Friday, April 26, 2013
Minnesota House Passes Bill Making Paint and Materials Taxable
The Minnesota House on April 24 passed an omnibus tax bill that includes a new section on sales tax for the collision repairers in the state.
The 354 page House File 677 adds the sale of motor vehicle repair paint and materials to the definition of a taxable retail sale. The section of the bill pertaining to body shops is similar to a standalone bill that was introduced earlier this year to accomplish the same result, SF 326.
If passed into law, the bill would require shops, for the purposes of calculating the tax due, to estimate the paint and materials portion of a repair by multiplying the number of labor hours by an hourly consideration rate for the paint and materials, so long as that total does not equal less than the shop actually paid for the paint and materials. The measure also provides for the use of paint and materials costing software.
In addition, the bill provides a long list of materials that would be considered taxable under the law including primer, paint, clear coat, thinner, abrasives, body filler, buffing pads, grinding discs, degreasers, masking tape, sealer, tack cloth, waxes, welding rods and more.
If passed, the new tax law would begin on June 30.