Bill Text: MN SF326 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Motor vehicle paint and materials sales tax imposition clarification
Sponsorship: N/A
Status: (Introduced - Dead) 2013-02-07 - Referred to Taxes [SF326 Detail]
Download: Minnesota-2013-SF326-Introduced.html
1.2relating to taxation; clarifying the imposition of sales tax on motor vehicle paint
1.3and materials;amending Minnesota Statutes 2012, section 297A.61, subdivision
1.44, by adding a subdivision.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
1.7 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
1.8purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
1.9course of business as defined in subdivision 21.
1.10 (b) A sale of property used by the owner only by leasing it to others or by holding it
1.11in an effort to lease it, and put to no use by the owner other than resale after the lease or
1.12effort to lease, is a sale of property for resale.
1.13 (c) A sale of master computer software that is purchased and used to make copies for
1.14sale or lease is a sale of property for resale.
1.15 (d) A sale of building materials, supplies, and equipment to owners, contractors,
1.16subcontractors, or builders for the erection of buildings or the alteration, repair, or
1.17improvement of real property is a retail sale in whatever quantity sold, whether the sale is
1.18for purposes of resale in the form of real property or otherwise.
1.19 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
1.20for installation of the floor covering is a retail sale and not a sale for resale since a sale of
1.21floor covering which includes installation is a contract for the improvement of real property.
1.22 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
1.23for installation of the items is a retail sale and not a sale for resale since a sale of
2.1shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
2.2the improvement of real property.
2.3 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
2.4is not considered a sale of property for resale.
2.5 (h) A sale of tangible personal property utilized or employed in the furnishing or
2.6providing of services under subdivision 3, paragraph (g), clause (1), including, but not
2.7limited to, property given as promotional items, is a retail sale and is not considered a
2.8sale of property for resale.
2.9 (i) A sale of tangible personal property used in conducting lawful gambling under
2.10chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
2.11given as promotional items, is a retail sale and is not considered a sale of property for resale.
2.12 (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
2.13dispense goods or services, including, but not limited to, coin-operated devices, is a retail
2.14sale and is not considered a sale of property for resale.
2.15 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
2.16payment becomes due under the terms of the agreement or the trade practices of the
2.17lessor or (2) in the case of a lease of a motor vehicle, as defined in section297B.01,
2.18subdivision 11 , but excluding vehicles with a manufacturer's gross vehicle weight rating
2.19greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
2.20the lease is executed.
2.21 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
2.22title or possession of the tangible personal property.
2.23 (m) A sale of a bundled transaction in which one or more of the products included
2.24in the bundle is a taxable product is a retail sale, except that if one of the products
2.25is a telecommunication service, ancillary service, Internet access, or audio or video
2.26programming service, and the seller has maintained books and records identifying through
2.27reasonable and verifiable standards the portions of the price that are attributable to the
2.28distinct and separately identifiable products, then the products are not considered part of a
2.29bundled transaction. For purposes of this paragraph:
2.30 (1) the books and records maintained by the seller must be maintained in the regular
2.31course of business, and do not include books and records created and maintained by the
2.32seller primarily for tax purposes;
2.33 (2) books and records maintained in the regular course of business include, but are
2.34not limited to, financial statements, general ledgers, invoicing and billing systems and
2.35reports, and reports for regulatory tariffs and other regulatory matters; and
3.1 (3) books and records are maintained primarily for tax purposes when the books
3.2and records identify taxable and nontaxable portions of the price, but the seller maintains
3.3other books and records that identify different prices attributable to the distinct products
3.4included in the same bundled transaction.
3.5(n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
3.6body shop business is a retail sale and the sales tax is imposed on the gross receipts from
3.7the retail sale of the paint and materials. The motor vehicle repair or body shop may
3.8multiply the number of labor hours by a rate of consideration for the paint and materials
3.9used in the repair of the motor vehicle in order to calculate the sales price of the paint and
3.10materials. If this method does not fairly reflect the taxable amount, the motor vehicle
3.11repair or body shop may use another method, if that method fairly reflects the gross
3.12receipts from the retail sale of the paint and materials that become part of a repaired motor
3.13vehicle or are consumed in repairing motor vehicles. This paragraph does not apply to
3.14wholesale transactions at an automobile auction facility.
3.15EFFECTIVE DATE.This section is effective for sales and purchases made after
3.16June 30, 2013.
3.17 Sec. 2. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
3.18to read:
3.19 Subd. 49. Motor vehicle repair paint and materials. "Motor vehicle repair paint"
3.20includes primer, body paint, clear coat, and paint thinner used to paint motor vehicles, as
3.21defined in section 297B.01. "Motor vehicle repair materials" are items that become a part
3.22of a repaired motor vehicle or are consumed in repairing the motor vehicle at retail. Motor
3.23vehicle repair materials do not include items that are not used directly on the motor vehicle,
3.24such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
3.25used to clean tools, equipment, or the shop but are not used to clean the motor vehicle.
