Bill Text: MN SF1636 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Sales and use tax retail sale definition modification for rent-to-own and lease-to-own used vehicles; motor vehicle lease sales tax revenue use clarification
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2012-03-22 - Comm report: To pass as amended and re-refer to Taxes [SF1636 Detail]
Download: Minnesota-2011-SF1636-Engrossed.html
1.2relating to taxation; sales and use; modifying definition of retail sale; clarifying
1.3use of motor vehicle lease sales tax revenue;amending Minnesota Statutes 2010,
1.4sections 297A.61, subdivision 4; 297A.815, subdivision 3.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 4, is amended to
1.7read:
1.8 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
1.9purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
1.10course of business as defined in subdivision 21.
1.11 (b) A sale of property used by the owner only by leasing it to others or by holding it
1.12in an effort to lease it, and put to no use by the owner other than resale after the lease or
1.13effort to lease, is a sale of property for resale.
1.14 (c) A sale of master computer software that is purchased and used to make copies for
1.15sale or lease is a sale of property for resale.
1.16 (d) A sale of building materials, supplies, and equipment to owners, contractors,
1.17subcontractors, or builders for the erection of buildings or the alteration, repair, or
1.18improvement of real property is a retail sale in whatever quantity sold, whether the sale is
1.19for purposes of resale in the form of real property or otherwise.
1.20 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
1.21for installation of the floor covering is a retail sale and not a sale for resale since a sale
1.22of floor covering which includes installation is a contract for the improvement of real
1.23property.
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 lessor
2.20or; (2) in the case of a lease of a motor vehicle, as defined in section
297B.01, subdivision
2.2111 , but excluding vehicles with a manufacturer's gross vehicle weight rating greater than
2.2210,000 pounds and rentals of vehicles for not more than 28 days, at the time the lease is
2.23executed; or (3) for rent-to-own or lease-to-own used vehicles where the lessee may
2.24purchase or return the vehicle at any time without penalty, at the time each payment is
2.25made under the terms of the agreement.
2.26 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
2.27title or possession of the tangible personal property.
2.28 (m) A sale of a bundled transaction in which one or more of the products included
2.29in the bundle is a taxable product is a retail sale, except that if one of the products
2.30is a telecommunication service, ancillary service, Internet access, or audio or video
2.31programming service, and the seller has maintained books and records identifying through
2.32reasonable and verifiable standards the portions of the price that are attributable to the
2.33distinct and separately identifiable products, then the products are not considered part of a
2.34bundled transaction. For purposes of this paragraph:
3.1 (1) the books and records maintained by the seller must be maintained in the regular
3.2course of business, and do not include books and records created and maintained by the
3.3seller primarily for tax purposes;
3.4 (2) books and records maintained in the regular course of business include, but are
3.5not limited to, financial statements, general ledgers, invoicing and billing systems and
3.6reports, and reports for regulatory tariffs and other regulatory matters; and
3.7 (3) books and records are maintained primarily for tax purposes when the books
3.8and records identify taxable and nontaxable portions of the price, but the seller maintains
3.9other books and records that identify different prices attributable to the distinct products
3.10included in the same bundled transaction.
3.11EFFECTIVE DATE.This section is effective for leases entered into after June
3.1230, 2012.
3.13 Sec. 2. Minnesota Statutes 2010, section 297A.815, subdivision 3, is amended to read:
3.14 Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this
3.15subdivision, "net revenue" means an amount equal to:
3.16 (1) the revenues, including interest and penalties, collected under this section and
3.17on the leases under section 297A.61, subdivision 4, paragraph (k), clause (3), during
3.18the fiscal year; less
3.19 (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal
3.20year 2013 and following fiscal years, $32,000,000.
3.21 (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
3.22estimate the amount of the revenues and subtraction under paragraph (a) for the current
3.23fiscal year.
3.24 (c) On or after July 1 of the subsequent fiscal year, the commissioner of management
3.25and budget shall transfer the net revenue as estimated in paragraph (b) from the general
3.26fund, as follows:
3.27 (1) 50 percent to the greater Minnesota transit account; and
3.28 (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
3.29to the contrary, the commissioner of transportation shall allocate the funds transferred
3.30under this clause to the counties in the metropolitan area, as defined in section473.121 ,
3.31subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall
3.32receive of such amount the percentage that its population, as defined in section477A.011 ,
3.33subdivision 3, estimated or established by July 15 of the year prior to the current calendar
3.34year, bears to the total population of the counties receiving funds under this clause.
