Bill Text: MN SF2130 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Electronic and precision equipment and commercial and industrial machinery repair and maintenance sales and use tax repeal; telecommunications equipment sales and use tax exemption reinstatement
Spectrum: Partisan Bill (Republican 5-0)
Status: (Introduced - Dead) 2014-03-03 - Referred to Taxes [SF2130 Detail]
Download: Minnesota-2013-SF2130-Introduced.html
1.2relating to taxation; sales and use; repealing the tax on certain business
1.3transactions; reinstating the exemption for telecommunications equipment;
1.4amending Minnesota Statutes 2012, section 297A.68, by adding a subdivision;
1.5Minnesota Statutes 2013 Supplement, section 297A.61, subdivision 3.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2013 Supplement, section 297A.61, subdivision 3,
1.8is amended to read:
1.9 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
1.10to, each of the transactions listed in this subdivision. In applying the provisions of this
1.11chapter, the terms "tangible personal property" and "retail sale" include the taxable
1.12services listed in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision
1.13of these taxable services, unless specifically provided otherwise. Services performed by
1.14an employee for an employer are not taxable. Services performed by a partnership or
1.15association for another partnership or association are not taxable if one of the entities owns
1.16or controls more than 80 percent of the voting power of the equity interest in the other
1.17entity. Services performed between members of an affiliated group of corporations are not
1.18taxable. For purposes of the preceding sentence, "affiliated group of corporations" means
1.19those entities that would be classified as members of an affiliated group as defined under
1.20United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).
1.21 (b) Sale and purchase include:
1.22 (1) any transfer of title or possession, or both, of tangible personal property, whether
1.23absolutely or conditionally, for a consideration in money or by exchange or barter; and
2.1 (2) the leasing of or the granting of a license to use or consume, for a consideration
2.2in money or by exchange or barter, tangible personal property, other than a manufactured
2.3home used for residential purposes for a continuous period of 30 days or more.
2.4 (c) Sale and purchase include the production, fabrication, printing, or processing of
2.5tangible personal property for a consideration for consumers who furnish either directly or
2.6indirectly the materials used in the production, fabrication, printing, or processing.
2.7 (d) Sale and purchase include the preparing for a consideration of food.
2.8Notwithstanding section297A.67, subdivision 2 , taxable food includes, but is not limited
2.9to, the following:
2.10 (1) prepared food sold by the retailer;
2.11 (2) soft drinks;
2.12 (3) candy;
2.13 (4) dietary supplements; and
2.14 (5) all food sold through vending machines.
2.15 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
2.16gas, water, or steam for use or consumption within this state.
2.17 (f) A sale and a purchase includes the transfer for a consideration of prewritten
2.18computer software whether delivered electronically, by load and leave, or otherwise.
2.19 (g) A sale and a purchase includes the furnishing for a consideration of the following
2.20services:
2.21 (1) the privilege of admission to places of amusement, recreational areas, or athletic
2.22events, and the making available of amusement devices, tanning facilities, reducing
2.23salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
2.24 (2) lodging and related services by a hotel, rooming house, resort, campground,
2.25motel, or trailer camp, including furnishing the guest of the facility with access to
2.26telecommunication services, and the granting of any similar license to use real property in
2.27a specific facility, other than the renting or leasing of it for a continuous period of 30 days
2.28or more under an enforceable written agreement that may not be terminated without prior
2.29notice and including accommodations intermediary services provided in connection with
2.30other services provided under this clause;
2.31 (3) nonresidential parking services, whether on a contractual, hourly, or other
2.32periodic basis, except for parking at a meter;
2.33 (4) the granting of membership in a club, association, or other organization if:
2.34 (i) the club, association, or other organization makes available for the use of its
2.35members sports and athletic facilities, without regard to whether a separate charge is
2.36assessed for use of the facilities; and
3.1 (ii) use of the sports and athletic facility is not made available to the general public
3.2on the same basis as it is made available to members.
