Engrossments
Introduction		Posted on 03/07/2017

Section 1.

Minnesota Statutes 2016, section 270C.722, subdivision 1, is amended to read:

Subdivision 1.

Notice of revocation; hearings.

(a) Ifdeleted text begin : (1)deleted text end a person fails to comply with
chapter 297A or the sales and use tax provisions of chapter 289A or the rules related to
sales tax, deleted text begin or (2) any retailer purchases for resale from an unlicensed seller more than 20,000
cigarettes or $500 or more worth of tobacco products, without reasonable cause,deleted text end the
commissioner may give the person 30 days' notice in writing, specifying the violations, and
stating that based on the violations the commissioner intends to revoke the person's permit
issued under section 297A.84. The notice must also advise the person of the right to contest
the revocation under this subdivision. It must also explain the general procedures for a
contested case hearing under chapter 14. The notice may be served personally or by mail
in the manner prescribed for service of an order of assessment.

(b) If the person does not request a hearing within 30 days after the date of the notice
of intent, the commissioner may serve a notice of revocation of permit upon the person, and
the permit is revoked. If a hearing is timely requested, and held, the permit is revoked after
the commissioner serves an order of revocation of permit under section 14.62, subdivision
1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 270C.728, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Publication of revoked retail cigarette licenses. new text end

new text begin (a) Notwithstanding any
other law, the commissioner may publish a list of persons who have had their retail licenses
to sell cigarettes or tobacco products revoked under section 297F.186. In the case of a license
holder that is a business entity, the commissioner may also publish the name of responsible
persons of the license holder, as defined in section 297F.186, subdivision 1.
new text end

new text begin (b) At least 30 days before publishing the name of a license holder or responsible person,
the commissioner shall mail a written notice to the license holder and to responsible persons
of the license holder of the commissioner's intent to publish. This notice may be included
as part of the notice of intent to revoke a license as required under section 297F.186,
subdivision 3.
new text end

new text begin (c) The list may be published by any medium or method. The list must contain the name
and address of the license holder and name of the responsible person and the date the license
was revoked.
new text end

new text begin (d) The commissioner shall remove the name of a license holder or responsible person
from the list five years from the date of the license revocation or upon the license holder or
responsible person receiving a license clearance under section 297F.186.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 6a. new text end

new text begin Consumable material. new text end

new text begin "Consumable material" means any liquid nicotine
solution or other material containing nicotine that is depleted as a vapor product is used.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 7a. new text end

new text begin Consumer packaging. new text end

new text begin "Consumer packaging" means any container of vapor
product that is of an appropriate size for sale to a consumer.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2016, section 297F.01, subdivision 9a, is amended to read:

Subd. 9a.

Invoice.

"Invoice" means a detailed list of cigarettes and tobacco products
purchased or sold in this state that contains the following information:

(1) name of seller;

(2) name of purchaser;

(3) date of sale;

(4) invoice number;

(5) itemized list of goods sold including brands of cigarettes and number of cartons of
each brand, unit price, and identification of tobacco products by name, quantity, and unit
price; deleted text begin and
deleted text end

(6) any rebates, discounts, or other reductionsdeleted text begin .deleted text end new text begin ; and
new text end

new text begin (7) the weight or volume of the consumable material and concentration level of nicotine
of each vapor product sold.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for invoices issued for vapor products
purchased or sold after December 31, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 297F.01, subdivision 10, is amended to read:

Subd. 10.

Manufacturer.

"Manufacturer" means a person who produces and sells
cigarettes or tobacco productsnew text begin and includes a manufacturer of vapor productsnew text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 10c. new text end

new text begin Manufacturer of vapor products. new text end

new text begin "Manufacturer of vapor products" means
a person who makes, modifies, mixes, fabricates, assembles, processes, repacks, or relabels
a vapor product in Minnesota to sell.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2016, section 297F.01, subdivision 14, is amended to read:

Subd. 14.

Retailer.

"Retailer" means a person deleted text begin required to be licensed under chapter 461deleted text end
new text begin located in this state new text end engaged deleted text begin in this statedeleted text end in the business of selling, or offering to sell,
cigarettes or tobacco products to consumers.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 16a. new text end

new text begin Sales price of vapor products. new text end

new text begin (a) "Sales price of vapor products" means
the price at which a distributor or retailer purchases a vapor product or the price at which
a subjobber purchases vapor products from a manufacturer of vapor products.
new text end

new text begin (b) For the purposes of section 297F.05, subdivision 3b, paragraph (a), clause (5), "sales
price of vapor product" means the price at which the manufacturer sells the product minus
a retailer markup equal to ten percent of that price.
new text end

new text begin (c) If a vapor product described in section 297F.01, subdivision 22b, paragraph (b),
includes a cartridge, bottle, or other package of nicotine solution which is available for
purchase as a separate item by the distributor, retailer, subjobber, or consumer, then the
price at which the vapor product is purchased or sold for purposes of paragraphs (a) and (b)
is limited to the usual price, without regard to any discount or reduction, at which the
cartridge, bottle, or other package of nicotine solution is separately sold to a distributor,
retailer, subjobber, or consumer.
new text end

new text begin (d) Sales price of vapor products includes the applicable federal excise tax, freight
charges, and packaging costs, regardless of whether they were included in the purchase
price, but does not include the tax imposed under section 297F.05, subdivision 3b.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for vapor products subject to tax after
December 31, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 297F.01, subdivision 17, is amended to read:

Subd. 17.

Stamp.

"Stamp" means the adhesive stamp supplied by the commissioner of
revenue for use on cigarette packages new text begin or packages of moist snuff or other tobacco products
new text end or any other indicia adopted by the commissioner to indicate that the tax has been paid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 11.

