HomeMy WebLinkAboutCHAPTER 129 CHAPTER 129. SALES TAX
Updated 2015 129-1
129. SALES TAX
129.01. Definitions. Subdivision 1. The following words, terms, and phrases when
used in this ordinance shall have the meanings ascribed to them in this section except where
the context clearly indicates a different meaning.
Subd. 2. "City" means the City of Rochester.
Subd. 3. "Person" includes any individual, partner, officer, director, firm, partnership,
joint venture, limited liability company, association, cooperative, social club, fraternal
organization, municipal or private corporation whether organized for profit or not, estate,
trusts, business trusts, receiver, trustee, syndicate, the United States, the state of Minnesota,
any political subdivision of Minnesota, or any other group or combination acting as a unit, and
the plural as well as the singular number. As used in the preceding sentence, the term
"person" includes, but is not limited to, directors and officers of corporations, governors and
managers of a limited liability company, or members of partnerships who, either individually or
jointly with others, have the control, supervision or responsibility of filing returns and making
payment of the amount of tax imposed by this ordinance. "Person" shall also include any
agent or consignee of any individual or organization enumerated in this subdivision.
Subd. 4. A "sale" and a "purchase" includes, but is not limited to, each of the following
transactions:
(a) Any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, and the leasing of or the granting of a license to use or
consume tangible personal property other than manufactured homes used for
residential purposes for a continuous period of 30 days or more, for a consideration in
money or by exchange or barter;
(b) 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;
(c) The furnishing, preparing, or serving for a consideration of food, meals, or drinks.
"Sale" or "purchase" does not include:
(1) meals or drinks served to patients, inmates, or persons residing at hospitals,
sanitariums, nursing homes, senior citizens homes, and correctional, detention, and
detoxification facilities;
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(2) meals or drinks purchased for and served exclusively to individuals who are
60 years of age or over and their spouses or to the handicapped and their spouses by
governmental agencies, nonprofit organizations, agencies, or churches or pursuant to
any program funded in whole or part through 42 USCA sections 3001 through 3045,
wherever delivered, prepared or served; or
(3) meals and lunches served at public and private schools, universities, or
colleges. Notwithstanding section 129.25, subdivision 1(a), taxable food or meals
include, but are not limited to, the following:
(i) food or drinks sold by the retailer for immediate consumption on the
retailer's premises. Food and drinks sold within a building or grounds which
require an admission charge for entrance are presumed to be sold for
consumption on the premises;
(ii) food or drinks prepared by the retailer for immediate consumption either
on or off the retailer's premises. For purposes of this subdivision, "food or
drinks prepared for immediate consumption" includes any food product upon
which an act of preparation including, but not limited to, cooking, mixing,
sandwich making, blending, heating, or pouring has been performed by the
retailer so the food product may be immediately consumed by the purchaser;
(iii) ice cream, ice milk, frozen yogurt products, or frozen novelties sold in
single or individual servings including cones, sundaes, and snow cones. For
purposes of this subdivision, "single or individual servings" does not include
products when sold in bulk containers or bulk packaging;
(iv) soft drinks and other beverages including all carbonated and
noncarbonated beverages or drinks sold in liquid form except beverages or
drinks which contain milk or milk products, beverages or drinks containing 15 or
more percent fruit juice, and noncarbonated and noneffervescent bottled water
sold in individual containers of one-half gallon or more in size;
(v) gum, candy, and candy products, except when sold for fundraising
purposes by a nonprofit organization that provides educational and social
activities primarily for young people 18 years of age and under;
(vi) ice;
(vii) all food sold from vending machines;
(viii) all food for immediate consumption sold from concession stands and
vehicles;
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(ix) party trays;
(x) all meals and single servings of packaged snack food sold in restaurants
and bars; and
(xi) bakery products:
(A) prepared by the retailer for consumption on the retailer's premises;
(B) sold at a place that charges admission;
(C) sold from vending machines; or
(D) sold in single or individual servings from concession stands, vehicles,
bars, and restaurants. For purposes of this subdivision, "single or
individual servings" does not include products when sold in bulk
containers or bulk packaging.
For purposes of this subdivision, "premises" means the total space and facilities,
including buildings, grounds, and parking lots that are made available or that are
available for use by the retailer or customer for the purpose of sale or consumption of
prepared food and drinks. The premises of a caterer is the place where the catered
food or drinks are served;
(d) The granting of the privilege of admission to places of amusement, recreational
areas, or athletic events, except a world championship football game sponsored by the
national football league, and the privilege of having access to and the use of amusement
devices, tanning facilities, reducing salons, steam baths, turkish baths, health clubs, and spas
or athletic facilities;
(e) The furnishing for a consideration of lodging and related services by a hotel,
rooming house, tourist court, motel or trailer camp and of the granting of any similar license to
use real property other than the renting or leasing thereof for a continuous period of 30 days
or more;
(f) The furnishing for a consideration of electricity, gas, water, or steam for use or
consumption within this state, or local exchange telephone service, intrastate toll service, and
interstate toll service, if that service originates from and is charged to a telephone located in
this state. Telephone service does not include services purchased with prepaid telephone
calling cards. Telephone service includes paging services and private communication
service, as defined in United States Code, title 26, section 4252(d), as amended through
December 31, 1991, except for private communication service purchased by an agent acting
on behalf of the state lottery. The furnishing for a consideration of access to telephone
services by a hotel to its guests is a sale under this clause.
