Bill Text: MN SF2781 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Greater Minnesota business expansion sales tax exemption exclusion activities definition
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-03-27 - Withdrawn and re-referred to Taxes [SF2781 Detail]
Download: Minnesota-2013-SF2781-Introduced.html
1.2relating to economic development; modifying the greater Minnesota business
1.3expansion sales tax exemption;amending Minnesota Statutes 2013 Supplement,
1.4sections 116J.8738, subdivisions 2, 3, 4; 297A.68, subdivision 44.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 2,
1.7is amended to read:
1.8 Subd. 2. Qualified business. (a) A business is a qualified business if it satisfies the
1.9requirement of this paragraph and is not disqualified under the provisions of paragraph
1.10(b). To qualify, the business must:
1.11(1) have operated its trade or business in a city or cities in greater Minnesota for at
1.12least one year before applying under subdivision 3;
1.13(2) pay or agree to pay in the future each employee compensation, including benefits
1.14not mandated by law, that on an annualized basis equal at least 120 percent of the federal
1.15poverty level for a family of four;
1.16(3) plan and agree to expand its employment in one or more cities in greater Minnesota
1.17by the minimum number of employees required under subdivision 3, paragraph (c); and
1.18(4) have received certification from the commissioner under subdivision 3 that
1.19it is a qualified business.
1.20(b) A business is not a qualified business if it is either:
1.21(1) primarily engaged in making retail sales to purchasers who are physically present
1.22at the business's location or locations in greater Minnesota;or
1.23(2) a public utility, as defined in section336B.01 ; or
2.1(3) primarily engaged in lobbying; gambling; entertainment; professional sports;
2.2political consulting; leisure; hospitality; or professional services provided by attorneys,
2.3accountants, business consultants, physicians, or health care consultants.
2.4(c) The requirements in paragraph (a) that the business's operations and expansion
2.5be located in a city do not apply to an agricultural processing facility.
2.6EFFECTIVE DATE.This section is effective the day following final enactment.
2.7 Sec. 2. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 3, is
2.8amended to read:
2.9 Subd. 3. Certification of qualified business. (a) A business may apply to the
2.10commissioner for certification as a qualified business under this section. The commissioner
2.11shall specify the form of the application, the manner and times for applying, and the
2.12information required to be included in the application. The commissioner may impose an
2.13application fee in an amount sufficient to defray the commissioner's cost of processing
2.14certifications. A business must file a copy of its application with the chief clerical officer
2.15of the city at the same time it applies to the commissioner. For an agricultural processing
2.16facility located outside the boundaries of a city, the business must file a copy of the
2.17application with the county auditor.
2.18(b) The commissioner shall certify each business as a qualified business that:
2.19(1) satisfies the requirements of subdivision 2;
2.20(2) the commissioner determines would not expand its operations in greater
2.21Minnesota without the tax incentives available under subdivision 4; and
2.22(3) enters a business subsidy agreement with the commissioner that pledges to
2.23satisfy the minimum expansion requirements of paragraph (c) within three years or less
2.24following execution of the agreement.
2.25The commissioner must act on an application within60 90 days after its filing.
2.26Failure by the commissioner to take action within the60-day 90-day period is deemed
2.27approval of the application.
2.28(c) The following minimum expansion requirements apply, based on the number of
2.29employees of the business at locations in greater Minnesota:
2.30(1) a business that employs 50 or fewer full-time equivalent employees in greater
2.31Minnesota when the agreement is executed must increase its employment by five or more
2.32full-time equivalent employees;
2.33(2) a business that employs more than 50 but fewer than 200 full-time equivalent
2.34employees in greater Minnesota when the agreement is executed must increase the number
2.35of its full-time equivalent employees in greater Minnesota by at least ten percent; or
3.1(3) a business that employs 200 or more full-time equivalent employees in greater
3.2Minnesota when the agreement is executed must increase its employment by at least 21
3.3full-time equivalent employees (c) The business must increase the number of full-time
3.4equivalent employees in greater Minnesota from the time the business subsidy agreement
3.5is executed by two employees or ten percent, whichever is greater.
3.6(d) The city, or a county for an agricultural processing facility located outside the
3.7boundaries of a city, in which the business proposes to expand its operations may file
3.8comments supporting or opposing the application with the commissioner. The comments
3.9must be filed within 30 days after receipt by the city of the application and may include a
3.10notice of any contribution the city or county intends to make to encourage or support the
3.11business expansion, such as the use of tax increment financing, property tax abatement,
3.12additional city or county services, or other financial assistance.