3.26EFFECTIVE DATE.This section is effective for sales and purchases made after
3.27June 30, 2013.
1.3and materials;amending Minnesota Statutes 2012, section 297A.61, subdivision
1.44, by adding a subdivision.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
1.7 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
1.8purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
1.9course of business as defined in subdivision 21.
1.10 (b) A sale of property used by the owner only by leasing it to others or by holding it
1.11in an effort to lease it, and put to no use by the owner other than resale after the lease or
1.12effort to lease, is a sale of property for resale.
1.13 (c) A sale of master computer software that is purchased and used to make copies for
1.14sale or lease is a sale of property for resale.
1.15 (d) A sale of building materials, supplies, and equipment to owners, contractors,
1.16subcontractors, or builders for the erection of buildings or the alteration, repair, or
1.17improvement of real property is a retail sale in whatever quantity sold, whether the sale is
1.18for purposes of resale in the form of real property or otherwise.
1.19 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
1.20for installation of the floor covering is a retail sale and not a sale for resale since a sale of
1.21floor covering which includes installation is a contract for the improvement of real property.
1.22 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
1.23for installation of the items is a retail sale and not a sale for resale since a sale of
2.1shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
2.2the improvement of real property.
2.3 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
2.4is not considered a sale of property for resale.
2.5 (h) A sale of tangible personal property utilized or employed in the furnishing or
2.6providing of services under subdivision 3, paragraph (g), clause (1), including, but not
2.7limited to, property given as promotional items, is a retail sale and is not considered a
2.8sale of property for resale.
2.9 (i) A sale of tangible personal property used in conducting lawful gambling under
2.10chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
2.11given as promotional items, is a retail sale and is not considered a sale of property for resale.
2.12 (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
2.13dispense goods or services, including, but not limited to, coin-operated devices, is a retail
2.14sale and is not considered a sale of property for resale.
2.15 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
2.16payment becomes due under the terms of the agreement or the trade practices of the
2.17lessor or (2) in the case of a lease of a motor vehicle, as defined in section
2.18subdivision 11
2.19greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
2.20the lease is executed.
2.21 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
2.22title or possession of the tangible personal property.
2.23 (m) A sale of a bundled transaction in which one or more of the products included
2.24in the bundle is a taxable product is a retail sale, except that if one of the products
2.25is a telecommunication service, ancillary service, Internet access, or audio or video
2.26programming service, and the seller has maintained books and records identifying through
2.27reasonable and verifiable standards the portions of the price that are attributable to the
2.28distinct and separately identifiable products, then the products are not considered part of a
2.29bundled transaction. For purposes of this paragraph:
2.30 (1) the books and records maintained by the seller must be maintained in the regular
2.31course of business, and do not include books and records created and maintained by the
2.32seller primarily for tax purposes;
2.33 (2) books and records maintained in the regular course of business include, but are
2.34not limited to, financial statements, general ledgers, invoicing and billing systems and
2.35reports, and reports for regulatory tariffs and other regulatory matters; and
3.1 (3) books and records are maintained primarily for tax purposes when the books
3.2and records identify taxable and nontaxable portions of the price, but the seller maintains
3.3other books and records that identify different prices attributable to the distinct products
3.4included in the same bundled transaction.
3.5(n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
3.6body shop business is a retail sale and the sales tax is imposed on the gross receipts from
3.7the retail sale of the paint and materials. The motor vehicle repair or body shop may
3.8multiply the number of labor hours by a rate of consideration for the paint and materials
3.9used in the repair of the motor vehicle in order to calculate the sales price of the paint and
3.10materials. If this method does not fairly reflect the taxable amount, the motor vehicle
3.11repair or body shop may use another method, if that method fairly reflects the gross
3.12receipts from the retail sale of the paint and materials that become part of a repaired motor
3.13vehicle or are consumed in repairing motor vehicles. This paragraph does not apply to
3.14wholesale transactions at an automobile auction facility.
3.15EFFECTIVE DATE.This section is effective for sales and purchases made after
3.16June 30, 2013.
3.17 Sec. 2. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
3.18to read:
3.19 Subd. 49. Motor vehicle repair paint and materials. "Motor vehicle repair paint"
3.20includes primer, body paint, clear coat, and paint thinner used to paint motor vehicles, as
3.21defined in section 297B.01. "Motor vehicle repair materials" are items that become a part
3.22of a repaired motor vehicle or are consumed in repairing the motor vehicle at retail. Motor
3.23vehicle repair materials do not include items that are not used directly on the motor vehicle,
3.24such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
3.25used to clean tools, equipment, or the shop but are not used to clean the motor vehicle.
3.26EFFECTIVE DATE.This section is effective for sales and purchases made after
3.27June 30, 2013.