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Sales by municipal corporations in a proprietary capacity are included in the provisions of this
clause. The furnishing of water and sewer services for residential use shall not be considered
a sale. The sale of natural gas to be used as a fuel in vehicles propelled by natural gas shall
not be considered a sale for the purposes of this section;
(g) The furnishing for a consideration of cable television services, including charges for
basic service, charges for premium service, and any other charges for any other pay-per-view,
monthly, or similar television services;
(h) The furnishing for a consideration of parking services, whether on a contractual,
hourly, or other periodic basis, except for parking at a meter;
(i) The furnishing for a consideration of services listed in this paragraph:
(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 and
exterminating services;
(iv) detective services, security services, 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 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;
(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; 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) 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
(viii) the furnishing for consideration of lodging, board and care services for
animals in kennels and other similar arrangements, but excluding veterinary and horse
boarding services.
The services listed in this paragraph are taxable under section 129.02 if the service is
performed wholly within the City of Rochester or if the service is performed partly within and
partly without the City of Rochester and more of the service is performed within the City of
Rochester, based on the cost of performance. In applying the provisions of this chapter, the
terms "tangible personal property" and "sales at retail" include taxable services and the
provision of taxable services, unless specifically provided otherwise. Services performed by
an employee for an employer are not taxable under this paragraph. Services performed by a
partnership or association for another partnership or association are not taxable under this
paragraph 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 this section, "affiliated group of
corporations" includes those entities that would be classified as a member of an affiliated
group under United States Code, title 26, section 1504, as amended through December 31,
1987, and who are eligible to file a consolidated tax return for federal income tax purposes;
(j) A "sale" and a "purchase" includes the transfer of computer software, meaning
information and directions that dictate the function performed by data processing equipment.
A "sale" and a "purchase" does not include the design, development, writing, translation,
fabrication, lease, or transfer for a consideration of title or possession of a custom computer
program; and
(k) The granting of membership in a club, association, or other organization if:
(1) 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
(2) use of the sports and athletic facilities is not made available to the general
public on the same basis as it is made available to members.
Granting of membership includes both one-time 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. The provisions of this
paragraph do not apply to camps or other recreation facilities owned and operated by an
exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986, as
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amended through December 31, 1992, for educational and social activities for young
people primarily age 18 and under.
Subd. 5.(a) A "retail sale" or "sale at retail" means a sale for any purpose other than
resale in the regular course of business.
(b) Property utilized by the owner only by leasing such property to others or by
holding it in an effort to so lease it, and which is put to no use by the owner other than
resale after such lease or effort to lease, shall be considered property purchased for resale.
(c) Master computer software programs that are purchased and used to make
copies for sale or lease are considered property purchased for resale.
(d) Sales of building materials, supplies and equipment to owners, contractors,
subcontractors or builders for the erection of buildings or the alteration, repair or
improvement of real property are "retail sales" or "sa les at retail" in whatever quantity sold
and whether or not for purpose of resale in the form of real property or otherwise.
(e) A sale of carpeting, linoleum, or other similar floor covering which includes
installation of the carpeting, linoleum, or other similar floor covering is a contract for the
improvement of real property.
(f) A sale of shrubbery, plants, sod, trees, and similar items that includes installation
of the shrubbery, plants, sod, trees, and similar items is a contract for the improvem ent of
real property.
(g) Aircraft and parts for the repair thereof purchased by a nonprofit, incorporated
flying club or association utilized solely by the corporation by leasing such aircraft to
shareholders of the corporation shall be considered prope rty purchased for resale. The
leasing of the aircraft to the shareholders by the flying club or association shall be
considered a sale. Leasing of aircraft utilized by a lessee for the purpose of leasing to
others, whether or not the lessee also utilizes the aircraft for flight instruction where no
separate charge is made for aircraft rental or for charter service, shall be considered a
purchase for resale; provided, however, that a proportionate share of the lease payment
reflecting use for flight instruction or charter service is subject to tax pursuant to section
129.15.
(h) Tangible personal property that is awarded as prizes shall not be considered
property purchased for resale.
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(i) Tangible personal property that is utilized or employed in the furnishing or
providing of services under section 129.01, subdivision 4, paragraph (d), or in conducting
lawful gambling under chapter 349 or the state lottery under chapter 349A, including
property given as promotional items, shall not be considered property purchased for resale.
Machines, equipment, or devices that are used to furnish, provide, or dispense goods or
services, including coin-operated devices, shall not be considered property purchased for
resale.
Subd. 6. "Storage" includes any keeping or retention in the city for any purpose except
sale in the regular course of business or subsequent use solely outside the city of tangible
personal property.
Subd. 7. "Use" includes the exercise of any right or power over tangible personal property,
or tickets or admissions to places of amusement or athletic events, purchased from a retailer
incident to the ownership of any interest in that property except that it does not include the
sale of that property in the regular course of business. "Use" includes the consumption of
printed materials which are consumed in the creation of nontaxable advertising that is
distributed, either directly or indirectly, within the City of Rochester.
Subd. 8. "Storage" and "use" do not include the keeping or retaining in a public
warehouse of tangible personal property or tickets or admissions to places of amusement
or athletic events when shipped or brought into the City by common carrier, for the purpo se
of subsequently being transported outside the City and thereafter used solely outside the
City, except in the course of interstate commerce.