3.13(e) Certification of a qualified business is effective for the12-year seven-year period
3.14beginning on the first day of the calendar month immediately followingexecution of
3.15the business subsidy agreement the date that the commissioner informs the business of
3.16the award of the benefit.
3.17EFFECTIVE DATE.This section is effective the day following final enactment.
3.18 Sec. 3. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 4, is
3.19amended to read:
3.20 Subd. 4. Available tax incentives. A qualified business is entitled to a sales tax
3.21exemption, up to $2,000,000 annually and $10,000,000 during the total period of the
3.22agreement, as provided in section297A.68, subdivision 44 , for purchases made during
3.23the period the business was certified as a qualified business under this section. The
3.24commissioner has discretion to set the maximum amounts of the annual and total sales tax
3.25exemption allowed for each qualifying business as part of the business subsidy agreement.
3.26EFFECTIVE DATE.This section is effective the day following final enactment.
3.27 Sec. 4. Minnesota Statutes 2013 Supplement, section 297A.68, subdivision 44, is
3.28amended to read:
3.29 Subd. 44. Greater Minnesota business expansions. (a) Purchases and use of
3.30tangible personal property or taxable services by a qualified business, as defined in section
3.31116J.8738
, are exempt if:
3.32(1) the business subsidy agreement provides that the exemption under this
3.33subdivision applies;
4.1(2) the property or services are primarily used or consumed at the facility in greater
4.2Minnesota identified in the business subsidy agreement; and
4.3(3) the purchase was made and delivery received during the duration of the
4.4certification of the business as a qualified business under section116J.8738 .
4.5(b) Purchase and use of construction materials and supplies used or consumed in,
4.6and equipment incorporated into, the construction of improvements to real property in
4.7greater Minnesota are exempt if the improvements after completion of construction are
4.8to be used in the conduct of the trade or business of the qualified business, as defined in
4.9section116J.8738 . This exemption applies regardless of whether the purchases are made
4.10by the business or a contractor.
4.11(c) The exemptions under this subdivision apply to a local sales and use tax.
4.12(d) The tax on purchases imposed under this subdivision must be imposed and
4.13collected as if the rate under section297A.62 applied, and then refunded in the manner
4.14provided in section297A.75 . The total amount refunded for a facility over the certification
4.15period is limited to the amount listed in the business subsidy agreement. No more than
4.16$7,000,000 may be refunded in a fiscal year for all purchases under this subdivision.
4.17Refunds must be allocated on a first-come, first-served basis. If more than $7,000,000 of
4.18eligible claims are made in a fiscal year, claims by qualified businesses carry over to the
4.19next fiscal year, and the commissioner must first allocate refunds to qualified businesses
4.20eligible for a refund in the preceding fiscal year. Any portion of the balance of funds
4.21allocated for refunds under this paragraph does not cancel and shall be carried forward to
4.22and available for refunds in subsequent fiscal years.
4.23EFFECTIVE DATE.This section is effective the day following final enactment.
1.3expansion sales tax exemption;amending Minnesota Statutes 2013 Supplement,
1.4sections 116J.8738, subdivisions 2, 3, 4; 297A.68, subdivision 44.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 2,
1.7is amended to read:
1.8 Subd. 2. Qualified business. (a) A business is a qualified business if it satisfies the
1.9requirement of this paragraph and is not disqualified under the provisions of paragraph
1.10(b). To qualify, the business must:
1.11(1) have operated its trade or business in a city or cities in greater Minnesota for at
1.12least one year before applying under subdivision 3;
1.13(2) pay or agree to pay in the future each employee compensation, including benefits
1.14not mandated by law, that on an annualized basis equal at least 120 percent of the federal
1.15poverty level for a family of four;
1.16(3) plan and agree to expand its employment in one or more cities in greater Minnesota
1.17by the minimum number of employees required under subdivision 3, paragraph (c); and
1.18(4) have received certification from the commissioner under subdivision 3 that
1.19it is a qualified business.
1.20(b) A business is not a qualified business if it is either:
1.21(1) primarily engaged in making retail sales to purchasers who are physically present
1.22at the business's location or locations in greater Minnesota;
1.23(2) a public utility, as defined in section
2.1(3) primarily engaged in lobbying; gambling; entertainment; professional sports;
2.2political consulting; leisure; hospitality; or professional services provided by attorneys,
2.3accountants, business consultants, physicians, or health care consultants.
2.4(c) The requirements in paragraph (a) that the business's operations and expansion
2.5be located in a city do not apply to an agricultural processing facility.