Minnesota Statutes 2016, section 297F.01, subdivision 19, is amended to read:

Subd. 19.

Tobacco products.

(a) "Tobacco products" means any product containing,
made, or derived from tobacco that is intended for human consumption, whether chewed,
smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or
any component, part, or accessory of a tobacco product, including, but not limited to, cigars;
cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking
tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing
tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco,new text begin vapor products,new text end
and other kinds and forms of tobacco; but does not include cigarettes as defined in this
section. Tobacco products excludes any tobacco product that has been approved by the
United States Food and Drug Administration for sale as a tobacco cessation product, as a
tobacco dependence product, or for other medical purposes, and is being marketed and sold
solely for such an approved purpose.

(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4, tobacco
products includes a premium cigar, as defined in subdivision 13a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

Minnesota Statutes 2016, section 297F.01, subdivision 20, is amended to read:

Subd. 20.

Tobacco products distributor.

new text begin (a) new text end "Tobacco products distributor" meansdeleted text begin any
of the followingdeleted text end :

(1) a person engaged in the business of selling tobacco products in this state who brings,
or causes to be brought, into this state from outside the state any tobacco products for sale;new text begin
or
new text end

(2) deleted text begin a person who makes, manufactures, or fabricates tobacco products in this state for
sale in this state;
deleted text end

deleted text begin (3)deleted text end a person engaged in the business of selling tobacco products outside this state who
ships or transports tobacco products to retailers in this state, to be sold by those retailers.

new text begin (b) "Tobacco products distributor" includes a person who makes, manufactures, or
fabricates tobacco products, other than vapor products, in this state for sale in this state.
new text end

new text begin (c) "Tobacco products distributor" includes a manufacturer of vapor products only to
the extent that the manufacturer brings tobacco products into this state for use other than in
manufacturing vapor products.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2016, section 297F.01, subdivision 21, is amended to read:

Subd. 21.

Tobacco products subjobber.

"Tobacco products subjobber" meansnew text begin :
new text end

new text begin (1)new text end a person, other than a manufacturer or distributor, who buysnew text begin ,new text end from a new text begin manufacturer
of vapor products or a new text end distributornew text begin ,new text end tobacco products upon which the tax imposed by this
chapter has been paid and sells them to persons other than the ultimate consumersdeleted text begin ,deleted text end new text begin ;new text end and

new text begin (2)new text end any licensed distributor who delivers, sells, or distributes tobacco products upon
which the tax imposed by this chapter has been paid from a place of business other than
that licensed in the distributor's license.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision
to read:

new text begin Subd. 22b. new text end

new text begin Vapor product. new text end

new text begin (a) "Vapor product" means any cartridge, bottle, or other
package that contains nicotine that is derived from tobacco and is in a solution that is
consumed, or meant to be consumed, through the use of a heating element, power source,
electronic circuit, or other electronic, chemical, or mechanical means that produces vapor
from the nicotine.
new text end

new text begin (b) Vapor product includes any electronic cigarette, electronic cigar, electronic cigarillo,
electronic pipe, or similar product or device, and any batteries, heating elements, or other
components, parts, or accessories sold with and meant to be used in the consumption of the
nicotine solution described in paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2016, section 297F.03, subdivision 1, is amended to read:

Subdivision 1.

Selling without license illegal.

No person shall engage in the business
of anew text begin manufacturer of vapor products,new text end distributornew text begin ,new text end or subjobber at any place of business
without first having received a license from the commissioner to engage in that business at
that place of business.

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2016, section 297F.03, subdivision 2, is amended to read:

Subd. 2.

Form of application.

Every application for a cigarette deleted text begin ordeleted text end new text begin ,new text end tobacco productsnew text begin ,
or manufacturer of vapor productsnew text end license shall be made on a form prescribed by the
commissioner.

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2016, section 297F.03, subdivision 3, is amended to read:

Subd. 3.

Place of application.

A separate application for a distributor's license new text begin or a
manufacturer of vapor products license new text end shall be made for each place of business at which
a distributor proposes to engage in businessnew text begin or a manufacturer proposes to manufacture
vapor productsnew text end .

A separate application for a subjobber's license may be made by a licensed distributor
for each place of business, other than that licensed in the distributor's license, to which the
distributor sells or distributes stamped cigarettes or tobacco products.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2016, section 297F.03, subdivision 5, is amended to read:

Subd. 5.

License fees; cigarettes.

Each application for a cigarette distributor's license
must be accompanied by a fee of deleted text begin $300deleted text end new text begin $500new text end . Each application for a cigarette subjobber's
license must be accompanied by a fee of deleted text begin $24deleted text end new text begin $100new text end . A distributor or subjobber applying for
a license during the second year of a two-year licensing period is required to pay only
one-half of the license fee.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for license periods beginning after
December 31, 2017.
new text end

Sec. 19.

Minnesota Statutes 2016, section 297F.03, subdivision 6, is amended to read:

Subd. 6.

License fees; tobacco products.

Each application for a tobacco products
distributor's license must be accompanied by a fee of deleted text begin $75deleted text end new text begin $500new text end . Each application for a
tobacco products subjobber's license must be accompanied by a fee of deleted text begin $20deleted text end new text begin $100new text end . A distributor
or subjobber applying for a license during the second year of a two-year licensing period
is required to pay only one-half of the license fee.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for license periods beginning after
December 31, 2017.
new text end

Sec. 20.