Subd. 9. "Gross receipts" means the total amount received, in money or otherwise, for all
sales at retail as measured by the sales price. Gross receipts from sales may, at the option
of the taxpayer, be reported on the cash basis as the consideration is received or on the
accrual basis as sales are made.
Subd. 10. "Sales price" means the total consideration valued in money, for a retail sale
whether paid in money or otherwise, excluding therefrom any amount allowed as credit for
tangible personal property taken in trade for resale, without deduction for the cost of the
property sold, cost of materials used, labor or service cost, interest, or discount allowed after
the sale is consummated, the cost of transportation incurred prior to the time of sale, any
amount for which credit is given to the purchaser by the seller, or any other expense
whatsoever. A deduction may be made for charges of up to 15 percent in lieu of tips, if the
consideration for such charges is separately stated. No deduction shall be allowed for
charges for services that are part of a sale. A deduction may also be made for interest,
financing, or carrying charges, charges for labor or services used in installing or applying the
property sold or transportation charges if the transportation occurs after the retail sale of the
property only if the consideration for such charges is separately stated.
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There shall not be included in "sales price" cash discounts allowed and taken on sales or the
amount refunded either in cash or in credit for property returned by purchasers.
Subd. 11. "Tangible personal property" means corporeal personal pro perty of any
kind whatsoever, including property which is to become real property as a result of
incorporation, attachment, or installation following its acquisition. Personal property does
not include:
(a) large ponderous machinery and equipment used in a business or
production activity which at common law would be considered to be real property;
(b) property which is subject to an ad valorem property tax;
(c) property described in section Minn. Stat. Section 272.02, subdivision 1,
clause (8), paragraphs (a) to (d);
(d) property described in section Minn. Stat. Section 272.03, subdivision 2,
clauses (3) and (5).
Tangible personal property includes computer software, whether contained on tape,
discs, cards, or other devices. Tangible personal p roperty also includes prepaid telephone
calling cards. For purposes of this chapter, “prepaid telephone calling card” means any
card or other similar arrangement, including prepaid authorization numbers, which permit
its holder to obtain telephone services and pay for such services in advance.
Subd. 12. "Commissioner" means the commissioner of revenue of the state of
Minnesota.
Subd. 13. "Agricultural production", as used in section 129.25, subdivision 1(h) of this
ordinance includes, but is not limited to, horticulture; floriculture; raising of pets, fur bearing
animals, research animals, farmed cervidae, as defined in Minn. Stat. Section 17.451,
subdivision 2, llamas, as defined in Minn. Stat. Section 17.455, subdivision 2, ratitae, as
definded in Minn. Stat. Section 17.453, subdivions 3, and horses.
Subd. 14. "Retailer" includes every person engaged in making sales at retail as herein
defined.
Subd. 15. "Handicapped" means a permanent and total disability as defined in
Minnesota Statutes, Section 273.13, subd. 22.
<Text of subd. 16 effective for sales made after June 30, 2000>
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Subd. 16. "Farm machinery" means new or used machinery, equipment, implements,
accessories, and contrivances used directly and principally in the production for sale, but not
including the processing, of livestock, dairy animals, dairy products, poultry and poultry
products, fruits, vegetables, forage, grains and bees and apiary products. "Farm machinery"
includes:
(1) machinery for the preparation, seeding or cultivation of soil for growing agricultural
crops and sod, harvesting and threshing of agricultural products, harvesting or mowing
of sod, and certain machinery for dairy, livestock and poultry farms;
(2) barn cleaners, milking systems, grain dryers, automatic feeding systems and similar
installations, whether or not the equipment is installed by the seller and becomes part
of the real property;
(3) irrigation equipment sold for exclusively agricultural use, including pumps, pipe
fittings, valves, sprinklers and other equipment necessary to the operation of an
irrigation system when sold as part of an irrigation system, whether or not the
equipment is installed by the seller and becomes part of the real property;
(4) logging equipment, including chain saws used for commercial logging;
(5) fencing used for the containment of farmed cervidae, as defined in section 17.451,
subdivision 2;
(6) primary and backup generator units used to generate electricity for the purpose of
operating farm machinery, as defined in this subdivision, or providing light or space
heating necessary for the production of livestock, dairy animals, dairy products, or
poultry and poultry products; and
(7) aquaculture production equipment as defined in subdivision 19.
Repair or replacement parts for farm machinery shall not be included in the definition of
farm machinery. Tools, shop equipment, grain bins, feed bunks, fencing material
except fencing material covered by clause (5), communication equipment and other
farm supplies shall not be considered to be farm machinery. "Farm machinery" does
not include motor vehicles taxed under chapter 129.44, snowmobiles, snow blowers,
lawn mowers except those used in the production of sod for sale, garden-type tractors
or garden tillers and the repair and replacement parts for those vehicles and machines.
Subd. 17. "Director" means the director of the department of finance of the city or the
commissioner of revenue of the state of Minnesota, acting as the director's agent under the
authority of an agreement entered into between the city and the state of Minnesota pursuant
to Laws 1998, Chapter 389, Article 8, Section 43, and section 129.42 of this ordinance.
