Section 436 Sales and Use Tax and Motor Vehicle Excise Tax
Section 436:00. Authority.
Subd. 1. The Minnesota Legislature has, by Laws of Minnesota 2006, Chapter 259, Article 3, Section 12 (the 'Act"), authorized the City of Owatonna to impose a one-half percent sales and use tax and an excise tax of up to $20 per motor vehicle to assist in the financing of certain transportation projects, park and trail projects, and West Hills complex, fire hall and library projects, all as described in the Act, subject to approval by the voters. The City of Owatonna approved the Act in accordance with applicable law.
Subd. 2. At the special election held November 7, 2006, the voters approved the imposition of a one-half percent sales and use tax for transportation projects in the maximum amount of $4,450,000 (the 'Transportation Projects"), and for West Hills complex, fire hall and library improvements in the maximum amount of $2,823,000 (the 'West Hills Project"), all as described more fully in City Resolution No. 4-06 approved January 17, 2006.
Section 436:05. Definitions. The words, terms and phrases used in this Ordinance shall have the meaning ascribed to them in Minnesota Statues, Section 297A, except where the context clearly indicates otherwise. In addition, the following definitions shall apply:
Subd. 1: Act means Laws of Minnesota 2006, Chapter 259, Article 3, Section 12;
Subd. 2: City means the City of Owatonna;
Subd. 3: Commissioner means the Commissioner of Revenue for the State of Minnesota acting under the authority of an agreement entered into between the City and the State of Minnesota pursuant to the Act, or such other person or entity designated to administer and collect the Owatonna Tax;
Subd. 4: Owatonna Sales and Use Tax means the sales and use tax imposed and collected pursuant to this Ordinance;
Subd. 5: Ordinance means this ordinance in its present form and as subsequently codified in the Owatonna City Code;
Subd. 6: Retailer maintaining a place of business in the City or any like term shall mean any retailer having or maintaining within the City, directly or by a subsidiary or an affiliate, an office, place of distribution, sales or sample room or place, warehouse or other place of business, or having any representative, including an affiliate, agent, sales person, canvasser or solicitor operating in the City under the authority of the Retailer or its subsidiary, for any purpose, including the repairing, selling delivering, installation, or soliciting of order of 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, affiliate, sales person, canvasser, or solicitor, is located in the City permanently or temporarily, or whether or not the Retailer or subsidiary is authorized to do business within the City.
Subd. 7: 'Director" means the Director of the Department of Finance of the City.
Subd. 8: 'Motor vehicle" means any of the following as otherwise defined by Minnesota Statutes, Section 168.011: (i) a 'passenger vehicle"; (ii) a 'bus or 'intercity bus"; (iii) a 'truck"; (iv) a 'truck-tractor"; (v) a 'station wagon"; (vi) a 'van"; (vii) a 'pickup truck"; (viii) 'recreational equipment" which is self-propelled.
Subd. 9: 'Dealer" means a person as defined by Minnesota Statutes, section 168.011, subd. 21, and section 168.27, subd. 1(5), licensed by the commissioner of public safety pursuant to Minnesota Statues, Chapter 168, and engaged in the city in the business of selling motor vehicles at retail. eff. 3/6/07
Section 436:10. Sales and Use Tax. Except as otherwise provided in this Ordinance, there is hereby imposed an additional excise tax in the amount of one-half of one percent of the gross receipts from the sales at retail, and the storage, use, distribution or consumption of goods or services which are taxable, pursuant to Minnesota Statutes, Chapter 297A and occur within the City of Owatonna. The imposition, administration, collection and enforcement of this tax shall be governed by the provisions of Minnesota Statute Chapters 297A, 270C, and 289A.
Section 436:15. Excise Tax. Except as otherwise provided in this Ordinance, there is hereby imposed an excise tax of one-half of one percent, up to a maximum of $20 per sale of motor vehicle at retail. This excise tax shall be in lieu of sales and use tax on sales of motor vehicles. For purposes of this section, 'motor vehicle" and 'dealer" shall have the definition set forth in Section 2, Subdivisions 8 and 9, respectively.
