MN HF2032

Modifies definition of "retail sale" for motor vehicle leases to include rent-to-own or lease-to-own used vehicles where the lessee may purchase or return the vehicle without penalty, with tax occurring when each payment is made.

Changes the timing of when a retail sale occurs for standard motor vehicle leases (excluding vehicles over 10,000 pounds GVWR and short-term rentals) from when lease payment is due to when the lease is executed.

Includes revenue from rent-to-own and lease-to-own vehicle payments in motor vehicle lease sales tax revenue calculations for allocation to transit and highway funds.

Allocates net motor vehicle lease sales tax revenue 50 percent to the greater Minnesota transit account and 50 percent to county state-aid highway funds in the metropolitan area (excluding Hennepin and Ramsey counties), distributed by population.

Establishes baseline revenue deductions of $30,100,000 for fiscal year 2011, $31,100,000 for fiscal year 2012, and $32,000,000 for fiscal year 2013 and beyond before distributing remaining net revenue.

Effective date: Applies to leases entered into after June 30, 2012.