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Subd. 18. "Custom computer program" means a computer program prepared to the
special order of the customer, either in the form of written procedures or in the form of storage
media on which, or in which, the program is recorded, or any required documentation or
manuals designed to facilitate the use of the custom computer program transferred. It
includes those services represented by separately stated charges for modifications to an
existing prewritten program that are prepared to the special order of the customer. It does not
include a "canned" or prewritten computer program that is held or existing for general or
repeated sale or lease, even if the prewritten or "canned" program was initially developed on a
custom basis or for in-house use. Modification to an existing prewritten program to meet the
customer's needs is custom computer programming only to the extent of the modification. For
purposes of this subdivision:
(1) "Storage media" includes punched cards, tapes, discs, diskettes, or drums on which
computer programs may be embodied or stored;
(2) "Computer" does not include tape-controlled automatic drilling, milling, or other
manufacturing machinery or equipment; and,
(3) "Computer program" means the complete plan for the solution of a problem, such as
the complete sequence of automatic data processing equipment instructions necessary to
solve a problem and includes both systems and application programs and subdivisions,
such as assemblers, compilers, routines, generators, and utility programs.
Subd. 19. "Aquaculture production equipment" means new or used machinery,
equipment, implements, accessories, and contrivances used directly and principally in
aquaculture production. Aquaculture production equipment includes: augers and blowers,
automatic feed systems, manual feeding equipment, shockers, gill nets, trap nets, seines, box
traps, round nets and traps, net pens, dip nets, net washers, floating net supports, floating
access walkways, net supports and walkways, growing tanks, holding tanks, troughs,
raceways, transport tanks, egg taking equipment, egg hatcheries, egg incubators, egg
baskets and troughs, egg graders, egg counting equipment, fish counting equipment, fish
graders, fish pumps and loaders, fish elevators, air blowers, air compressors, oxygen
generators, oxygen regulators, diffusers and injectors, air supply equipment, oxygenation
columns, water coolers and heaters, heat exchangers, water filter systems, water purification
systems, waste collection equipment, feed mills, portable scales, feed grinders, feed mixers,
feed carts and trucks, power feed wagons, fertilizer spreaders, fertilizer tanks, forage
collection equipment, land levelers, loaders, post hole diggers, disc, harrow plow, and water
diversion devices. Repair or replacement parts for aquaculture production equipment shall
not be included in the definition of aquaculture production equipment.
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Subd. 20. CAPITAL EQUIPMENT. (a) Capital equipment means machinery and
equipment purchased or leased for use in this state and used by the purchaser or lessee
primarily for manufacturing, fabricating, mining, or refining tangible personal property to be
sold ultimately at retail and for electronically transmitting results retrieved by a customer of
an on-line computerized data retrieval system.
(b) Capital equipment includes all machinery and equipment that is essential to the
integrated production process. Capital equipment includes, but is not limited to:
(1) machinery and equipment used or required to operate, control, or regulate the
production equipment;
(2) machinery and equipment used for research and development, design, quality
control, and testing activities;
(3) environmental control devices that are used to maintain conditions such as
temperature, humidity, light, or air pressure when those conditions are
essential to and are part of the production process;
(4) materials and supplies necessary to construct and install machinery or
equipment;
(5) repair and replacement parts, including accessories, whether purchased as
spare parts, repair parts, or as upgrades or modifications to machinery or
equipment;
(6) materials used for foundations that support machinery or equipment;
(7) materials used to construct and install special purpose buildings used in the
production process; or
(8) ready-mixed concrete trucks in which the ready-mixed concrete is mixed as
part of the delivery process.
(c) Capital equipment does not include the following:
(1) motor vehicles taxed under chapter 129.24;
(2) machinery or equipment used to receive or store raw materials;
(3) building materials;
(4) machinery or equipment used for nonproduction purposes, including, but
not limited to, the following: machinery and equipment used for plant
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security, fire prevention, first aid, and hospital stations; machinery and
equipment used in support operations or for administrative purposes;
machinery and equipment used solely for pollution control, prevention, or
abatement; and machinery and equipment used in plant cleaning, disposal of
scrap and waste, plant communications, space heating, lighting, or saf ety;
(5) "farm machinery" as defined by subdivision 15, and "aquaculture
production equipment" as defined by subdivision 19; or
(6) any other item that is not essential to the integrated process of
manufacturing, fabricating, mining, or refining.
(d) For purposes of this subdivision:
(1) "Equipment" means independent devices or tools separate from
machinery but essential to an integrated production process, including
computers and software, used in operating, controlling, or regulating
machinery and equipment; and any subunit or assembly comprising a
component of any machinery or accessory or attachment parts of machinery,
such as tools, dies, jigs, patterns, and molds.
(2) "Fabricating" means to make, build, create, produce, or assemble
components or property to work in a new or different manner.
(3) "Machinery" means mechanical, electronic, or electrical devices, including
computers and software, that are purchased or constructed to be used for the
activities set forth in paragraph (a), beginning with the removal of raw
materials from inventory through the completion of the product, includin g
packaging of the product.
(4) "Manufacturing" means an operation or series of operations where raw
materials are changed in form, composition, or condition by machinery and
equipment and which results in the production of a new article of tangible
personal property. For purposes of this subdivision, "manufacturing" includes
the generation of electricity or steam to be sold at retail.
(5) "Mining" means the extraction of minerals, ores, stone, and peat.
(6) "On-line data retrieval system" means a system whose cumulation of
information is equally available and accessible to all its customers.
(7) "Pollution control equipment" means machinery and equipment used to
eliminate, prevent, or reduce pollution resulting from an activity described in
paragraph (a).
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(8) "Primarily" means machinery and equipment used 50 percent or more of
the time in an activity described in paragraph (a).