Subd. 1: Collection and Payment of Excise Tax. A dealer who sells a motor vehicle shall collect from the purchaser, at the time of the sale, the tax imposed by Section 4 of this ordinance. 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 on a monthly basis as such amounts are collected.
Subd. 2: Authority of Director; Investigatory Powers; Enforcement. Rules, procedures, and forms to implement the payment of tax imposed in this subdivision shall be established by the Director, and shall be made available to all persons who are or may be liable for the collection of the tax imposed by this subdivision. Any amendments to such rules, procedures, and/or forms shall be sent by the Director by first-class mail to teach person who has made payment to the City of such tax within the preceding twelve months, such mailing to be directed to the name and address shown on the most recent return form.
Subd. 3: Investigations. 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 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. The Director 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. 4: Late Payment. If any tax imposed by this chapter is not paid within the time specified for the payment or an extension thereof, there shall be added thereto a specific penalty equal to ten percent (10%) of the amount remaining unpaid. There shall be a minimum late payment penalty assessed of fifty dollars ($50) if penalties in the aggregate do not exceed that amount.
Subd. 5: Late Filing. In case of any failure to make and file a return within the time prescribed by this chapter, unless it is shown that such failure is not due to willful neglect, there shall be added to the tax, in addition to the penalty provided in Subdivision 4 of this section, a penalty of ten percent (10%) for each thirty (30) day period or fraction there of during which such failure continues, not exceeding twenty-five percent (25%) in the aggregate. There shall be a minimum penalty assessed of one hundred dollars ($100) if penalties in the aggregate do not exceed that amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax, unless the tax has been paid before the discovery of the negligence; in which case, the amount so added shall be collected in the same manner as the tax.
Subd. 6: Interest on Unpaid tax. The amount of tax not timely paid, together with any penalty provided by this chapter, shall bear interest at the rate of 1.5% per month from the date on which such payment is due until the date that payment is made. Any interest and penalty shall be added to the tax and be collected as part thereof.
Subd. 7: Legal Action. Any unpaid obligation of a dealer to the City under Section 4 of this ordinance, including penalties and interest thereon, may be collected by legal action. The City may institute such legal action as it, in its sole discretion, may deem appropriate to cover the amount due plus interest, penalties, and the costs and disbursements of any action.
Subd. 8: Violation. any person or dealer who shall willfully fail to make a return required by this chapter or who shall fail to remit taxes collected or any penalty or interest imposed by this chapter after written demand for such payments, or who shall refuse to permit the City's authorized agents to examine the books, records, and papers under his or her control, or who shall willfully make any incomplete, false, or fraudulent return shall be guilty of a misdemeanor.
Subd. 9. Effective Date, Transitional Sales. Except as otherwise provided herein, the excise tax authorized by this Ordinance shall apply to sales of motor vehicles made on or after April 1, 2007. The excise tax shall not apply to the sale of a motor vehicle made under an enforceable contract entered into before April 1, 2007, provided that delivery or possession of the motor vehicle is taken on or before June 30, 2007.
Section 436:20. Separate Statement: Collection from Purchaser; Advertising No Tax; Minimum Uniform Tax Collection Methods. The Owatonna Sales and Use Tax shall be stated and charged separately from the sales price or charge for service insofar as practical, and should be a debt from the purchaser to the seller recoverable at law in the same manner as other debts. In computing the tax to be collected as a result of any transaction, any amount of tax less than one-half of one cent may be disregarded and amounts of tax one-half cent or more may be considered an additional cent. If the sales price of any sale at Retail is ninety-nine cents or less, no tax shall be collected.
Section 436:25. Exemption Certificates. A fully completed exemption certificate taken from a purchaser 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 Ordinance will conclusively relieve the Retailer from collecting and remitting the tax. A person who has obtained from the Commissioner an exemption certificate pursuant to the Minnesota Statute Section 297A may use such exemption certificate for the purposes of the sales tax imposed by the City.
Section 436:30. Presumption of Purpose of Sale. For the purpose of the proper administration and enforcement of Section 3 of this Ordinance, it shall be presumed that all retail sales for delivery in the City are for storage, use, or other consumption in the City until the contrary is established.
Section 436:35. Collection of Sales and Use Tax at Time of Sale.