3.3Granting of membership means both onetime initiation fees and periodic membership
3.4dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
3.5squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
3.6swimming pools; and other similar athletic or sports facilities;
3.7 (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
3.8material used in road construction; and delivery of concrete block by a third party if the
3.9delivery would be subject to the sales tax if provided by the seller of the concrete block.
3.10For purposes of this clause, "road construction" means construction of:
3.11 (i) public roads;
3.12 (ii) cartways; and
3.13 (iii) private roads in townships located outside of the seven-county metropolitan area
3.14up to the point of the emergency response location sign; and
3.15 (6) services as provided in this clause:
3.16 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
3.17and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
3.18drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
3.19include services provided by coin operated facilities operated by the customer;
3.20 (ii) motor vehicle washing, waxing, and cleaning services, including services
3.21provided by coin operated facilities operated by the customer, and rustproofing,
3.22undercoating, and towing of motor vehicles;
3.23 (iii) building and residential cleaning, maintenance, and disinfecting services and
3.24pest control and exterminating services;
3.25 (iv) detective, security, burglar, fire alarm, and armored car services; but not
3.26including services performed within the jurisdiction they serve by off-duty licensed peace
3.27officers as defined in section626.84, subdivision 1 , or services provided by a nonprofit
3.28organization or any organization at the direction of a county for monitoring and electronic
3.29surveillance of persons placed on in-home detention pursuant to court order or under the
3.30direction of the Minnesota Department of Corrections;
3.31 (v) pet grooming services;
3.32 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
3.33and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
3.34plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
3.35clearing contract as defined in section297A.68, subdivision 40 ; and tree trimming for
4.1public utility lines. Services performed under a construction contract for the installation of
4.2shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
4.3 (vii) massages, except when provided by a licensed health care facility or
4.4professional or upon written referral from a licensed health care facility or professional for
4.5treatment of illness, injury, or disease; and
4.6 (viii) the furnishing of lodging, board, and care services for animals in kennels and
4.7other similar arrangements, but excluding veterinary and horse boarding services.
4.8 (h) A sale and a purchase includes the furnishing for a consideration of tangible
4.9personal property or taxable services by the United States or any of its agencies or
4.10instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
4.11subdivisions.
4.12 (i) A sale and a purchase includes the furnishing for a consideration of
4.13telecommunications services, ancillary services associated with telecommunication
4.14services, and pay television services. Telecommunication services include, but are
4.15not limited to, the following services, as defined in section297A.669 : air-to-ground
4.16radiotelephone service, mobile telecommunication service, postpaid calling service,
4.17prepaid calling service, prepaid wireless calling service, and private communication
4.18services. The services in this paragraph are taxed to the extent allowed under federal law.
4.19 (j) A sale and a purchase includes the furnishing for a consideration of installation if
4.20the installation charges would be subject to the sales tax if the installation were provided
4.21by the seller of the item being installed.
4.22 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
4.23to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
4.24the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
4.2559B.02, subdivision
11.
4.26 (l) A sale and a purchase includes furnishing for a consideration of specified digital
4.27products or other digital products or granting the right for a consideration to use specified
4.28digital products or other digital products on a temporary or permanent basis and regardless
4.29of whether the purchaser is required to make continued payments for such right. Wherever
4.30the term "tangible personal property" is used in this chapter, other than in subdivisions 10
4.31and 38, the provisions also apply to specified digital products, or other digital products,
4.32unless specifically provided otherwise or the context indicates otherwise.
4.33(m) A sale and purchase includes the furnishing for consideration of the following
4.34services:
4.35(1) repairing and maintaining electronic and precision equipment, which service can
4.36be deducted as a business expense under the Internal Revenue Code. This includes, but
5.1is not limited to, repair or maintenance of electronic devices, computers and computer
5.2peripherals, monitors, computer terminals, storage devices, and CD-ROM drives; other
5.3office equipment such as photocopying machines, printers, and facsimile machines;
5.4televisions, stereos, sound systems, video or digital recorders and players; two-way radios
5.5and other communications equipment; radar and sonar equipment, scientific instruments,
5.6microscopes, and medical equipment;
5.7(2) repairing and maintaining commercial and industrial machinery and equipment.