(9) "Refining" means the process of converting a natural resource to a
product, including the treatment of water to be sold at retail.
(e) For purposes of this subdivision the requirement that the machinery or
equipment "must be used by the purchaser or lessee" means that the person who
purchases or leases the machinery or equipment must be the one who uses it for the
qualifying purpose. When a contractor buys and installs machinery or equipment as
part of an improvement to real property, only the contractor is
considered the purchaser.
Subd. 21. Special tooling. Special tooling means tools, dies, jigs, patterns, gauges
and other special tools which have value and use only for the buyer and for the use for
which it is made. An item has use or value only to the buyer if the item is not standard
enough to be stocked or ordered from a catalog or other sales literature, but must be
produced in accordance with special requirements peculiar to the buyer and not common
to someone else whose conditions for possible use of the material are reasonably similar
to the buyer's.
Subd. 22. Subdivision Repealed Ordinance #3148 – January 22, 1998.
Subd. 23. Subdivision Repealed Ordinance #3148 – January 22, 1998.
Subd. 24. "Leasing" includes all transfers of possession of tangible personal
property or the use thereof by the lessee for a consideration when title remains with the
lessor at the end of the lease. If a contract designated as a lease binds the lessee for a
fixed term and the lessee is to obtain title at the end of the term of the agreement or has the
option at that time to purchase the property for a nominal amount, the contract is regarded
as a sale and not as a lease. For purposes of this chapter, a lease of tangible personal
property is a series of transactions that impose upon the lessee multiple payment
obligations. A taxable transaction is considered to have occurred when an obligation to
make a lease payment becomes due under the terms of the agreement or trade practices
of the lessor. For purposes of this subdivision, "nominal amount" means an amount so
small, slight, or negligible that it is not economically significant and bears no relation to the
real value of the item being purchased.
129.02. Imposition of Tax. Except as otherwise provided in this chapter, there is
hereby imposed a sales tax of three-quarters of one percent of the gross receipts from sales
at retail, as hereinbefore defined, made by any person in the City. The date of delivery to the
purchaser shall be used to determine the appropriate tax rate. Any tax authorized by this
chapter may not be imposed on political subdivisions of the State of Minnesota. The
provisions of Minn. Stat. §297A.48, local sales tax rules, as the same may be amended from
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time to time, shall apply to the collection of taxes under this chapter.
Section 2. This ordinance shall be effective on January 1, 2016. (4192, 4/20/15)
129.03. Separate statement; collection from purchaser; advertising no tax; minimum;
uniform tax collection methods.
Subdivision 1. The tax shall be stated and charged separately from the sales price or
charge for service insofar as practicable and shall be collected by the seller from the
purchaser and shall be a debt from the purchaser to the seller recoverable at law in the same
manner as other debts.
Subd. 2. In computing the tax to be collected as the result of any transaction amounts of
tax less than one-half of one cent may be disregarded and amounts of tax of one-half cent or
more may be considered an additional cent. If the sales price of any sale at retail is eight
cents or less, no tax shall be collected.
Subd. 3. Agreements between competitive retailers or the adoption of appropriate rules or
regulations by organizations or associations of retailers to provide uniform methods for adding
such tax or the average equivalent thereof, and which do not involve price fixing agreements
otherwise unlawful, are expressly authorized and shall be held not in violation of any laws of
Minnesota prohibiting such agreements. The commissioner may prescribe rules for such
agreements.
129.04. Applications; Member; Form. Every person desiring to engage in the business of
making retail sales within the city shall file with the director an application for a permit. The
director may require any person or class of persons obligated to file a use tax return under
Section 129.27, subdivision 2 of this Code, division 2 of this ordinance, to file an application
for a permit. Every application for a permit shall be made upon a form prescribed by the
director and shall set forth the name under which the applicant intends to transact business,
the location of his place or places of business, and such other information as the director may
require. The application shall be filed by the owner, if a natural person; by a member or
partner, if the owner is an association or partnership; by a person authorized to file the
application, if the owner is a corporation.
129.05. Operator of Flea Markets; Seller's Permits Required. The operator of a flea
market, craft show, antique show, coin show, stamp show, comic book show, conve ntion
exhibit area, or similar selling event, as a prerequisite to renting or leasing space on the
premises owned or controlled by the operator to a person desiring to engage in or conduct
business as a seller, shall obtain evidence that the seller is the holder of a valid seller's
permit issued under Section 129.04, or a written statement from the seller that the seller is
not offering for sale any item that is taxable under this chapter. Flea market, craft show,
antique show, coin show, stamp show, comic book show, convention exhibit area, or similar
selling event, as used in this section, means an activity involving a series of sales sufficient
CHAPTER 129. SALES TAX
Updated 2015 129-15
in number, scope, and character to constitute a regular course of business, and that would
not qualify as an isolated or occasional sale under Section 129.25, subdivision 1, clause
(k).
129.06. Permit. After compliance with sections 129.04 and 129.28 of this chapter, when
security is required, the director shall grant to each applicant a permit. A permit is valid until
cancelled or revoked but is not assignable and is valid only for the person in whose name it is
granted and for the transaction of business at the places designated.
129.065. Cancellation of Permits. The director may cancel a permit when one of the
following conditions occurs:
(1) the permit holder has not filed a sales or use tax return for one year or more;
(2) the permit holder has not reported any sales or use tax liability on the permit holder's
returns for two or more years; or,
(3) the permit holder requests cancellation of the permit.