Minnesota Statutes 2016, section 297F.03, is amended by adding a subdivision
to read:

new text begin Subd. 6a. new text end

new text begin License fees, vapor products. new text end

new text begin Each application for a manufacturer of vapor
products license must be accompanied by a fee equal to the fee for a tobacco products
distributor license under subdivision 6. A manufacturer of vapor products is not required
to obtain a distributor license under subdivision 6 to sell vapor products manufactured by
the licensee and sold in consumer packaging to a tobacco products distributor, a tobacco
products subjobber, or a retailer.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2016, section 297F.03, subdivision 7, is amended to read:

Subd. 7.

Issuance of license.

The commissioner, upon receipt of the application in proper
form, and payment of the license fee required by this chapter, shall, unless otherwise provided
by this chapter, issue the applicant a license in the form prescribed by the commissioner.
The license permits the applicant to engage in business as anew text begin manufacturer of vapor products,new text end
distributornew text begin ,new text end or subjobber at the place of business shown in the application.

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Minnesota Statutes 2016, section 297F.04, subdivision 1, is amended to read:

Subdivision 1.

Powers of commissioner.

The commissioner may revoke or suspend the
license or licenses of anynew text begin manufacturer of vapor products,new text end distributornew text begin ,new text end or subjobber for
violation of this chapter, any other act applicable to the sale of cigarettes or tobacco products,
or any rule promulgated by the commissioner, in furtherance of this chapter.

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2016, section 297F.04, subdivision 1, is amended to read:

Subdivision 1.

Powers of commissioner.

The commissioner may revoke deleted text begin ordeleted text end new text begin ,new text end suspendnew text begin ,
or refuse to renewnew text end the license or licenses of any distributor or subjobbernew text begin , or refuse to issue
a license to an applicant for a distributor or subjobber license,new text end for violation of this chapter,
any other act applicable to the sale of cigarettes or tobacco products, or any rule promulgated
by the commissioner, in furtherance of this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2017.
new text end

Sec. 24.

Minnesota Statutes 2016, section 297F.04, subdivision 2, is amended to read:

Subd. 2.

Refusal to issue or renew; revocation.

The commissioner must not issue or
renew a license under this chapter, and may revoke a license under this chapter, if the
applicant or licensee:

(1) owes $500 or more in delinquent taxes as defined in section 270C.72, subdivision
2;

(2) after demand, has not filed tax returns required by the commissioner;

(3) had a deleted text begin cigarette or tobaccodeleted text end licensenew text begin under this chapternew text end revoked by the commissioner
within the past two years;

(4) had a sales and use tax permit revoked by the commissioner within the past two
years; or

(5) has been convicted of a crime involving cigarettes, including but not limited to:
selling stolen cigarettes or tobacco products, receiving stolen cigarettes or tobacco products,
or involvement in the smuggling of cigarettes or tobacco products.

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2016, section 297F.05, subdivision 3, is amended to read:

Subd. 3.

Rates; tobacco products.

(a) Except as provided in subdivision 3anew text begin and 3bnew text end , a
tax is imposed upon all tobacco products in this state and upon any person engaged in
business as a distributor, at the rate of 95 percent of the wholesale sales price of the tobacco
products. The tax is imposed at the time the distributor:

(1) brings, or causes to be brought, into this state from outside the state tobacco products
for sale;

(2) makes, manufactures, or fabricates tobacco products in this state for sale in this state;
or

(3) ships or transports tobacco products to retailers in this state, to be sold by those
retailers.

(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a pack
of 20 cigarettes weighing not more than three pounds per thousand, as established under
subdivision 1, is imposed on each container of moist snuff.

For purposes of this subdivision, a "container" means the smallest consumer-size can,
package, or other container that is marketed or packaged by the manufacturer, distributor,
or retailer for separate sale to a retail purchaser. When more than one container is packaged
together, each container is subject to tax.

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

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

new text begin Subd. 3b. new text end

new text begin Rates; vapor products. new text end

new text begin (a) In lieu of the tax imposed under subdivision 3, a
tax is imposed upon all vapor products in this state equal to:
new text end

new text begin (1) in the case of a Minnesota distributor who brings, or causes to be brought, vapor
products into this state, 95 percent of the sales price of vapor products paid by the distributor;
new text end

new text begin (2) in the case of a distributor who sells vapor products from outside this state to a
retailer, 95 percent of the sales price of vapor products paid by the retailer;
new text end

new text begin (3) in the case of a manufacturer of vapor products who sells the manufactured product
to retailers or subjobbers, 95 percent of the sales price of vapor products paid by the retailer
or subjobber;
new text end

new text begin (4) in the case of a Minnesota distributor who purchases vapor products from a
manufacturer of vapor products, 95 percent of the sales price of vapor products paid by the
distributor; and
new text end

new text begin (5) in the case of a manufacturer of vapor products who is also a retailer who sells the
manufactured product to consumers, 95 percent of the sales price of vapor products.
new text end

new text begin (b) The tax under this subdivision is imposed:
new text end

new text begin (1) on the distributor at the time the vapor products in consumer packaging are brought
into the state or received by the distributor who brings, or causes to be brought, into this
state the vapor products for sale in this state;
new text end

new text begin (2) on the distributor at the time the distributor ships or transports the vapor products in
consumer packaging from outside this state to retailers in this state;
new text end

new text begin (3) on the manufacturer of vapor products at the time the vapor products are sold to a
retailer or subjobber;
new text end

new text begin (4) on the distributor at the time a Minnesota distributor purchases the vapor products
in consumer packaging that were manufactured by a Minnesota manufacturer of vapor
products; and
new text end

new text begin (5) on the manufacturer of vapor products who is also a retailer of vapor products, at
the time the vapor products manufactured in this state are sold to the consumer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for vapor products bought, sold, or
manufactured in Minnesota after December 31, 2017.
new text end

Sec. 27.

