) books and records are maintained primarily for tax purposes when the books
3.5and records identify taxable and nontaxable portions of the price, but the seller maintains
3.6other books and records that identify different prices attributable to the distinct products
3.7included in the same bundled transaction.
3.8(n) A sale of motor vehicle repair paint and supplies by a motor vehicle repair
3.9or body shop business is a retail sale and the sales tax is imposed on the gross receipts
3.10from the retail sale of the paint and supplies. The motor vehicle repair or body shop may
3.11multiply the number of labor hours by a rate of consideration for the paint and supplies
3.12used in the repair of the motor vehicle in order to calculate the sales price of the paint and
3.13supplies. If this method does not fairly reflect the taxable amount, the taxpayer may
3.14petition the commissioner for the use of another method, if that method fairly reflects the
3.15gross receipts from the retail sale of the paint and supplies that become part of a repaired
3.16motor vehicle or are consumed in repairing motor vehicles. This paragraph does not apply
3.17to wholesale transactions at an auto auction facility.
3.18EFFECTIVE DATE.This section is effective for sales and purchases made after
3.19June 30, 2012.
3.20 Sec. 2. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision
3.21to read:
3.22 Subd. 49. Motor vehicle repair paint and supplies. "Motor vehicle repair paint"
3.23includes primer, body paint, clear coat, and paint thinner used to paint motor vehicles, as
3.24defined in section 297B.01. "Motor vehicle repair supplies" are items that become a part
3.25of a repaired motor vehicle or are consumed in repairing the motor vehicle at retail, and
3.26include abrasives, battery water, body filler or putty, bolts and nuts, brake fluid, buffing
3.27pads, chamois, cleaning compounds, degreasing compounds, glaze, grease, grinding discs,
3.28hydraulic jack oil, lubricants, masking tape, oxygen and acetylene, polishes, rags, razor
3.29blades, sandpaper, sanding discs, scuff pads, sealer, solder, solvents, striping tape, tack
3.30cloth, thinner, waxes, and welding rods. Motor vehicle repair supplies do not include
3.31items that are not used directly on the motor vehicle, such as floor dry, or cleaning
3.32compounds and rags that are used to clean tools and equipment or the shop and are not
3.33used to clean the motor vehicle.
4.1EFFECTIVE DATE.This section is effective for sales and purchases made after
4.2June 30, 2012.
4.3 Sec. 3. Minnesota Statutes 2010, section 297A.68, is amended by adding a subdivision
4.4to read:
4.5 Subd. 44. Motor vehicle repair paint and supplies. Paint and supplies, as
4.6defined in section 297A.61, subdivision 49, that are purchased by a motor vehicle repair
4.7or body shop business in providing repair services on motor vehicles, as defined in
4.8section 297B.01, at retail and become part of a repaired motor vehicle or are consumed
4.9in repairing a motor vehicle are exempt.
4.10EFFECTIVE DATE.This section is effective for sales and purchases made after
4.11June 30, 2012.
1.3exemption for motor vehicle repair paint and supplies;amending Minnesota
1.4Statutes 2010, sections 297A.61, subdivision 4, by adding a subdivision;
1.5297A.68, by adding a subdivision.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 4, is amended to
1.8read:
1.9 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
1.10purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
1.11course of business as defined in subdivision 21.
1.12 (b) A sale of property used by the owner only by leasing it to others or by holding it
1.13in an effort to lease it, and put to no use by the owner other than resale after the lease or
1.14effort to lease, is a sale of property for resale.
1.15 (c) A sale of master computer software that is purchased and used to make copies for
1.16sale or lease is a sale of property for resale.
1.17 (d) A sale of building materials, supplies, and equipment to owners, contractors,
1.18subcontractors, or builders for the erection of buildings or the alteration, repair, or
1.19improvement of real property is a retail sale in whatever quantity sold, whether the sale is
1.20for purposes of resale in the form of real property or otherwise.
1.21 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
1.22for installation of the floor covering is a retail sale and not a sale for resale since a sale
1.23of floor covering which includes installation is a contract for the improvement of real
1.24property.
2.1 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
2.2for installation of the items is a retail sale and not a sale for resale since a sale of
2.3shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
2.4the improvement of real property.
2.5 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
2.6is not considered a sale of property for resale.
2.7 (h) A sale of tangible personal property utilized or employed in the furnishing or
2.8providing of services under subdivision 3, paragraph (g), clause (1), including, but not
2.9limited to, property given as promotional items, is a retail sale and is not considered a
2.10sale of property for resale.