129.07. Revocation of Permits. Sales tax permits issued under the authority of this
chapter may be revoked pursuant to the provisions of Minn. Stat. Section 297A.07.
129.08. Sales Without Permits, Violations. A person who engages in the business of
making retail sales in the city without the required permit or permits, and each officer of any
corporation which so engages in business, shall be guilty of a misdemeanor.
129.09. Presumption of Tax; Burden of Proof. For the purpose of the proper administration
of this code and to prevent evasion of the tax, it shall be presumed that all gross receipts are
subject to the tax until the contrary is established. The burden of proving that a sale is not a
sale at retail is upon the person who makes the sale, but that person may take from the
purchaser an exemption certificate to the effect that the property purchased is for resale or
that the sale is otherwise exempt from the application of the tax imposed by this code.
129.10. Exemption Certificate, Duty of Retailer. The exemption certificate will
conclusively relieve the retailer from collecting and remitting the tax only if taken in good faith
from a purchaser who holds the permit provided for in section 129.06 of this code.
129.11. Content and Form of Exemption Certificate. The exemption certificate shall be
signed by and bear the name and address of the purchaser, shall indicate the sales tax
account number if any issued to the purchaser and shall indicate the general character of the
property sold by the purchaser in the regular course of business and shall identify the property
purchased. The certificate shall be substantially in such form as the director may prescribe. A
person who has obtained from the commissioner an exemption certificate pursuant to
Minnesota Statutes, Section 297A.11, may use such exemption certificate in lieu
CHAPTER 129. SALES TAX
Updated 2015 129-16
of that required by this chapter.
129.12. Improper Use of Subject of Purchase Obtained with Exemption Certificate. If a
purchaser who gives an exemption certificate makes any use of the subject of the purchase
other than for a purpose exempted under this code, such use shall be deemed a retail sale by
the purchaser as of the time of first use by the purchaser, and the sales price to the purchaser
shall be deemed the gross receipts from such retail sale. If the sole nonexempt use is rental
while holding for sale, the purchaser shall include in the purchaser's gross receipts the
amount of the rental charged. Upon subsequent sale of such property, the seller shall include
the entire amount of gross receipts received therefrom without deduction of amounts
previously received as rentals.
129.13. Use of Exemption Certificate to Evade Tax; Penalty. Any person who gives an
exemption certificate for property which will be used for purposes other than the exemption
claimed with the intent to evade payment to the seller of the amount of the tax applicable to
the transaction shall be subject to a penalty payable to the director of $100 for each
transaction where an improper use of an exemption certificate has occurred.
129.14. Commingling Exemption Certificate Goods. If a purchaser gives an exemption
certificate with respect to the purchase of fungible goods and thereafter commingles these
goods with other fungible goods not so purchased but of such similarity that the identity of the
constituent goods in the commingled mass cannot be determined, sales from the mass of
commingled goods shall be deemed to be sales of the goods so purchased until a quantity of
commingled goods equal to the quantity of purchased goods so commingled has been sold.
129.15. Using, Storing or Consuming Tangible Personal Property; Admissions;
Utilities. Subd. 1. For the privilege of using, storing, distributing, or consuming in the city
tangible personal property, or taxable services purchased for use, storage, or distribution, or
consumption in this city, there is imposed on every person in this city a use tax at the rate
imposed by section 129.02 of the code on the sales price of sales at retail of any of the
aforementioned items made to such person unless the tax imposed by section 129.02 of this
Code was paid on said sales price.
A use tax is imposed on every person who uses, stores, distributes, or consumes
tangible personal property in the city which has been manufactured, fabricated, or assembled
by the person from materials, either within or without this city, at the rate of tax imposed under
section 129.02 of the code on the sales price of sales at retail of the materials contained in the
tangible personal property, unless the tax imposed by section 129.02 was paid on the sales
price.
Subd. 2. A motor vehicle subject to tax under this section shall be taxed at its fair
market value at the time of transport into the city if the motor vehicle was acquired more than
three months prior to its transport into this city.
CHAPTER 129. SALES TAX
Updated 2015 129-17
Subd. 3. Purchases subject to use tax under this section are exempt if (1) the
purchase is made by an individual for personal use, and (2) the total purchases that are
subject to the use tax do not exceed $770 in the calendar year. For purposes of this
subdivision, "personal use" includes purchases for gifts. If an individual makes purchases,
which are subject to use tax, of more than $770 in the calendar year the individual must pay
the use tax on the entire amount. This exemption does not apply to purchases made from
retailers who are required or registered to collect taxes under this chapter.
129.16. Collection and Payment; Penalty. Subdivision 1. Liability for the payment of the
use tax is not extinguished until the tax has been paid to the City of Rochester or to the State
of Minnesota on the City's behalf. However, a receipt from a retailer given to the purchaser
pursuant to section 297A.16 relieves the purchaser of further liability for the tax to which the
receipt refers, unless the purchaser knows or has reason to know that the retailer did not have
a permit to collect the tax.
Subd. 2. Refund; appropriation. The seizure and refund provisions of Minn. Stat.
section 297A.15 shall apply to those tax amounts imposed and collected pursuant to section
129.02 of this chapter.
Subd. 3. A retailer making retail sales from outside this state to a destination within the
City of Rochester shall meet the registration requirements of Minn. Stat. Ch. 297A.