5.8For purposes of this subdivision, the following items are not commercial or industrial
5.9machinery and equipment: (i) motor vehicles; (ii) furniture and fixtures; (iii) ships; (iv)
5.10railroad stock; and (v) aircraft; and
5.11(3) warehousing or storage services for tangible personal property, excluding:
5.12(i) agricultural products;
5.13(ii) refrigerated storage;
5.14(iii) electronic data; and
5.15(iv) self-storage services and storage of motor vehicles, recreational vehicles, and
5.16boats, not eligible to be deducted as a business expense under the Internal Revenue Code.
5.17EFFECTIVE DATE.This section is effective retroactively for sales and purchases
5.18made after June 30, 2013, except that stricken paragraph (m), clause (3), is effective the
5.19day following final enactment. Refunds for sales tax paid on items exempted under this
5.20section may be applied for and paid in the same manner as refunds under Minnesota
5.21Statutes, section 297A.75.
5.22 Sec. 2. Minnesota Statutes 2012, section 297A.68, is amended by adding a subdivision
5.23to read:
5.24 Subd. 35a. Telecommunications and pay television machinery and equipment.
5.25(a) Telecommunications or pay television machinery and equipment purchased or leased
5.26for use directly by a telecommunications or pay television service provider primarily in
5.27the provision of telecommunications or pay television services that are ultimately to be
5.28sold at retail are exempt, regardless of whether purchased by the owner, a contractor,
5.29or a subcontractor.
5.30(b) For purposes of this subdivision, "telecommunications or pay television
5.31machinery and equipment" includes, but is not limited to:
5.32(1) machinery, equipment, and fixtures utilized in receiving, initiating,
5.33amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring
5.34telecommunications, or pay television services, such as computers, transformers,
6.1amplifiers, routers, bridges, repeaters, multiplexers, and other items performing
6.2comparable functions;
6.3(2) machinery, equipment, and fixtures used in the transportation of
6.4telecommunications, or pay television services, such as radio transmitters and receivers,
6.5satellite equipment, microwave equipment, and other transporting media, but not wire,
6.6cable, fiber, poles, or conduit;
6.7(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or
6.8enable the machinery in clauses (1) and (2) to accomplish its intended function, such as
6.9auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning
6.10equipment necessary to the operation of the telecommunications, cable television, or direct
6.11satellite equipment; and software necessary to the operation of the telecommunications
6.12or pay television equipment; and
6.13(4) repair and replacement parts, including accessories, whether purchased as spare
6.14parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
6.15EFFECTIVE DATE.This section is effective retroactively for sales and purchases
6.16made after June 30, 2013. Refunds for sales tax paid on items exempted under this
6.17section may be applied for and paid in the same manner as refunds under Minnesota
6.18Statutes, section 297A.75.
1.3transactions; reinstating the exemption for telecommunications equipment;
1.4amending Minnesota Statutes 2012, section 297A.68, by adding a subdivision;
1.5Minnesota Statutes 2013 Supplement, section 297A.61, subdivision 3.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2013 Supplement, section 297A.61, subdivision 3,
1.8is amended to read:
1.9 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
1.10to, each of the transactions listed in this subdivision. In applying the provisions of this
1.11chapter, the terms "tangible personal property" and "retail sale" include the taxable
1.12services listed in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision
1.13of these taxable services, unless specifically provided otherwise. Services performed by
1.14an employee for an employer are not taxable. Services performed by a partnership or
1.15association for another partnership or association are not taxable if one of the entities owns
1.16or controls more than 80 percent of the voting power of the equity interest in the other
1.17entity. Services performed between members of an affiliated group of corporations are not
1.18taxable. For purposes of the preceding sentence, "affiliated group of corporations" means
1.19those entities that would be classified as members of an affiliated group as defined under
1.20United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).
