1.1.................... moves to amend H.F. No. 359 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 4, is amended to
1.4read:
1.5    Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
1.6purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
1.7course of business as defined in subdivision 21.
1.8    (b) A sale of property used by the owner only by leasing it to others or by holding it
1.9in an effort to lease it, and put to no use by the owner other than resale after the lease or
1.10effort to lease, is a sale of property for resale.
1.11    (c) A sale of master computer software that is purchased and used to make copies for
1.12sale or lease is a sale of property for resale.
1.13    (d) A sale of building materials, supplies, and equipment to owners, contractors,
1.14subcontractors, or builders for the erection of buildings or the alteration, repair, or
1.15improvement of real property is a retail sale in whatever quantity sold, whether the sale is
1.16for purposes of resale in the form of real property or otherwise.
1.17    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
1.18for installation of the floor covering is a retail sale and not a sale for resale since a sale
1.19of floor covering which includes installation is a contract for the improvement of real
1.20property.
1.21    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
1.22for installation of the items is a retail sale and not a sale for resale since a sale of
1.23shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
1.24the improvement of real property.
1.25    (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
1.26is not considered a sale of property for resale.
2.1    (h) A sale of tangible personal property utilized or employed in the furnishing or
2.2providing of services under subdivision 3, paragraph (g), clause (1), including, but not
2.3limited to, property given as promotional items, is a retail sale and is not considered a
2.4sale of property for resale.
2.5    (i) A sale of tangible personal property used in conducting lawful gambling under
2.6chapter 349 or the State Lottery under chapter 349A, including, but not limited to,
2.7property given as promotional items, is a retail sale and is not considered a sale of
2.8property for resale.
2.9    (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
2.10dispense goods or services, including, but not limited to, coin-operated devices, is a retail
2.11sale and is not considered a sale of property for resale.
2.12    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
2.13payment becomes due under the terms of the agreement or the trade practices of the
2.14lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01,
2.15subdivision 11 , but excluding vehicles with a manufacturer's gross vehicle weight rating
2.16greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
2.17the lease is executed.
2.18    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
2.19title or possession of the tangible personal property.
2.20    (m) A sale of a bundled transaction in which one or more of the products included
2.21in the bundle is a taxable product is a retail sale, except that if one of the products
2.22is a telecommunication service, ancillary service, Internet access, or audio or video
2.23programming service, and the seller has maintained books and records identifying through
2.24reasonable and verifiable standards the portions of the price that are attributable to the
2.25distinct and separately identifiable products, then the products are not considered part of a
2.26bundled transaction. For purposes of this paragraph:
2.27    (1) the books and records maintained by the seller must be maintained in the regular
2.28course of business, and do not include books and records created and maintained by the
2.29seller primarily for tax purposes;
2.30    (2) books and records maintained in the regular course of business include, but are
2.31not limited to, financial statements, general ledgers, invoicing and billing systems and
2.32reports, and reports for regulatory tariffs and other regulatory matters; and
2.33    (3) books and records are maintained primarily for tax purposes when the books
2.34and records identify taxable and nontaxable portions of the price, but the seller maintains
2.35other books and records that identify different prices attributable to the distinct products
2.36included in the same bundled transaction.
3.1(n) A sale of motor vehicle repair paint and supplies by a motor vehicle repair
3.2or body shop business is a retail sale and the sales tax is imposed on the gross receipts
3.3from the retail sale of the paint and supplies. The motor vehicle repair or body shop may
3.4multiply the number of labor hours by a rate of consideration for the paint and supplies
3.5used in the repair of the motor vehicle in order to calculate the sales price of the paint and
3.6supplies. If this method does not fairly reflect the taxable amount, the taxpayer may
3.7petition the commissioner for the use of another method, if that method fairly reflects the
3.8gross receipts from the retail sale of the paint and supplies that become part of a repaired
3.9motor vehicle or are consumed in repairing motor vehicles. This clause does not apply to
3.10wholesale transactions at an auto auction facility.
3.11EFFECTIVE DATE.This section is effective for sales and purchases made after
3.12June 30, 2011.

3.13    Sec. 2. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision
3.14to read:
3.15    Subd. 47. Motor vehicle repair paint and supplies. "Motor vehicle repair paint"
3.16includes primer, body paint, clear coat, and paint thinner used to paint motor vehicles, as
3.17defined in section 297B.01. "Motor vehicle repair supplies" are items that become a part
3.18of a repaired motor vehicle or are consumed in repairing the motor vehicle at retail, and
3.19include abrasives, battery water, body filler or putty, bolts and nuts, brake fluid, buffing
3.20pads, chamois, cleaning compounds, degreasing compounds, glaze, grease, grinding discs,
3.21hydraulic jack oil, lubricants, masking tape, oxygen and acetylene, polishes, rags, razor
3.22blades, sandpaper, sanding discs, scuff pads, sealer, solder, solvents, striping tape, tack
3.23cloth, thinner, waxes, and welding rods. Motor vehicle repair supplies do not include
3.24items that are not used directly on the motor vehicle, such as floor dry, which is used to
3.25clean the shop, or cleaning compounds and rags that are used to clean tools and equipment
3.26or the shop and are not used to clean the motor vehicle.
3.27EFFECTIVE DATE.This section is effective for sales and purchases made after
3.28June 30, 2011.

3.29    Sec. 3. Minnesota Statutes 2010, section 297A.68, is amended by adding a subdivision
3.30to read:
3.31    Subd. 42. Motor vehicle repair paint and supplies. Paint and supplies, as
3.32defined in section 297A.68, subdivision 47, that are purchased by a motor vehicle repair
3.33or body shop business in providing repair services on motor vehicles, as defined in
4.1section 297B.01, at retail and become part of a repaired motor vehicle or are consumed
4.2in repairing a motor vehicle are exempt.
4.3EFFECTIVE DATE.This section is effective for sales and purchases made after
4.4June 30, 2011."
4.5Amend the title accordingly