129.17. Collection of Tax at Time of Sale. Any retailer who is required under section
129.21 of this Code, or authorized by the director to collect the use tax upon making retail
sales of any items enumerated in sections 129.01 to 129.42 and not exempted under sections
129.01 to 129.42 to which the use tax applies, shall at the time of making such sales collect
the use tax from the purchaser and give to the purchaser a receipt therefore in the form of a
notation on the sales slip or receipt for the sale price or in such other form as prescribed by
the director. Any such retailer shall not collect the tax from a purchaser who furnishes to such
retailer a copy of a certificate issued by the director authorizing such purchaser to pay any
sales or use tax due on purchases made by such purchaser directly to the director. The tax
collected by such retailer pursuant to the provisions of this section shall be remitted to the
director as provided in other sections of this chapter.
129.18. Status as Debt. The use tax required to be collected by the retailer shall be a
debt from the purchaser to the retailer recoverable at law in the same manner as other debts.
129.19. Minimum Tax. In computing the tax to be collected as the result of any
transaction amounts of tax less than one-half of one cent may be disregarded and amounts of
tax of one-half cent or more may be considered an additional cent.
129.20. Repealed August 18, 1992, per Ordinance Number 2835
CHAPTER 129. SALES TAX
Updated 2015 129-18
129.21. Registration to Collect Use Tax. Subdivision 1. "Retailer maintaining a place
of business in this city", or any like term, shall mean any retailer having or maintaining within
this city, directly or by a subsidiary, an office, place of distribution, sales or sample room or
place, warehouse, or other place of business, or having any representative, agent,
salesperson, canvasser, or solicitor operating within this city under the authority of the retailer
or its subsidiary, for any purpose, including the repairing, selling, delivering, installing, or
soliciting or orders for the retailer’s goods or services, or the leasing of tangible personal
property located in the city, whether the place of business or agent, representative,
salesperson, canvasser, or solicitor is located in the state permanently or temporarily, or
whether or not such retailer or subsidiary is authorized to do business within this city.
Subd. 2. Destination. The destination of a sale is the location to which the retailer
makes delivery of the property sold, or causes the property to be delivered, to the purchaser
of the property, or to the agent or designee of the purchaser by any means of delivery,
including the United States Postal Service, a common carrier, or a contract carrier.
Subd. 3. Registration. A retailer making retail sales from outside this state to a
destination within this city and state shall comply with the registration provisions of Minn. Stat.
Section 297A.21.
129.22. Presumption of Purpose of Sale, Burden of Proof. For the purpose of the proper
administration of sections 129.01 to 129.48 and to prevent evasion of the use tax and the duty
to collect the use tax, it shall be presumed that all retail sales for delivery in Rochester,
Minnesota are for storage, use or other consumption in Rochester, Minnesota until the
contrary is established. The retailer who makes the sale may take from the purchaser an
exemption certificate in accordance with sections 129.09 to 129.13 of this code.
129.23. Property Brought to the City; Presumption; Burden of Proof. Any purchaser of
tangible personal property or any items enumerated in section 129.15 which are shipped or
brought to Rochester, Minnesota by the purchaser shall have the burden of proving that the
same were not purchased from a retailer for storage, use or consumption in Rochester,
Minnesota.
129.24. Taxes in Other States. If any article of tangible personal property or any item
enumerated in section 129.15 of this Code has already been subjected to a tax by any other
state in respect of its sale, storage, use or other consumption in an amount less than the sum
of the tax imposed by this ordinance and that imposed by Minnesota Statutes, Chapter 297A
and acts amendatory thereto, then as to the person who paid the tax in such other state, the
provisions of section 129.15 shall apply at a rate measured by the difference between the sum
of the rates imposed under this ordinance and under Minnesota Statutes, Chapter 297A and
acts amendatory thereto, and the rate by which the previous tax was computed. If such tax
imposed in such other state was equal to or greater than the tax imposed by the city and by
the state of Minnesota, then no tax shall be due from such person under section 129.15 of this
chapter.
CHAPTER 129. SALES TAX
Updated 2015 129-19
129.25. Repealed effective January 1, 2000.
129.251. Repealed effective January 1, 2000.
129.252. Repealed effective January 1, 2000.
129.253. Repealed effective January 1, 2000.
129.254. Repealed effective January 1, 2000.
129.255. Repealed effective January 1, 2000.
129.256. Repealed effective January 1, 2000.
129.257. Repealed effective January 1, 2000.
129.26. Repealed effective January 1, 2000.
129.27. Repealed effective January 1, 2000.
129.28. Repealed effective January 1, 2000.
129.29. Repealed effective January 1, 2000.
129.30. Repealed effective January 1, 2000.
129.31. Repealed effective January 1, 2000.
129.32. Repealed effective January 1, 2000.
129.33. Repealed effective January 1, 2000.
129.34. Repealed effective January 1, 2000.
129.35. Repealed effective January 1, 2000.
129.36. Repealed effective January 1, 2000.
129.37. Repealed effective January 1, 2000.
129.38. Repealed effective January 1, 2000.
129.39. Repealed by Ordinance No. 2664 on December 4, 1989.
CHAPTER 129. SALES TAX
Updated 2015 129-20
129.40. Deposit of Revenues; Cost of Administration; Termination of
Taxes. Subdivision 1. All of the revenues, including permit fees, interest and
penalties, derived from the sales and use and excise taxes imposed by this
chapter on or after January 1, 1999, shall be deposited by the director in the city
treasury and shall be credited to the fund established to pay the costs imposed
in collecting the taxes imposed herein, and to finance the costs of acquisition
and betterment of the following project:
A. Transportation infrastructure improvements
including regional highway and airport
improvements;
B. Improvements to Mayo Civic Center complex;
C. A municipal water, sewer and storm sewer project
to improve regional ground water quality; and
D. Construction of a regional recreation and sports
center and other higher education facilities available
for both community and student use.