1.21 (b) Sale and purchase include:
1.22 (1) any transfer of title or possession, or both, of tangible personal property, whether
1.23absolutely or conditionally, for a consideration in money or by exchange or barter; and
2.1 (2) the leasing of or the granting of a license to use or consume, for a consideration
2.2in money or by exchange or barter, tangible personal property, other than a manufactured
2.3home used for residential purposes for a continuous period of 30 days or more.
2.4 (c) Sale and purchase include the production, fabrication, printing, or processing of
2.5tangible personal property for a consideration for consumers who furnish either directly or
2.6indirectly the materials used in the production, fabrication, printing, or processing.
2.7 (d) Sale and purchase include the preparing for a consideration of food.
2.8Notwithstanding section
2.9to, the following:
2.10 (1) prepared food sold by the retailer;
2.11 (2) soft drinks;
2.12 (3) candy;
2.13 (4) dietary supplements; and
2.14 (5) all food sold through vending machines.
2.15 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
2.16gas, water, or steam for use or consumption within this state.
2.17 (f) A sale and a purchase includes the transfer for a consideration of prewritten
2.18computer software whether delivered electronically, by load and leave, or otherwise.
2.19 (g) A sale and a purchase includes the furnishing for a consideration of the following
2.20services:
2.21 (1) the privilege of admission to places of amusement, recreational areas, or athletic
2.22events, and the making available of amusement devices, tanning facilities, reducing
2.23salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
2.24 (2) lodging and related services by a hotel, rooming house, resort, campground,
2.25motel, or trailer camp, including furnishing the guest of the facility with access to
2.26telecommunication services, and the granting of any similar license to use real property in
2.27a specific facility, other than the renting or leasing of it for a continuous period of 30 days
2.28or more under an enforceable written agreement that may not be terminated without prior
2.29notice and including accommodations intermediary services provided in connection with
2.30other services provided under this clause;
2.31 (3) nonresidential parking services, whether on a contractual, hourly, or other
2.32periodic basis, except for parking at a meter;
2.33 (4) the granting of membership in a club, association, or other organization if:
2.34 (i) the club, association, or other organization makes available for the use of its
2.35members sports and athletic facilities, without regard to whether a separate charge is
2.36assessed for use of the facilities; and
3.1 (ii) use of the sports and athletic facility is not made available to the general public
3.2on the same basis as it is made available to members.
3.3Granting of membership means both onetime initiation fees and periodic membership
3.4dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
3.5squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
3.6swimming pools; and other similar athletic or sports facilities;
3.7 (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
3.8material used in road construction; and delivery of concrete block by a third party if the
3.9delivery would be subject to the sales tax if provided by the seller of the concrete block.
3.10For purposes of this clause, "road construction" means construction of:
3.11 (i) public roads;
3.12 (ii) cartways; and
3.13 (iii) private roads in townships located outside of the seven-county metropolitan area
3.14up to the point of the emergency response location sign; and
3.15 (6) services as provided in this clause:
3.16 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
3.17and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
3.18drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
3.19include services provided by coin operated facilities operated by the customer;
3.20 (ii) motor vehicle washing, waxing, and cleaning services, including services
3.21provided by coin operated facilities operated by the customer, and rustproofing,
3.22undercoating, and towing of motor vehicles;
3.23 (iii) building and residential cleaning, maintenance, and disinfecting services and
3.24pest control and exterminating services;
3.25 (iv) detective, security, burglar, fire alarm, and armored car services; but not
3.26including services performed within the jurisdiction they serve by off-duty licensed peace
3.27officers as defined in section
3.28organization or any organization at the direction of a county for monitoring and electronic
3.29surveillance of persons placed on in-home detention pursuant to court order or under the
3.30direction of the Minnesota Department of Corrections;
3.31 (v) pet grooming services;
3.32 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
3.33and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
3.34plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
3.35clearing contract as defined in section
4.1public utility lines. Services performed under a construction contract for the installation of
4.2shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
4.3 (vii) massages, except when provided by a licensed health care facility or
4.4professional or upon written referral from a licensed health care facility or professional for
4.5treatment of illness, injury, or disease; and
4.6 (viii) the furnishing of lodging, board, and care services for animals in kennels and
4.7other similar arrangements, but excluding veterinary and horse boarding services.
