Certain sales and use tax exemptions repealer, deposit of revenue modifications, and conforming changes provisions

A bill for an act

relating to taxation; sales and use; repealing certain exemptions; making changes

to deposit of revenues; making conforming changes; amending Minnesota Statutes

2024, section 297A.82, subdivision 7, by adding a subdivision; repealing Minnesota

Statutes 2024, section 297A.82, subdivisions 4, 4a.

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

Section 1.

Minnesota Statutes 2024, section 297A.82, is amended by adding a subdivision

to read:

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Subd. 4b.

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Deposit of revenues.

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Tax revenue, including interest and penalties, collected

from the sale or purchase of an aircraft taxable under this chapter must be deposited in the

state treasury and credited to the commissioner of education for the uses allowed under

section 126C.44, subdivision 4, paragraph (a), clauses (2), (5), (6), (8), and (9). For purposes

of this subdivision, "revenue" does not include the revenue, including interest and penalties,

generated by the sales tax imposed under section 297A.62, subdivision 1a, which must be

deposited as provided under the Minnesota Constitution, article XI, section 15.

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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.

Minnesota Statutes 2024, section 297A.82, subdivision 7, is amended to read:

Subd. 7.

Agreement with commissioner of transportation.

Notwithstanding

subdivisions 1 to
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4
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3
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, the commissioner may enter into an agreement with the commissioner

of transportation whereby, upon approval of both commissioners, the commissioner of

transportation will collect the sales tax on aircraft from persons required to register or license

aircraft in this state. For purposes of collecting the tax, the commissioner of transportation

shall act as agent of the commissioner of revenue and shall be subject to all rules not

inconsistent with the provisions of this chapter, that may be prescribed by the commissioner.

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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. 3.
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REPEALER.
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Minnesota Statutes 2024, section 297A.82, subdivisions 4 and 4a,

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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: 26-08010

297A.82 AIRCRAFT; FLIGHT EQUIPMENT; PAYMENT OF TAXES; EXEMPTIONS.

Subd. 4.

Exemptions.

(a) The following transactions are exempt from the tax imposed in this chapter to the extent provided.

(b) The purchase or use of aircraft previously registered in Minnesota by a corporation or partnership is exempt if the transfer constitutes a transfer within the meaning of section 351 or 721 of the Internal Revenue Code.

(c) The sale to or purchase, storage, use, or consumption by a licensed aircraft dealer of an aircraft for which a commercial use permit has been issued pursuant to section
360.654
is exempt, if the aircraft is resold while the permit is in effect.

(d) Air flight equipment when sold to, or purchased, stored, used, or consumed by airline companies, as defined in section
270.071, subdivision 4
, is exempt. For purposes of this subdivision, "air flight equipment" includes airplanes and parts necessary for the repair and maintenance of such air flight equipment, and flight simulators, but does not include aircraft with a maximum takeoff weight of less than 30,000 pounds.

(e) Sales of, and the storage, distribution, use, or consumption of aircraft, as defined in section
360.511
and approved by the Federal Aviation Administration, and which the seller delivers to a purchaser outside Minnesota or which, without intermediate use, is shipped or transported outside Minnesota by the purchaser are exempt, but only if the purchaser is not a resident of Minnesota and provided that the aircraft is not thereafter returned to a point within Minnesota, except in the course of interstate commerce or isolated and occasional use, and will be registered in another state or country upon its removal from Minnesota. This exemption applies even if the purchaser takes possession of the aircraft in Minnesota and uses the aircraft in the state exclusively for training purposes for a period not to exceed ten days prior to removing the aircraft from this state.

(f) The sale or purchase of the following items that relate to aircraft operated under Federal Aviation Regulations, Parts 91 and 135, and associated installation charges: equipment and parts necessary for repair and maintenance of aircraft; and equipment and parts to upgrade and improve aircraft.

Subd. 4a.

Deposit in state airports fund.

Tax revenue, including interest and penalties, collected from the sale or purchase of an aircraft taxable under this chapter must be deposited in the state airports fund established in section
360.017
. For purposes of this subdivision, "revenue" does not include the revenue, including interest and penalties, generated by the sales tax imposed under section
297A.62, subdivision 1a
, which must be deposited as provided under article XI, section 15, of the Minnesota Constitution.