Minnesota 2023-2024 Regular Session

Minnesota Senate Bill SF1378 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to taxation; sales and use; expanding the sales tax exemption for certain
3	3	1.3 meals and drinks; expanding the sales tax exemption for certain capital equipment
4	4	1.4 purchases; amending Minnesota Statutes 2022, section 297A.68, subdivision 5,
5	5	1.5 by adding subdivisions.
6	6	1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
7	7	1.7 Section 1. Minnesota Statutes 2022, section 297A.68, subdivision 5, is amended to read:
8	8	1.8 Subd. 5.Capital equipment.(a) Capital equipment is exempt.
9	9	1.9 "Capital equipment" means machinery and equipment purchased or leased, and used in
10	10	1.10this state by the purchaser or lessee primarily for manufacturing, fabricating, mining, or
11	11	1.11refining tangible personal property to be sold ultimately at retail if the machinery and
12	12	1.12equipment are essential to the integrated production process of manufacturing, fabricating,
13	13	1.13mining, or refining. Capital equipment also includes machinery and equipment used primarily
14	14	1.14to electronically transmit results retrieved by a customer of an online computerized data
15	15	1.15retrieval system and machinery and equipment used by mobile food units and restaurants,
16	16	1.16as defined in section 157.15, subdivisions 9 and 12, in the furnishing, preparing, or serving
17	17	1.17of prepared foods as defined in section 297A.61, subdivision 31.
18	18	1.18 (b) Capital equipment includes, but is not limited to:
19	19	1.19 (1) machinery and equipment used to operate, control, or regulate the production
20	20	1.20equipment;
21	21	1.21 (2) machinery and equipment used for research and development, design, quality control,
22	22	1.22and testing activities;
23	23	1Section 1.
24	24	23-02300 as introduced01/12/23 REVISOR EAP/BM
25	25	SENATE
26	26	STATE OF MINNESOTA
27	27	S.F. No. 1378NINETY-THIRD SESSION
28	28	(SENATE AUTHORS: ANDERSON, Drazkowski, Nelson and Weber)
29	29	OFFICIAL STATUSD-PGDATE
30	30	Introduction and first reading02/08/2023
31	31	Referred to Taxes 2.1 (3) environmental control devices that are used to maintain conditions such as
32	32	2.2temperature, humidity, light, or air pressure when those conditions are essential to and are
33	33	2.3part of the production process;
34	34	2.4 (4) materials and supplies used to construct and install machinery or equipment;
35	35	2.5 (5) repair and replacement parts, including accessories, whether purchased as spare parts,
36	36	2.6repair parts, or as upgrades or modifications to machinery or equipment;
37	37	2.7 (6) materials used for foundations that support machinery or equipment;
38	38	2.8 (7) materials used to construct and install special purpose buildings used in the production
39	39	2.9process;
40	40	2.10 (8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed as part
41	41	2.11of the delivery process regardless if mounted on a chassis, repair parts for ready-mixed
42	42	2.12concrete trucks, and leases of ready-mixed concrete trucks; and
43	43	2.13 (9) machinery or equipment used for research, development, design, or production of
44	44	2.14computer software.
45	45	2.15 (c) Capital equipment does not include the following:
46	46	2.16 (1) motor vehicles taxed under chapter 297B;
47	47	2.17 (2) machinery or equipment used to receive or store raw materials;
48	48	2.18 (3) building materials, except for materials included in paragraph (b), clauses (6) and
49	49	2.19(7);
50	50	2.20 (4) machinery or equipment used for nonproduction purposes, including, but not limited
51	51	2.21to, the following: plant security, fire prevention, first aid, and hospital stations; support
52	52	2.22operations or administration; pollution control; and plant cleaning, disposal of scrap and
53	53	2.23waste, plant communications, space heating, cooling, lighting, or safety;
54	54	2.24 (5) farm machinery and aquaculture production equipment as defined by section 297A.61,
55	55	2.25subdivisions 12 and 13;
56	56	2.26 (6) machinery or equipment purchased and installed by a contractor as part of an
57	57	2.27improvement to real property;
58	58	2.28 (7) machinery and equipment used by restaurants in the furnishing, preparing, or serving
59	59	2.29of prepared foods as defined in section 297A.61, subdivision 31;
60	60	2.30 (8) (7) machinery and equipment used to furnish the services listed in section 297A.61,
61	61	2.31subdivision 3, paragraph (g), clause (6), items (i) to (vi) and (viii);
62	62	2Section 1.