Minnesota Statutes 2016, section 297F.06, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Exempt sales of vapor products to licensed manufacturers of vapor
products. new text end

new text begin (a) A tobacco products distributor or manufacturer of vapor products, who at the
time of sale accepts in good faith a valid exemption certificate from a purchaser that is a
licensed manufacturer of vapor products, may sell vapor products in consumer packaging
containing more than 50 milliliters of nicotine solution to the purchaser exempt from the
tax imposed under section 297F.05, subdivision 3b.
new text end

new text begin (b) An exemption certificate is valid if it:
new text end

new text begin (1) is substantially in the form prescribed by the commissioner;
new text end

new text begin (2) bears the name and address of the purchaser;
new text end

new text begin (3) indicates the manufacturer of vapor products identification number issued to the
purchaser by the commissioner;
new text end

new text begin (4) is signed by the purchaser if it is in paper form, or meets the requirements of section
270C.304 if it is in electronic form; and
new text end

new text begin (5) indicates that the purchaser:
new text end

new text begin (i) intends to use the product to manufacture vapor products;
new text end

new text begin (ii) agrees to pay the applicable tax on the finished manufactured vapor products; and
new text end

new text begin (iii) agrees to pay the applicable tax if the purchaser does not use the product to
manufacture vapor product, but sells the product to a consumer or retailer.
new text end

new text begin (c) For determining the tax due under paragraph (b), clause (5), item (iii), any product
subject to tax is treated as if it was manufactured by the purchaser.
new text end

new text begin (d) A purchaser may use a blanket exemption certificate for continuing purchases. A
purchaser using a blanket exemption certificate must update the certificate as needed to
accurately reflect the information required under paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2016, section 297F.08, subdivision 8a, is amended to read:

Subd. 8a.

Revolving account.

A deleted text begin cigarettedeleted text end tax stamp revolving account is created. The
commissioner shall use the amounts in this fund to purchase stamps for resale. The
commissioner shall charge distributors for the tax value of the stamps they receive along
with the commissioner's cost to purchase the stamps and ship them to the distributor. The
stamp purchase and shipping costs recovered must be credited to the revolving account and
are appropriated to the commissioner for the further purchases and shipping costs. The
revolving account is initially funded by a $40,000 transfer from the Department of Revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2019.
new text end

Sec. 29.

new text begin [297F.081] TOBACCO PRODUCTS STAMPS.
new text end

new text begin Subdivision 1. new text end

new text begin Stamp affixed by distributor. new text end

new text begin (a) Before delivering, or causing to be
delivered, a package of moist snuff to a distributor, subjobber, retailer, or consumer in this
state, a distributor in this state must firmly affix to each package of moist snuff a tax stamp
obtained from the commissioner.
new text end

new text begin (b) When moist snuff is shipped into this state by any distributor from outside this state
to a retailer or subjobber, the appropriate stamp must be affixed to the package at the time
the package enters the state.
new text end

new text begin Subd. 2. new text end

new text begin Stamps; design; printing. new text end

new text begin The commissioner shall adopt the design of the
moist snuff stamp. At least one stamp must be designed for application to packages of moist
snuff destined for retail sale on an Indian reservation that is a party to an agreement under
section 270C.19, subdivision 2, and only to those packages. The commissioner shall arrange
for the printing of stamps in such amounts and denominations as the commissioner deems
necessary.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of proceeds. new text end

new text begin The commissioner shall use the amounts appropriated
by law to purchase stamps for resale. The commissioner shall charge the purchasers for the
commissioner's cost to purchase the stamps along with the tax value of the stamps plus
shipping costs. The tax value of the stamps must be deposited in the general fund. The
portion of the charge to the purchaser that represents the commissioner's cost to purchase
the stamps and the shipping costs must be deposited in the revolving stamp fund under
section 297F.08, subdivision 8a.
new text end

new text begin Subd. 4. new text end

new text begin Sale of stamps. new text end

new text begin (a) The commissioner shall sell moist snuff stamps only to
persons licensed as a tobacco products distributor.
new text end

new text begin (b) The commissioner may prescribe the method of shipment of the stamps to the
distributor.
new text end

new text begin (c) The commissioner shall charge the purchaser for the commissioner's cost to purchase
the stamps along with the tax value plus shipping costs.
new text end

new text begin (d)(1) The commissioner may sell moist snuff stamps on a credit basis to a distributor
unless:
new text end

new text begin (i) the distributor has been licensed by the commissioner as a tobacco products distributor
for less than one year;
new text end

new text begin (ii) the distributor has failed, without reasonable cause, to timely file tax returns or
reports required to be filed with the commissioner under a law administered by the
commissioner at any time during the prior 24 months; or
new text end

new text begin (iii) the distributor has failed, without reasonable cause, to timely pay taxes and fees
payable to the commissioner under a law administered by the commissioner at any time
during the prior 24 months.
new text end

new text begin (2) A distributor may purchase on a credit basis in any calendar month no more than the
number of stamps needed to affix to 15 percent of the number of moist snuff packages
reported to the commissioner as sold by the distributor during the previous 12-month period.
new text end

new text begin (3) A distributor who purchases stamps on a credit basis must pay the cost of the stamps
determined under paragraph (c) to the commissioner no later than the due date of the return
required under section 297F.09, subdivision 2, for the month that the order for the stamps
was received by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Tax stamping machines. new text end

new text begin The commissioner may require any person licensed
as a distributor to stamp packages of moist snuff with a tax stamping machine, approved
by the commissioner, which shall be provided by the distributor. The commissioner shall
also supervise and check the operation of the machines. If the commissioner finds that a
stamping machine is not affixing a legible stamp on the package, the commissioner may
order the distributor to immediately cease the stamping process until the machine is
functioning properly.
new text end