4.8 (h) A sale and a purchase includes the furnishing for a consideration of tangible
4.9personal property or taxable services by the United States or any of its agencies or
4.10instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
4.11subdivisions.
4.12 (i) A sale and a purchase includes the furnishing for a consideration of
4.13telecommunications services, ancillary services associated with telecommunication
4.14services, and pay television services. Telecommunication services include, but are
4.15not limited to, the following services, as defined in section
4.16radiotelephone service, mobile telecommunication service, postpaid calling service,
4.17prepaid calling service, prepaid wireless calling service, and private communication
4.18services. The services in this paragraph are taxed to the extent allowed under federal law.
4.19 (j) A sale and a purchase includes the furnishing for a consideration of installation if
4.20the installation charges would be subject to the sales tax if the installation were provided
4.21by the seller of the item being installed.
4.22 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
4.23to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
4.24the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
4.26 (l) A sale and a purchase includes furnishing for a consideration of specified digital
4.27products or other digital products or granting the right for a consideration to use specified
4.28digital products or other digital products on a temporary or permanent basis and regardless
4.29of whether the purchaser is required to make continued payments for such right. Wherever
4.30the term "tangible personal property" is used in this chapter, other than in subdivisions 10
4.31and 38, the provisions also apply to specified digital products, or other digital products,
4.32unless specifically provided otherwise or the context indicates otherwise.
4.33
4.34
4.35
4.36
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5.17EFFECTIVE DATE.This section is effective retroactively for sales and purchases
5.18made after June 30, 2013, except that stricken paragraph (m), clause (3), is effective the
5.19day following final enactment. Refunds for sales tax paid on items exempted under this
5.20section may be applied for and paid in the same manner as refunds under Minnesota
5.21Statutes, section 297A.75.
5.22 Sec. 2. Minnesota Statutes 2012, section 297A.68, is amended by adding a subdivision
5.23to read:
5.24 Subd. 35a. Telecommunications and pay television machinery and equipment.
5.25(a) Telecommunications or pay television machinery and equipment purchased or leased
5.26for use directly by a telecommunications or pay television service provider primarily in
5.27the provision of telecommunications or pay television services that are ultimately to be
5.28sold at retail are exempt, regardless of whether purchased by the owner, a contractor,
5.29or a subcontractor.
5.30(b) For purposes of this subdivision, "telecommunications or pay television
5.31machinery and equipment" includes, but is not limited to:
5.32(1) machinery, equipment, and fixtures utilized in receiving, initiating,
5.33amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring
5.34telecommunications, or pay television services, such as computers, transformers,
6.1amplifiers, routers, bridges, repeaters, multiplexers, and other items performing
6.2comparable functions;
6.3(2) machinery, equipment, and fixtures used in the transportation of
6.4telecommunications, or pay television services, such as radio transmitters and receivers,
6.5satellite equipment, microwave equipment, and other transporting media, but not wire,
6.6cable, fiber, poles, or conduit;
6.7(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or
6.8enable the machinery in clauses (1) and (2) to accomplish its intended function, such as
6.9auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning
6.10equipment necessary to the operation of the telecommunications, cable television, or direct
6.11satellite equipment; and software necessary to the operation of the telecommunications
6.12or pay television equipment; and
6.13(4) repair and replacement parts, including accessories, whether purchased as spare
6.14parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
6.15EFFECTIVE DATE.This section is effective retroactively for sales and purchases
6.16made after June 30, 2013. Refunds for sales tax paid on items exempted under this
6.17section may be applied for and paid in the same manner as refunds under Minnesota
6.18Statutes, section 297A.75.