63	63	23-02300 as introduced01/12/23 REVISOR EAP/BM 3.1 (9) (8) machinery or equipment used in the transportation, transmission, or distribution
64	64	3.2of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines,
65	65	3.3tanks, mains, or other means of transporting those products. This clause does not apply to
66	66	3.4machinery or equipment used to blend petroleum or biodiesel fuel as defined in section
67	67	3.5239.77; or
68	68	3.6 (10) (9) any other item that is not essential to the integrated process of manufacturing,
69	69	3.7fabricating, mining, or refining.
70	70	3.8 (d) For purposes of this subdivision:
71	71	3.9 (1) "Equipment" means independent devices or tools separate from machinery but
72	72	3.10essential to an integrated production process, including computers and computer software,
73	73	3.11used in operating, controlling, or regulating machinery and equipment; and any subunit or
74	74	3.12assembly comprising a component of any machinery or accessory or attachment parts of
75	75	3.13machinery, such as tools, dies, jigs, patterns, and molds.
76	76	3.14 (2) "Fabricating" means to make, build, create, produce, or assemble components or
77	77	3.15property to work in a new or different manner.
78	78	3.16 (3) "Integrated production process" means a process or series of operations through
79	79	3.17which tangible personal property is manufactured, fabricated, mined, or refined. For purposes
80	80	3.18of this clause, (i) manufacturing begins with the removal of raw materials from inventory
81	81	3.19and ends when the last process prior to loading for shipment has been completed; (ii)
82	82	3.20fabricating begins with the removal from storage or inventory of the property to be assembled,
83	83	3.21processed, altered, or modified and ends with the creation or production of the new or
84	84	3.22changed product; (iii) mining begins with the removal of overburden from the site of the
85	85	3.23ores, minerals, stone, peat deposit, or surface materials and ends when the last process before
86	86	3.24stockpiling is completed; and (iv) refining begins with the removal from inventory or storage
87	87	3.25of a natural resource and ends with the conversion of the item to its completed form.
88	88	3.26 (4) "Machinery" means mechanical, electronic, or electrical devices, including computers
89	89	3.27and computer software, that are purchased or constructed to be used for the activities set
90	90	3.28forth in paragraph (a), beginning with the removal of raw materials from inventory through
91	91	3.29completion of the product, including packaging of the product.
92	92	3.30 (5) "Machinery and equipment used for pollution control" means machinery and
93	93	3.31equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity
94	94	3.32described in paragraph (a).
95	95	3Section 1.
96	96	23-02300 as introduced01/12/23 REVISOR EAP/BM 4.1 (6) "Manufacturing" means an operation or series of operations where raw materials are
97	97	4.2changed in form, composition, or condition by machinery and equipment and which results
98	98	4.3in the production of a new article of tangible personal property. For purposes of this
99	99	4.4subdivision, "manufacturing" includes the generation of electricity or steam to be sold at
100	100	4.5retail.
101	101	4.6 (7) "Mining" means the extraction of minerals, ores, stone, or peat.
102	102	4.7 (8) "Online data retrieval system" means a system whose cumulation of information is
103	103	4.8equally available and accessible to all its customers.
104	104	4.9 (9) "Primarily" means machinery and equipment used 50 percent or more of the time in
105	105	4.10an activity described in paragraph (a).
106	106	4.11 (10) "Refining" means the process of converting a natural resource to an intermediate
107	107	4.12or finished product, including the treatment of water to be sold at retail.
108	108	4.13 (11) This subdivision does not apply to telecommunications equipment as provided in
109	109	4.14subdivision 35a, and does not apply to wire, cable, or poles for telecommunications services.
110	110	4.15 EFFECTIVE DATE.This section is effective for sales and purchases made after June
111	111	4.1630, 2023.
112	112	4.17 Sec. 2. Minnesota Statutes 2022, section 297A.68, is amended by adding a subdivision to
113	113	4.18read:
114	114	4.19 Subd. 46.Complimentary meals and beverages.Meals, nonalcoholic beverages, and
115	115	4.20alcoholic beverages provided by a restaurant as defined under section 157.15, subdivision
116	116	4.2112, to a customer at no cost to the customer are exempt.
117	117	4.22 EFFECTIVE DATE.This section is effective for sales and purchases made after June
118	118	4.2330, 2023.
119	119	4.24 Sec. 3. Minnesota Statutes 2022, section 297A.68, is amended by adding a subdivision to
120	120	4.25read:
121	121	4.26 Subd. 47.Employee food and drink.Prepared food and drinks purchased for and served
122	122	4.27to employees of restaurants defined under section 157.15, subdivision 12, are exempt.
123	123	4.28 EFFECTIVE DATE.This section is effective for sales and purchases made after June
124	124	4.2930, 2023.
125	125	4Sec. 3.
126	126	23-02300 as introduced01/12/23 REVISOR EAP/BM