Subd. 1: Any retailer making deliveries within the City, any Retailer maintaining a place of business in the City, or any other Retailer otherwise doing business within the City, upon making sales or any items described in Section 3 which are not exempted from the sales tax imposed under that section and which are to be delivered or caused to be delivered within the City to the purchaser, shall at the time of making such sales and collect the Sales and Use tax from the purchaser. The tax collected by such retailer shall be remitted to the Commissioner on behalf of the City.
Subd. 2: Any retailer required to collect Owatonna Sales and Use Tax and remit such tax to the Commissioner pursuant to this section shall register with the Commissioner and provide such other information as the Commissioner may require.
Section 436:40. Agent of Retailer. When in the opinion of the Commissioner it is necessary for the efficient administration of the tax, the Commissioner may regard any salesman, representative, trucker, peddler or canvasser as the agent of the dealer, distributor, supervisor, employer or other person under whom such salesman, representative, trucker, peddler or canvasser operated or from whom the tangible property is being sold is obtained, and may regard the dealer, distributor, supervisor, employer or other person as a Retailer for the purposes of this Ordinance.
Section 436:45. Effective Date, Transitional Sales. Except as otherwise provided herein, the Owatonna Sales and Use Tax authorized by this Ordinance shall apply to sales made on or after April 1, 2007 and shall be in addition to all other taxes now in effect. The Owatonna Sales and Use Tax shall not apply to the following:
Subd. 1: The gross receipts from the purchase or lease of tangible personal property made under an enforceable contract entered into before April 1, 2007, provided that delivery or possession of items is taken on or before June 30, 2007.
Subd. 2: The gross receipts from the purchase of taxable services made under an enforceable contract entered into before April 1, 2007 and for which payment was made before April 1, 2007, provided that the services were provided before June 30, 2007.
Subd. 3: The gross receipts from the purchase of construction materials used to complete a lump sum or fixed price construction contract that was signed and enforceable before April 1, 2007 and that does not provide for an allocation of future taxes, provided that the construction materials are used exclusively in performing the contract and the materials are delivered before October 31, 2007.
Subd. 4: The gross receipts from the purchase of utility services if the utility bill includes charges for services furnished before April 1, 2007; however, the Owatonna Sales and Use Tax shall apply to all utility bills for periods beginning April 1, 2007.
Section 436:50. Collection and Enforcement. The Owatonna Sales and Use Tax imposed by the City pursuant to this Ordinance shall be subject to the same interests, penalties, and other rules as are applicable to the State general sales tax imposed by Minnesota Statutes Chapter 289A and 297A. The Owatonna Sales and Use Tax imposed by the City pursuant to this Ordinance may be collected by the State on behalf of the City as provided by an appropriate agreement with the Minnesota Commissioner or Revenue.
Section 436:55. Tax Clearance Issuance of Licenses. The City may not issue or renew a license for the conduct of trade or business in the City if the Commissioner notifies the City that the applicant for such license owes delinquent Owatonna Sales and Use Taxes as provided in this Ordinance, or penalties or interest due on such taxes. For the purposes of this Section 12, the following terms have the following meanings:
Subd. 1: Owatonna Sales and Use Taxes include sales and use tax as provided in this Ordinance. Penalties and interest are penalties and interest due on taxes included in this definition.
Subd. 2: Delinquent taxes do no include a tax liability if:
a. in administrative or court action which contests the amount of validity or the liability has been filed or served;
b. the appeal period to contest tax liability has not expired; or
c. the applicant has entered into a payment agreement and is current with the payments.
Subd. 3: Applicant means an individual if the license is issued to or in the name of an individual or the corporation, partnership or other entity if the license is issued to or in the name of a corporation, partnership or other entity.
A copy of the notice of delinquent taxes given to the City shall also be sent to the applicant taxpayer. In the case of renewal of a license, if the applicant requests a hearing in writing, within thirty (30) days of the receipt of the notice of delinquent taxes, then a contested case hearing shall be held by the Commissioner under the same procedures as provided in Minnesota Statutes, Section 270C.72 for the State sales and use tax imposed under Minnesota Statutes, Chapter 297A, provided that if a hearing must be held on the State sales and use tax, hearings may be combined.