new text begin Subd. 6. new text end

new text begin Resale or transfer of stamps prohibited. new text end

new text begin (a) No distributor shall resell or
transfer any moist snuff stamps purchased by the distributor from the commissioner. A
distributor may transfer another state's stamped moist snuff to another distributor for the
purpose of resale in the other state.
new text end

new text begin (b) A distributor who has on hand any moist snuff stamps when its tobacco products
distributor license is revoked, canceled, or not renewed may return the stamps to the
commissioner and receive a refund of the amount paid for the stamps.
new text end

new text begin (c) Moist snuff stamps that have become mutilated or unfit for use, or are affixed to
moist snuff packages being returned to the manufacturer, or are affixed to packages of moist
snuff that, or the contents of which, have become damaged and unfit for sale, shall be
replaced by the commissioner, upon application by the distributor owning the stamps or
moist snuff if the commissioner determines the stamps have not evidenced a taxable
transaction.
new text end

new text begin Subd. 7. new text end

new text begin Rulemaking for stamps on other tobacco products. new text end

new text begin The commissioner may
promulgate rules that require tax stamps to be affixed to tobacco products other than moist
snuff. The rules may apply to one or more classes or types of tobacco product.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivision 1 is effective for moist snuff delivered, caused to be
delivered, or shipped after June 30, 2019. Subdivisions 2 to 7 are effective January 1, 2019.
new text end

Sec. 30.

Minnesota Statutes 2016, section 297F.09, subdivision 2, is amended to read:

Subd. 2.

Monthly return; tobacco products distributor.

On or before the 18th day of
each calendar month, a distributor with a place of business in this statenew text begin or a manufacturer
of vapor productsnew text end shall file a return with the commissioner showing the quantity and
wholesale sales pricenew text begin or sales price of vapor productnew text end of each tobacco product:

(1) brought, or caused to be brought, into this state for sale; and

(2) made, manufactured, or fabricated in this state for sale in this state, during the
preceding calendar month.

Every licensed distributor outside this state shall in like manner file a return showing
the quantity and wholesale sales pricenew text begin or sales of vapor productnew text end of each tobacco product
shipped or transported to retailers in this state to be sold by those retailers, during the
preceding calendar month. Returns must be made in the form and manner prescribed by the
commissioner and must contain any other information required by the commissioner. The
return must be accompanied by a remittance for the full tax liability shown. For distributors
subject to the accelerated tax payment requirements in subdivision 10, the return for the
May liability is due two business days before June 30th of the year and the return for the
June liability is due on or before August 18th of the year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes imposed on vapor products
brought into the state or manufactured in the state after December 31, 2017.
new text end

Sec. 31.

Minnesota Statutes 2016, section 297F.09, subdivision 7, is amended to read:

Subd. 7.

Electronic payment.

A cigarette or tobacco products distributornew text begin or a
manufacturer of vapor productsnew text end having a liability of $10,000 or more during a fiscal year
ending June 30 must remit all liabilities in all subsequent calendar years by electronic means.

new text begin EFFECTIVE DATE. new text end

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

Sec. 32.

Minnesota Statutes 2016, section 297F.09, subdivision 10, is amended to read:

Subd. 10.

Accelerated tax payment; cigarette or tobacco products distributornew text begin or
manufacturer of vapor productsnew text end .

A cigarette or tobacco products distributornew text begin or a
manufacturer of vapor productsnew text end having a liability of $250,000 or more during a fiscal year
ending June 30, shall remit the June liability for the next year in the following manner:

(a) Two business days before June 30 of the year, the distributornew text begin or manufacturernew text end shall
remit the actual May liability and 81.4 percent of the estimated June liability to the
commissioner and file the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the distributornew text begin or manufacturernew text end shall submit a
return showing the actual June liability and pay any additional amount of tax not remitted
in June. A penalty is imposed equal to ten percent of the amount of June liability required
to be paid in June, less the amount remitted in June. However, the penalty is not imposed
if the amount remitted in June equals the lesser of:

(1) 81.4 percent of the actual June liability; or

(2) 81.4 percent of the preceding May liability.

new text begin EFFECTIVE DATE. new text end

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

Sec. 33.

Minnesota Statutes 2016, section 297F.12, subdivision 3, is amended to read:

Subd. 3.

Manufacturers.

new text begin (a) new text end A manufacturer of tobacco products as defined by this
chapter shall report in the form and manner prescribed by the commissioner all sales of
tobacco products to Minnesota licensed distributors, subjobbers, retailers, or to any locations
within the state. The report is due on the 18th day of the month following the reporting
period.

new text begin (b) A manufacturer of vapor products must file a report with the commissioner no later
than the 18th day of each month identifying all vapor products placed into consumer
packaging and all sales of vapor products made by the manufacturer during the preceding
month. The report must identify the names and addresses of the persons within the state to
whom shipments to tobacco products distributors, subjobbers, or retailers were made, and
the quantity of vapor products manufactured or sold by type of product, brand, and size.
The reports must also include information related to sales and purchases of tax exempt vapor
products. If the manufacturer is also a retailer, the report must include the quantity of vapor
products sold to customers by type of product, brand, and size.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 34.

Minnesota Statutes 2016, section 297F.13, subdivision 2, is amended to read:

Subd. 2.

Tobacco products distributor.