4.1 (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must
4.2be calculated using the following percentages of the total revenues:
4.3 (1) for fiscal year 2010, 83.75 percent; and
4.4 (2) for fiscal year 2011, 93.75 percent.
4.5EFFECTIVE DATE.This section is effective for leases entered into after June
4.630, 2012.
1.3use of motor vehicle lease sales tax revenue;amending Minnesota Statutes 2010,
1.4sections 297A.61, subdivision 4; 297A.815, subdivision 3.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 4, is amended to
1.7read:
1.8 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
1.9purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
1.10course of business as defined in subdivision 21.
1.11 (b) A sale of property used by the owner only by leasing it to others or by holding it
1.12in an effort to lease it, and put to no use by the owner other than resale after the lease or
1.13effort to lease, is a sale of property for resale.
1.14 (c) A sale of master computer software that is purchased and used to make copies for
1.15sale or lease is a sale of property for resale.
1.16 (d) A sale of building materials, supplies, and equipment to owners, contractors,
1.17subcontractors, or builders for the erection of buildings or the alteration, repair, or
1.18improvement of real property is a retail sale in whatever quantity sold, whether the sale is
1.19for purposes of resale in the form of real property or otherwise.
1.20 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
1.21for installation of the floor covering is a retail sale and not a sale for resale since a sale
1.22of floor covering which includes installation is a contract for the improvement of real
1.23property.
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 lessor
2.20
2.2111
2.2210,000 pounds and rentals of vehicles for not more than 28 days, at the time the lease is
2.23executed; or (3) for rent-to-own or lease-to-own used vehicles where the lessee may
2.24purchase or return the vehicle at any time without penalty, at the time each payment is
2.25made under the terms of the agreement.
2.26 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
2.27title or possession of the tangible personal property.
2.28 (m) A sale of a bundled transaction in which one or more of the products included
2.29in the bundle is a taxable product is a retail sale, except that if one of the products
2.30is a telecommunication service, ancillary service, Internet access, or audio or video
2.31programming service, and the seller has maintained books and records identifying through
2.32reasonable and verifiable standards the portions of the price that are attributable to the
2.33distinct and separately identifiable products, then the products are not considered part of a
2.34bundled transaction. For purposes of this paragraph:
3.1 (1) the books and records maintained by the seller must be maintained in the regular
3.2course of business, and do not include books and records created and maintained by the
3.3seller primarily for tax purposes;
3.4 (2) books and records maintained in the regular course of business include, but are
3.5not limited to, financial statements, general ledgers, invoicing and billing systems and
3.6reports, and reports for regulatory tariffs and other regulatory matters; and
3.7 (3) books and records are maintained primarily for tax purposes when the books
3.8and records identify taxable and nontaxable portions of the price, but the seller maintains
3.9other books and records that identify different prices attributable to the distinct products
3.10included in the same bundled transaction.
3.11EFFECTIVE DATE.This section is effective for leases entered into after June
3.1230, 2012.
3.13 Sec. 2. Minnesota Statutes 2010, section 297A.815, subdivision 3, is amended to read:
3.14 Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this
3.15subdivision, "net revenue" means an amount equal to:
3.16 (1) the revenues, including interest and penalties, collected under this section and
3.17on the leases under section 297A.61, subdivision 4, paragraph (k), clause (3), during
3.18the fiscal year; less
3.19 (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal
3.20year 2013 and following fiscal years, $32,000,000.
3.21 (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
3.22estimate the amount of the revenues and subtraction under paragraph (a) for the current
3.23fiscal year.
3.24 (c) On or after July 1 of the subsequent fiscal year, the commissioner of management
3.25and budget shall transfer the net revenue as estimated in paragraph (b) from the general
3.26fund, as follows:
3.27 (1) 50 percent to the greater Minnesota transit account; and
3.28 (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
3.29to the contrary, the commissioner of transportation shall allocate the funds transferred
3.30under this clause to the counties in the metropolitan area, as defined in section
3.31subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall
3.32receive of such amount the percentage that its population, as defined in section
3.33subdivision 3, estimated or established by July 15 of the year prior to the current calendar
3.34year, bears to the total population of the counties receiving funds under this clause.
4.1 (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must
4.2be calculated using the following percentages of the total revenues:
4.3 (1) for fiscal year 2010, 83.75 percent; and
4.4 (2) for fiscal year 2011, 93.75 percent.
4.5EFFECTIVE DATE.This section is effective for leases entered into after June
4.630, 2012.