2.11 (i) A sale of tangible personal property used in conducting lawful gambling under
2.12chapter 349 or the State Lottery under chapter 349A, including, but not limited to,
2.13property given as promotional items, is a retail sale and is not considered a sale of
2.14property for resale.
2.15 (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
2.16dispense goods or services, including, but not limited to, coin-operated devices, is a retail
2.17sale and is not considered a sale of property for resale.
2.18 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
2.19payment becomes due under the terms of the agreement or the trade practices of the
2.20lessor or (2) in the case of a lease of a motor vehicle, as defined in section
2.21subdivision 11
2.22greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
2.23the lease is executed.
2.24 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
2.25title or possession of the tangible personal property.
2.26 (m) A sale of a bundled transaction in which one or more of the products included
2.27in the bundle is a taxable product is a retail sale, except that if one of the products
2.28is a telecommunication service, ancillary service, Internet access, or audio or video
2.29programming service, and the seller has maintained books and records identifying through
2.30reasonable and verifiable standards the portions of the price that are attributable to the
2.31distinct and separately identifiable products, then the products are not considered part of a
2.32bundled transaction. For purposes of this paragraph:
2.33 (1) the books and records maintained by the seller must be maintained in the regular
2.34course of business, and do not include books and records created and maintained by the
2.35seller primarily for tax purposes;
3.1 (2) books and records maintained in the regular course of business include, but are
3.2not limited to, financial statements, general ledgers, invoicing and billing systems and
3.3reports, and reports for regulatory tariffs and other regulatory matters; and
3.4 (3) books and records are maintained primarily for tax purposes when the books
3.5and records identify taxable and nontaxable portions of the price, but the seller maintains
3.6other books and records that identify different prices attributable to the distinct products
3.7included in the same bundled transaction.
3.8(n) A sale of motor vehicle repair paint and supplies by a motor vehicle repair
3.9or body shop business is a retail sale and the sales tax is imposed on the gross receipts
3.10from the retail sale of the paint and supplies. The motor vehicle repair or body shop may
3.11multiply the number of labor hours by a rate of consideration for the paint and supplies
3.12used in the repair of the motor vehicle in order to calculate the sales price of the paint and
3.13supplies. If this method does not fairly reflect the taxable amount, the taxpayer may
3.14petition the commissioner for the use of another method, if that method fairly reflects the
3.15gross receipts from the retail sale of the paint and supplies that become part of a repaired
3.16motor vehicle or are consumed in repairing motor vehicles. This paragraph does not apply
3.17to wholesale transactions at an auto auction facility.
3.18EFFECTIVE DATE.This section is effective for sales and purchases made after
3.19June 30, 2012.
3.20 Sec. 2. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision
3.21to read:
3.22 Subd. 49. Motor vehicle repair paint and supplies. "Motor vehicle repair paint"
3.23includes primer, body paint, clear coat, and paint thinner used to paint motor vehicles, as
3.24defined in section 297B.01. "Motor vehicle repair supplies" are items that become a part
3.25of a repaired motor vehicle or are consumed in repairing the motor vehicle at retail, and
3.26include abrasives, battery water, body filler or putty, bolts and nuts, brake fluid, buffing
3.27pads, chamois, cleaning compounds, degreasing compounds, glaze, grease, grinding discs,
3.28hydraulic jack oil, lubricants, masking tape, oxygen and acetylene, polishes, rags, razor
3.29blades, sandpaper, sanding discs, scuff pads, sealer, solder, solvents, striping tape, tack
3.30cloth, thinner, waxes, and welding rods. Motor vehicle repair supplies do not include
3.31items that are not used directly on the motor vehicle, such as floor dry, or cleaning
3.32compounds and rags that are used to clean tools and equipment or the shop and are not
3.33used to clean the motor vehicle.
4.1EFFECTIVE DATE.This section is effective for sales and purchases made after
4.2June 30, 2012.
4.3 Sec. 3. Minnesota Statutes 2010, section 297A.68, is amended by adding a subdivision
4.4to read:
4.5 Subd. 44. Motor vehicle repair paint and supplies. Paint and supplies, as
4.6defined in section 297A.61, subdivision 49, that are purchased by a motor vehicle repair
4.7or body shop business in providing repair services on motor vehicles, as defined in
4.8section 297B.01, at retail and become part of a repaired motor vehicle or are consumed
4.9in repairing a motor vehicle are exempt.
4.10EFFECTIVE DATE.This section is effective for sales and purchases made after
4.11June 30, 2012.