(a) A distributor shall keep at each licensed
place of business complete and accurate records for that place of business, including itemized
invoices of tobacco products held, purchased, manufactured, brought in or caused to be
brought in from outside the state, or shipped or transported to retailers in this state, and all
sales of tobacco products made, except sales to the ultimate consumer.new text begin These records must
show the names and addresses of purchasers, the inventory of all moist snuff stamps affixed
and unaffixed to packages of moist snuff, and all moist snuff on hand at the close of each
period for which a return is required, and any other pertinent papers and documents relating
to the purchase, sale, or disposition of moist snuff.
new text end

(b) When a licensed distributor sells tobacco products exclusively to the ultimate
consumer at the address given in the license, no invoice of those sales is required, but
itemized invoices must be made of all tobacco products transferred to other retail outlets
owned or controlled by that licensed distributor.

(c) All books, records, and other documents required by this chapter must be preserved
for a period of at least 3-1/2 years after the date of the documents or the date of the entries
appearing in the records, unless the commissioner authorizes in writing their destruction or
disposal at an earlier date.

(d) To determine whether the distributor is in compliance with the provisions of this
chapter, at any time during usual business hours the commissioner, or duly authorized agents
or employees, may enter a place of business of a distributor, without a search warrant, and
inspect the premises, the records required to be kept under this chapter, and the tobacco
products in that place of business. If the commissioner, or an agent or employee of the
commissioner, is denied free access or is hindered or interfered with in making the
examination, the commissioner may revoke the distributor's license.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for moist snuff purchased, sold, or
disposed of after June 30, 2019.
new text end

Sec. 35.

Minnesota Statutes 2016, section 297F.13, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Manufacturers of vapor products. new text end

new text begin (a) A manufacturer of vapor products
shall keep at each licensed place of business complete and accurate records for that place
of business, including itemized invoices of vapor products held, purchased, manufactured,
brought in or caused to be brought in from outside the state, or shipped or transported to
distributors, subjobbers, or retailers in this state.
new text end

new text begin (b) A manufacturer of vapor products who is also a retailer must keep records of all sales
made to the ultimate customer. These records must include cash register tapes or other
similar electronic records and any other records which involve purchases or sales of vapor
products which are required to be kept by a retailer who makes sales subject to tax under
chapter 297A.
new text end

new text begin (c) When a manufacturer of vapor products sells vapor products exclusively to the
ultimate consumer at the address given in the license, no invoice of those sales is required,
but itemized invoices must be made of all vapor products transferred to other retail outlets
owned or controlled by that manufacturer.
new text end

new text begin (d) All books, records, and other documents required by this subdivision must be
preserved for a period of at least 3-1/2 years after the date of the documents or the date of
the entries appearing in the records, unless the commissioner authorizes in writing the
destruction or disposal at an earlier date.
new text end

new text begin (e) To determine whether the manufacturer is in compliance with the provisions of this
chapter, at any time during usual business hours the commissioner, or duly authorized agents
or employees, may enter a place of business of a manufacturer, without a search warrant,
and inspect the premises, the records required to be kept under this chapter, and the vapor
products in that place of business. If the commissioner, or an agent or employee of the
commissioner, is denied free access or is hindered or interfered with in making the
examination, the commissioner may revoke the manufacturer's license.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 36.

Minnesota Statutes 2016, section 297F.13, subdivision 4, is amended to read:

Subd. 4.

Retailer and subjobber to preserve purchase invoices.

Every retailer and
subjobber shall procure itemized invoices of all cigarettes or tobacco products purchased.

The retailer and subjobber shall preserve a legible copy of each invoice for one year
from the date of the invoicenew text begin or as long as the cigarette or tobacco product listed on the
invoice is available for sale or in their possession, whichever period is longernew text end . The retailer
and subjobber shall preserve copies of the invoices at each retail location or at a central
location provided that the invoice must be produced and made available at a retail location
within one hour when requested by the commissioner or duly authorized agents and
employees. Copies should be numbered and kept in chronological order.

To determine whether the business is in compliance with the provisions of this chapter,
at any time during usual business hours, the commissioner, or duly authorized agents and
employees, may enter any place of business of a retailer or subjobber without a search
warrant and inspect the premises, the records required to be kept under this chapter, and the
packages of cigarettes, tobacco products, and vending devices contained on the premises.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases by subjobbers
and retailers made on or after August 1, 2017.
new text end

Sec. 37.

Minnesota Statutes 2016, section 297F.15, subdivision 9, is amended to read:

Subd. 9.

Physical inventory.

The commissioner or the commissioner's authorized agents
may, as considered necessary, require a cigarette or tobacco products distributornew text begin or a
manufacturer of vapor productsnew text end to furnish a physical inventory of all cigarettes or tobacco
products in stock. The inventory must contain the information that the commissioner requests
and must be certified by an officer of the corporation.

new text begin EFFECTIVE DATE. new text end

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

Sec. 38.

new text begin [297F.186] REVOCATION OF CIGARETTE AND TOBACCO RETAIL
LICENSE.
new text end

new text begin Subdivision 1. new text end

new text begin Cigarette and tobacco retail revocation. new text end

new text begin (a) A licensing authority must
not issue, transfer, or renew, and must revoke, a license if the commissioner notifies the
licensing authority that the license holder has been in possession of contraband cigarettes
or tobacco products under section 297F.21 at the location covered by the license.
new text end

new text begin (b) Within ten days after receipt of the notification from the commissioner under
paragraph (a), the licensing authority must notify the license holder by mail of the revocation
of the license. The notice must include a copy of the commissioner's notice to the licensing
authority and information, in the form specified by the commissioner, on the licensee's
option for receiving a license clearance from the commissioner. The licensing authority
must revoke the license within 30 days after receiving the notice from the commissioner,
unless it receives a license clearance from the commissioner as provided in subdivision 2,
paragraph (b).
new text end

new text begin (c) For purposes of this section, the following terms have the meanings given.
new text end

