SF 2594

as introduced - 90th Legislature (2017 - 2018) Posted on 02/27/2018 09:51am

A bill for an act
relating to taxation; tobacco; reinstating the annual indexing requirement for the
cigarette excise tax rate; amending Minnesota Statutes 2016, section 297F.05, by
adding a subdivision; Minnesota Statutes 2017 Supplement, section 297F.05,
subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2017 Supplement, section 297F.05, subdivision 1, is amended
to read:

Subdivision 1.

Rates; cigarettes.

A tax is imposed upon the sale of cigarettes in this
state, upon having cigarettes in possession in this state with intent to sell, upon any person
engaged in business as a distributor, and upon the use or storage by consumers, at the rate
of deleted text begin 152 deleted text end new text begin 159 new text end mills, or deleted text begin 15.2 deleted text end new text begin 15.9 new text end cents, on each cigarette.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end

Sec. 2.

Minnesota Statutes 2016, section 297F.05, is amended by adding a subdivision to
read:

new text begin Subd. 1b. new text end

new text begin Annual indexing. new text end

new text begin (a) Each year the commissioner shall adjust the tax rates
under subdivision 1, including any adjustment made in prior years under this subdivision,
by multiplying the mill rates for the current calendar year by an adjustment factor and
rounding the result to the nearest mill. The adjustment factor equals the in-lieu sales tax
rate that applies to the following calendar year divided by the in-lieu sales tax rate for the
current calendar year. For purposes of this subdivision, "in-lieu sales tax rate" means the
tax rate established under section 297F.25, subdivision 1. For purposes of the calculations
under this subdivision to be made in any year in which an increase in the federal or state
excise tax on cigarettes is implemented, the commissioner shall exclude from the calculated
average price for the current year an amount equal to any increase in the state or federal
excise tax rate.
new text end

new text begin (b) The commissioner shall publish the resulting rate by November 1 and the rate applies
to sales made on or after January 1 of the following year.
new text end

new text begin (c) The determination of the commissioner under this subdivision is not a rule and is
not subject to the Administrative Procedure Act in chapter 14, including section 14.386.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies beginning with rates calculated for calendar year 2019.
new text end