2.6EFFECTIVE DATE.This section is effective the day following final enactment.
2.7 Sec. 2. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 3, is
2.8amended to read:
2.9 Subd. 3. Certification of qualified business. (a) A business may apply to the
2.10commissioner for certification as a qualified business under this section. The commissioner
2.11shall specify the form of the application, the manner and times for applying, and the
2.12information required to be included in the application. The commissioner may impose an
2.13application fee in an amount sufficient to defray the commissioner's cost of processing
2.14certifications. A business must file a copy of its application with the chief clerical officer
2.15of the city at the same time it applies to the commissioner. For an agricultural processing
2.16facility located outside the boundaries of a city, the business must file a copy of the
2.17application with the county auditor.
2.18(b) The commissioner shall certify each business as a qualified business that:
2.19(1) satisfies the requirements of subdivision 2;
2.20(2) the commissioner determines would not expand its operations in greater
2.21Minnesota without the tax incentives available under subdivision 4; and
2.22(3) enters a business subsidy agreement with the commissioner that pledges to
2.23satisfy the minimum expansion requirements of paragraph (c) within three years or less
2.24following execution of the agreement.
2.25The commissioner must act on an application within
2.26Failure by the commissioner to take action within the
2.27approval of the application.
2.28
2.29
2.30
2.31
2.32
2.33
2.34
2.35
3.1
3.2
3.3
3.4equivalent employees in greater Minnesota from the time the business subsidy agreement
3.5is executed by two employees or ten percent, whichever is greater.
3.6(d) The city, or a county for an agricultural processing facility located outside the
3.7boundaries of a city, in which the business proposes to expand its operations may file
3.8comments supporting or opposing the application with the commissioner. The comments
3.9must be filed within 30 days after receipt by the city of the application and may include a
3.10notice of any contribution the city or county intends to make to encourage or support the
3.11business expansion, such as the use of tax increment financing, property tax abatement,
3.12additional city or county services, or other financial assistance.
3.13(e) Certification of a qualified business is effective for the
3.14beginning on the first day of the calendar month immediately following
3.15
3.16the award of the benefit.
3.17EFFECTIVE DATE.This section is effective the day following final enactment.
3.18 Sec. 3. Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 4, is
3.19amended to read:
3.20 Subd. 4. Available tax incentives. A qualified business is entitled to a sales tax
3.21exemption, up to $2,000,000 annually and $10,000,000 during the total period of the
3.22agreement, as provided in section
3.23the period the business was certified as a qualified business under this section. The
3.24commissioner has discretion to set the maximum amounts of the annual and total sales tax
3.25exemption allowed for each qualifying business as part of the business subsidy agreement.
3.26EFFECTIVE DATE.This section is effective the day following final enactment.
3.27 Sec. 4. Minnesota Statutes 2013 Supplement, section 297A.68, subdivision 44, is
3.28amended to read:
3.29 Subd. 44. Greater Minnesota business expansions. (a) Purchases and use of
3.30tangible personal property or taxable services by a qualified business, as defined in section
3.32(1) the business subsidy agreement provides that the exemption under this
3.33subdivision applies;
4.1(2) the property or services are primarily used or consumed at the facility in greater
4.2Minnesota identified in the business subsidy agreement; and
4.3(3) the purchase was made and delivery received during the duration of the
4.4certification of the business as a qualified business under section
4.5(b) Purchase and use of construction materials and supplies used or consumed in,
4.6and equipment incorporated into, the construction of improvements to real property in
4.7greater Minnesota are exempt if the improvements after completion of construction are
4.8to be used in the conduct of the trade or business of the qualified business, as defined in
4.9section
4.10by the business or a contractor.
4.11(c) The exemptions under this subdivision apply to a local sales and use tax.
4.12(d) The tax on purchases imposed under this subdivision must be imposed and
4.13collected as if the rate under section
4.14provided in section
4.15period is limited to the amount listed in the business subsidy agreement. No more than
4.16$7,000,000 may be refunded in a fiscal year for all purchases under this subdivision.
4.17Refunds must be allocated on a first-come, first-served basis. If more than $7,000,000 of
4.18eligible claims are made in a fiscal year, claims by qualified businesses carry over to the
4.19next fiscal year, and the commissioner must first allocate refunds to qualified businesses
4.20eligible for a refund in the preceding fiscal year. Any portion of the balance of funds
4.21allocated for refunds under this paragraph does not cancel and shall be carried forward to
4.22and available for refunds in subsequent fiscal years.
4.23EFFECTIVE DATE.This section is effective the day following final enactment.
