Lawn care services removed from the tax base.

A bill for an act

relating to taxation; sales and use; removing certain lawn care services from the

tax base; amending Minnesota Statutes 2024, section 297A.61, subdivision 3;

repealing Minnesota Statutes 2024, sections 297A.67, subdivision 25; 297A.68,

subdivision 40.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 297A.61, subdivision 3, is amended to read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited to,

each of the transactions listed in this subdivision. In applying the provisions of this chapter,

the terms "tangible personal property" and "retail sale" include the taxable services listed

in paragraph (g), clause (6), items (i) to
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(vi) and (viii)
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(v) and (vii)
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, and the provision of

these taxable services, unless specifically provided otherwise. Services performed by an

employee for an employer are not taxable. Services performed by a partnership or association

for another partnership or association are not taxable if one of the entities owns or controls

more than 80 percent of the voting power of the equity interest in the other entity. Services

performed between members of an affiliated group of corporations are not taxable. For

purposes of the preceding sentence, "affiliated group of corporations" means those entities

that would be classified as members of an affiliated group as defined under United States

Code, title 26, section 1504, disregarding the exclusions in section 1504(b).

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether

absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration in

money or by exchange or barter, tangible personal property, other than a manufactured

home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of

tangible personal property for a consideration for consumers who furnish either directly or

indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food. Notwithstanding

section
297A.67, subdivision 2
, taxable food includes, but is not limited to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy; and

(4) dietary supplements.

(e) A sale and a purchase includes the furnishing for a consideration of electricity, gas,

water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten computer

software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following

services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic

events, and the making available of amusement devices, tanning facilities, reducing salons,

steam baths, health clubs, and spas or athletic facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground, motel,

or trailer camp, including furnishing the guest of the facility with access to telecommunication

services, and the granting of any similar license to use real property in a specific facility,

other than the renting or leasing of it for a continuous period of 30 days or more under an

enforceable written agreement that may not be terminated without prior notice and including

accommodations intermediary services provided in connection with other services provided

under this clause;

(3) nonresidential parking services, whether on a contractual, hourly, or other periodic

basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its members

sports and athletic facilities, without regard to whether a separate charge is assessed for use

of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public on

the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership dues.

Sports and athletic facilities include golf courses; tennis, racquetball, handball, and squash

courts; basketball and volleyball facilities; running tracks; exercise equipment; swimming

pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials by a third party, excluding delivery of aggregate

material used in road construction; and delivery of concrete block by a third party if the

delivery would be subject to the sales tax if provided by the seller of the concrete block.

For purposes of this clause, "road construction" means construction of:

(i) public roads;

(ii) cartways; and

(iii) private roads in townships located outside of the seven-county metropolitan area

up to the point of the emergency response location sign; and

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,

and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,

drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not

include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services provided

by coin operated facilities operated by the customer, and rustproofing, undercoating, and

towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting services and pest

control and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not including

services performed within the jurisdiction they serve by off-duty licensed peace officers as

defined in section
626.84, subdivision 1
, or services provided by a nonprofit organization

or any organization at the direction of a county for monitoring and electronic surveillance

of persons placed on in-home detention pursuant to court order or under the direction of the

Minnesota Department of Corrections;

(v) pet grooming services;

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(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting

and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor plant

care; tree, bush, shrub, and stump removal, except when performed as part of a land clearing

contract as defined in section
297A.68, subdivision 40
; and tree trimming for public utility

lines. Services performed under a construction contract for the installation of shrubbery,

plants, sod, trees, bushes, and similar items are not taxable;

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(vii)
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(vi)
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massages, except when provided by a licensed health care facility or professional

or upon written referral from a licensed health care facility or professional for treatment of

illness, injury, or disease; and

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(viii)
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(vii)
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the furnishing of lodging, board, and care services for animals in kennels and

other similar arrangements, but excluding veterinary and horse boarding services.

(h) A sale and a purchase includes the furnishing for a consideration of tangible personal

property or taxable services by the United States or any of its agencies or instrumentalities,

or the state of Minnesota, its agencies, instrumentalities, or political subdivisions.

(i) A sale and a purchase includes the furnishing for a consideration of

telecommunications services, ancillary services associated with telecommunication services,

and pay television services. Telecommunication services include, but are not limited to, the

following services, as defined in section
297A.669
: air-to-ground radiotelephone service,

mobile telecommunication service, postpaid calling service, prepaid calling service, prepaid

wireless calling service, and private communication services. The services in this paragraph

are taxed to the extent allowed under federal law.

(j) A sale and a purchase includes the furnishing for a consideration of installation if the

installation charges would be subject to the sales tax if the installation were provided by

the seller of the item being installed.

(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer to a

customer when (1) the vehicle is rented by the customer for a consideration, or (2) the motor

vehicle dealer is reimbursed pursuant to a service contract as defined in section
59B.02,

subdivision
11.

(l) A sale and a purchase includes furnishing for a consideration of specified digital

products or other digital products or granting the right for a consideration to use specified

digital products or other digital products on a temporary or permanent basis and regardless

of whether the purchaser is required to make continued payments for such right. Wherever

the term "tangible personal property" is used in this chapter, other than in subdivisions 10

and 38, the provisions also apply to specified digital products, or other digital products,

unless specifically provided otherwise or the context indicates otherwise.

(m) The sale of the privilege of admission under section
297A.61, subdivision 3
,

paragraph (g), clause (1), to a place of amusement, recreational area, or athletic event

includes all charges included in the privilege of admission's sales price, without deduction

for amenities that may be provided, unless the amenities are separately stated and the

purchaser of the privilege of admission is entitled to add or decline the amenities, and the

amenities are not otherwise taxable.

(n) A sale and purchase includes the transfer for consideration of a taxable cannabis

product as defined in section
295.81, subdivision 1
, paragraph (r).

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EFFECTIVE DATE.

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This section is effective for sales and purchases made after June

30, 2026.

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Sec. 2.
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REPEALER.
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Minnesota Statutes 2024, sections 297A.67, subdivision 25; and 297A.68, subdivision

40,

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are repealed.

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EFFECTIVE DATE.

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This section is effective for sales and purchases made after June

30, 2026.

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APPENDIX

Repealed Minnesota Statutes: 26-07535

297A.67 GENERAL EXEMPTIONS.

Subd. 25.

Maintenance of cemetery grounds.

Lawn care and related services used in the maintenance of cemetery grounds are exempt. For purposes of this subdivision, "lawn care and related services" means the services listed in section
297A.61, subdivision 3
, paragraph (g), clause (6), item (vi), and "cemetery" means a cemetery for human burial.

297A.68 BUSINESS EXEMPTIONS.

Subd. 40.

Land clearing.

Tree, bush, shrub, and stump removal are exempt when sold to contractors or subcontractors as part of a land clearing contract. For purposes of this subdivision, "land clearing contract" means a contract for the removal of trees, bushes, and shrubs, including the removal of roots and stumps, to develop a site. This exemption does not apply to land clearing of a portion of a site to allow for remodeling, improvement, or expansion of an existing structure.