new text begin (1) "License holder" means an individual or legal entity who has a license to sell cigarettes
or tobacco products issued under chapter 461.
new text end

new text begin (2) "License" means a license to sell cigarettes or tobacco products under chapter 461.
new text end

new text begin (3) "Licensing authority" means a town board, county board, governing body of a home
rule charter or statutory city, or state agricultural society authorized to issue licenses under
chapter 461.
new text end

new text begin (4) "Applicant" is any individual, corporation, partnership, or any other legal entity that
is a holder of a license or that has filed an application to obtain a license.
new text end

new text begin (5) "Responsible person" means any individual who, either singly or jointly with others,
has the control of, supervision of, or responsibility for filing tax returns or reports, paying
taxes, or collecting or withholding and remitting taxes to the commissioner for a license
holder, or who has authority to purchase cigarettes or tobacco products, or supervises a
person who has authority to purchase cigarettes or tobacco products for the license holder.
new text end

new text begin Subd. 2. new text end

new text begin New licenses after revocation. new text end

new text begin (a) An applicant who has had a license revoked
under this section, or an applicant with a responsible person who was a responsible person
for another entity for which a license was revoked under this section, may not apply for a
license or seek the reinstatement of a revoked license unless the applicant presents to the
licensing authority a license clearance issued by the commissioner. A licensing authority
must not issue a new license to an applicant with such a responsible person or to an applicant
who has had a license revoked under this section or reinstate a revoked license unless the
applicant presents to the authority a license clearance issued by the commissioner.
new text end

new text begin (b) Except as provided in paragraph (f), the commissioner may issue a license clearance
if the applicant and all responsible persons of the applicant:
new text end

new text begin (1) sign an agreement that acknowledges that the applicant and the responsible person
will follow all laws related to the taxation of cigarettes and tobacco products, including the
requirements to:
new text end

new text begin (i) purchase all cigarettes and tobacco products from distributors and subjobbers licensed
by the commissioner;
new text end

new text begin (ii) maintain invoices of all cigarettes or tobacco products purchased as required under
section 297F.13, subdivision 4, and produce those invoices within one hour when requested
by the commissioner or duly authorized agents and employees; and
new text end

new text begin (iii) timely file and pay to the commissioner all returns and all sales taxes related to the
sale of tobacco products; and
new text end

new text begin (2) deposit with the commissioner security or a surety bond in an amount equal to ten
times the amount of tax on the contraband cigarettes or tobacco products. The commissioner
must hold the security deposit for two years.
new text end

new text begin (c) The commissioner must pay interest on any money deposited as security. The interest
is calculated from the date of deposit to the date of refund, or date of application to any
outstanding tax liability, at a rate specified in section 270C.405. The commissioner must
refund the security deposit to the applicant at the end of the two-year period unless the
applicant has any unpaid tax liabilities payable to the commissioner. The commissioner
may apply the security deposit to any unpaid tax liabilities of the applicant owed to the
commissioner as well as the tax on any contraband cigarettes or tobacco products owned,
possessed, sold, or offered for sale by the applicant after the license clearance has been
issued.
new text end

new text begin (d) The commissioner may refund the security deposit before the end of the two-year
holding period if the license holder no longer has a license to sell cigarettes or tobacco
products issued by any licensing authority in the state.
new text end

new text begin (e) If the commissioner determines that a licensing authority has issued a new license
or reinstated a revoked license without the applicant submitting a license clearance, the
commissioner may notify the licensing authority to revoke the license. Revocations under
this subdivision are controlled by the provisions of subdivision 1, paragraph (b), and
subdivision 3. Notice of intent to require revocation from the commissioner must be sent
to the license holder and to the responsible person of the license holder.
new text end

new text begin (f) If an applicant has had, or if a person has been a responsible person to, a cumulative
number of two licenses revoked under this subdivision in a five-year period by all licensing
authorities within the state, the commissioner may refuse to issue a license clearance until
24 months have elapsed after the last revocation and the applicant has satisfied the conditions
for reinstatement of a revoked license or issuance of a new license imposed by this
subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Notice and hearing. new text end

new text begin (a) Prior to notifying a licensing authority pursuant to
subdivision 1 to revoke a license, the commissioner must send a notice to the license holder
and to any known responsible person of the license holder of the commissioner's intent to
require revocation of the license and of the license holder's or responsible person's right to
a hearing. If the license holder or responsible person requests a hearing in writing within
30 days of the date of the notice, a contested case hearing must be held. The hearing must
be held within 45 days of the date the commissioner refers the case to the Office of
Administrative Hearings. Notwithstanding any law to the contrary, the license holder or
responsible person must be served within 20 days' notice in writing specifying the time and
place of the hearing and the allegations against the license holder or responsible person.
The notice may be served personally or by mail. A license is subject to revocation when 30
days have passed following the date of the notice in this paragraph without the license holder
requesting a hearing, or, if a hearing is timely requested, upon final determination of the
hearing under section 14.62, subdivision 1.
new text end

new text begin (b) The commissioner may notify a licensing authority under subdivision 1 only after
the requirements of paragraph (a) have been satisfied.
new text end

new text begin (c) A hearing under this subdivision is in lieu of any other hearing or proceeding provided
by law arising from any action taken under subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2017.
new text end

Sec. 39.

