HF5026

Purpose

• The bill creates a sales tax exemption for purchases by nonprofit carshare organizations when the items are used to provide carshare services.
• A nonprofit carshare organization is defined as a nonprofit whose primary purpose is to provide carshare services and that is exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code.
• The exemption applies to items purchased by the nonprofit carshare organization for use in delivering carshare services, with an exception noted under paragraph b (not shown in the provided text).
• The exemption does not apply to certain items, specifically: prepared food, candy, soft drinks, alcoholic beverages, and taxable cannabis products.

Main Provisions

• Creates a new subdivision (Subdivision 22) under Minnesota Statutes 2024 section 297A.70.
• Establishes a sales tax exemption for purchases by nonprofit carshare organizations when the items are used to provide carshare services.
• Defines the qualifying entity as a nonprofit carshare organization meeting the 501(c)(3) requirement.
• Includes stated exclusions to the exemption for certain categories of products (prepared foods, candy, soft drinks, alcoholic beverages, taxable cannabis products).

Definitions

• Nonprofit carshare organization: a nonprofit whose primary purpose is to provide carshare services and that is exempt from federal taxation under 501(c)(3) of the Internal Revenue Code.
• Carshare services: the activities carried out by the nonprofit to provide vehicle-sharing options to the public.

Exclusions and Limitations

• The exemption does not apply to sales of prepared food, candy, soft drinks, alcoholic beverages, or taxable cannabis products (as defined in related statutes).
• The text references an exception under paragraph b, which is not fully shown in the excerpt; the exemption may have additional limitations described there.

Significance and Potential Impact

• Purpose: Align Minnesota tax policy with nonprofit carsharing activities by removing sales tax on purchases used to operate carsharing programs.
• Practical effect: Lower operating costs for eligible nonprofit carshare organizations, potentially supporting expanded access to carsharing.
• Scope: Limited to purchases used to provide carshare services by qualifying nonprofit organizations; does not apply to the listed restricted product categories.

Relevant Terms - sales tax exemption - nonprofit carshare organization - carshare services - Minnesota Statutes 2024 section 297A.70 - subdivision 22 - 501(c)(3) of the Internal Revenue Code - prepared food - candy - soft drinks - alcoholic beverages - taxable cannabis products - 297A.67 subdivision 2 - 295.81 subdivision 1 paragraph r - exception under paragraph b (referenced).

Relevant Terms - nonprofit carshare organization - sales tax exemption - carshare services - 501(c)(3) - prepared food - candy - soft drinks - alcoholic beverages - taxable cannabis products - Minnesota statute references (297A.70, 297A.67, 295.81)