At special elections held on June 24, 1998, and October 4,
2005, city voters approve these projects, the issuance of
general obligation bonds and the payment of debt service
on the bonds.
Subd. 2. The costs of all refunds made under this chapter
shall be paid from the fund set forth in subdivision 1 of this
section.
Subd. 3. The taxes imposed by this chapter shall
terminate on the first day of the month next succeeding a
determination by the city council that sufficient funds have been
received from the taxes to finance capital and administrative costs
of $111,500,000 for the public improvements described in
subdivision 2 and to prepay or retire at maturity the principal,
interest and premium due on any bonds issued for the public
improvements. Any funds remaining after completion of the
improvements and retirement or redemption of the bonds may be
placed in the general fund of the city.
(3742, 11/21/05)
CHAPTER 129. SALES TAX
Updated 2015 129-21
129.41. Repealed effective January 1, 2000.
129.42. Administration: Agreement with Commissioner. The director is hereby
authorized, in the name of the city, to enter into an appropriate agreement or agreements with
the commissioner, to facilitate the issuance of permits, filing and audit of returns, collection of
revenues and issuance of refunds of the taxes and any other administrative matters relating to
the administration of sections 129.01 to 129.42 of this chapter, and the taxes imposed therein.
129.43. Definitions. Subdivision 1. For the purpose of sections 129.43 to 129.47 of
this chapter, the following terms shall have the meaning ascribed to them.
Subd. 2. Motor vehicle” means any of the following as otherwise defined by Minnesota
Statutes, Section 168.011: (a) a “passenger automobile;” (b) a “bus” or “intercity bus;” (c) a
“truck;” (d) a “truck-tractor;” (e) a “motorcycle;” (f) a “van;” (g) a “pickup truck;” (h) a
“recreational vehicle.”
(3872, 6/2/08)
Subd. 3. "Dealer" means a person as defined by Minnesota Statutes, Section 168.011,
subd. 21, and licensed by the commissioner of public safety pursuant to Minnesota Statutes,
Chapter 168, and engaged in the city in the business of selling motor vehicles at retail.
Subd. 4. "Sale, sells, selling, purchase or acquired" means the acts described in
Minnesota Statutes, Section 297B.01, subd. 7.
Subd. 5. "City" means the City of Rochester.
Subd. 6. "Director" means the director of the department of finance of the city.
129.44. Excise Tax Imposed: Certain Motor Vehicle Sales by Dealers. There is
hereby imposed pursuant to the authority of Laws 1998, Chapter 389, Article 8, Section 43, an
excise tax of $20 on each sale of a motor vehicle sold by a dealer in the city.
129.45. Collection of Tax: Dealer's Responsibility. A dealer who sells a motor vehicle
shall collect from the purchaser, at the time of the sale, the tax imposed by sections 129.43 to
129.47 of this chapter. The collection of the tax imposed herein shall be a personal obligation
of the dealer and the proceeds of such tax collected shall be thereafter paid over to the city
under such circumstances as may be established from time to time by the director.
129.46. Authority of Director; Investigatory Powers; Enforcement. Subdivision 1. The
director is authorized to establish rules and procedures to implement the collection of the
excise tax imposed by sections 129.43 to 129.47 of this chapter.
Subd. 2. For the purpose of determining the correctness of any return or of determining
whether any person should have made a return or paid taxes or for the purpose of collection
CHAPTER 129. SALES TAX
Updated 2015 129-22
of any such taxes hereunder, the director shall have power to examine, or cause to be
examined, any books, papers, records, or memoranda, which may be relevant to making such
determinations, whether such books, papers, records, or memoranda, are the property of or in
the possession of such person or any other person. He shall have power to require the
attendance of any person having knowledge or information which may be relevant, to compel
the production of books, papers, records, or memoranda by persons so required to attend, to
take testimony on matters material to such determination, and to administer oaths or
affirmations.
Subd. 3. Any unpaid obligation of a dealer to the city under sections 129.43 to 129.47 of
this chapter may be collected by a judicial proceeding brought in the name of the city in the
district court of Olmsted county.
129.47. Penalties. It is a misdemeanor for a dealer to violate sections 129.43 and 129.45
of this chapter.
129.48. Severability of Provisions. If any section, subdivision, clause or other part of this
chapter be adjudged void or of no effect for any reason whatsoever, such decision shall not
affect the validity of any other portion of this chapter.
(2320, 8/15/83; 2386, 6/30/84; 2396, 7/17/84; 2462, 7/30/85; 2556, 6/1/87; 2576, 12/21/87;
2595, 6/8/88; 2664, 12/4/89; 2685, 03/30/90; 2700, 08\09\90; 2771; 10/7/91; 2835, 8/18/92;
2839, 8/9/92; 2952 8/16/94; 3058, 11/22/96; 3148, 1/22/98; 3217, 12/22/98; 3297 12/6/99;
3742, 11/21/05; 3872, 6/2/08; 4192, 4/20/15)
CHAPTER 129. SALES TAX
Updated 2015 129-23