Minnesota Statutes 2016, section 297F.19, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Penalty for retailers who fail to comply. new text end

new text begin (a) A retailer who fails to produce
an itemized invoice from a licensed seller within one hour of being requested by the
commissioner to do so as required under section 297F.13, subdivision 4, or who offers for
sale or holds in inventory cigarettes or tobacco products without a license required under
chapter 461 is subject to a penalty of $100 for the first violation, $2,000 for the second
violation, and $5,000 for the third and each subsequent violation occurring during any
36-month period.
new text end

new text begin (b) A retailer who offers for sale or holds in inventory untaxed cigarettes or tobacco
products is subject to a penalty equal to the greater of $2,000, or 150 percent of the tax due
on the cigarettes or tobacco products.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for violations occurring on or after August
1, 2017.
new text end

Sec. 40.

Minnesota Statutes 2016, section 297F.20, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Penalties for willful failure to file or pay. new text end

new text begin (a) A person or consumer required
to file a return, report, or other document with the commissioner who willfully attempts in
any manner to evade or defeat a tax by failing to do so when required is guilty of a felony.
new text end

new text begin (b) A person or consumer required to pay or to collect and remit a tax under this chapter,
who willfully attempts to evade or defeat a tax by failing to do so when required, is guilty
of a felony.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for offenses committed on or after August
1, 2017.
new text end

Sec. 41.

Minnesota Statutes 2016, section 297F.20, subdivision 5, is amended to read:

Subd. 5.

Unstamped cigarettesnew text begin or moist snuffnew text end ; presumption.

(a) Except as provided
in paragraph (b), whenever a package of cigarettes new text begin or moist snuff new text end is found in the place of
business or in the possession of any person without a proper stamp affixed as required by
this chapter, it is presumed that those cigarettes new text begin or moist snuff new text end are kept there or held by that
person illegally.

(b) This presumption does not apply to:

(1) cigarettes new text begin or moist snuff new text end in the place of business or in the possession of a licensed
distributor;

(2) cigarettes new text begin or moist snuff new text end in the possession of a common carrier or sleeping car
company engaged in interstate commerce;

(3) cigarettes new text begin or moist snuff new text end held in a public warehouse of first destination in this state,
in the unbroken, original shipping containers, subject to delivery or shipping instructions
from the manufacturer or a distributor;

(4) cigarettes new text begin or moist snuff new text end in the possession of a person other than a distributor in
quantities of 200 cigarettes or lessnew text begin or $50 or less of moist snuffnew text end , when those cigarettes new text begin or
moist snuff new text end have had the individual packages or seals broken, and when they are intended
for personal use and not to be sold or offered for sale;

(5) cigarettes new text begin or moist snuff new text end sold under circumstances in which the tax cannot legally
be imposed because of the laws or Constitution of the United States.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for moist snuff possessed after December
31, 2019.
new text end

Sec. 42.

Minnesota Statutes 2016, section 297F.20, subdivision 6, is amended to read:

Subd. 6.

Unstamped cigarettes; untaxed tobacco products.

(a) A person, other than
a licensed distributornew text begin , a licensed manufacturer of vapor products,new text end or a consumer, who
possesses, receives, or transports fewer than 5,000 unstamped cigarettes, or up to $350
worth of untaxed tobacco products is guilty of a misdemeanor.

(b) A person, other than a licensed distributornew text begin , a licensed manufacturer of vapor products,new text end
or a consumer, who possesses, receives, or transports 5,000 or more, but fewer than 20,001
unstamped cigarettes, or more than $350 but less than $1,400 worth of untaxed tobacco
products is guilty of a gross misdemeanor.

(c) A person, other than a licensed distributornew text begin , a licensed manufacturer of vapor products,new text end
or a consumer, who possesses, receives, or transports more than 20,000 unstamped cigarettes,
or $1,400 or more worth of untaxed tobacco products is guilty of a felony.

(d) For purposes of this subdivision, an individual in possession of more than 4,999
unstamped cigarettes, or more than $350 worth of untaxed tobacco products, is presumed
not to be a consumer.

new text begin EFFECTIVE DATE. new text end

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

Sec. 43.

Minnesota Statutes 2016, section 297F.20, subdivision 6, is amended to read:

Subd. 6.

Unstamped cigarettes; untaxed tobacco products.

(a) A person, other than
a licensed distributor or a consumer, who possesses, receives, or transports fewer than 5,000
unstamped cigarettes, or up to $350 worth of untaxed tobacco products new text begin or unstamped moist
snuff new text end is guilty of a misdemeanor.

(b) A person, other than a licensed distributor or a consumer, who possesses, receives,
or transports 5,000 or more, but fewer than 20,001 unstamped cigarettes, or more than $350
but less than $1,400 worth of untaxed tobacco products new text begin or unstamped moist snuff new text end is guilty
of a gross misdemeanor.

(c) A person, other than a licensed distributor or a consumer, who possesses, receives,
or transports more than 20,000 unstamped cigarettes, or $1,400 or more worth of untaxed
tobacco products new text begin or unstamped moist snuff new text end is guilty of a felony.

(d) For purposes of this subdivision, an individual in possession of more than 4,999
unstamped cigarettes, or more than $350 worth of untaxed tobacco productsnew text begin or unstamped
moist snuffnew text end , is presumed not to be a consumer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for moist snuff possessed after December
31, 2019, or for moist snuff received or transported after June 30, 2019.
new text end

Sec. 44.

Minnesota Statutes 2016, section 297F.20, subdivision 7, is amended to read:

Subd. 7.

Sale of deleted text begin cigarettedeleted text end packages with Indian stamp.

(a) A retailer doing business
off of an Indian reservation who sells or offers to sell more than 200 but fewer than 5,000
cigarettes new text begin or up to $350 worth of tobacco products new text end with Indian stamps is guilty of a
misdemeanor.

(b) A retailer doing business off of an Indian reservation who sells or offers to sell 5,000
or more, but fewer than 20,001 cigarettes new text begin or more than $350 but less than $1,400 worth of
tobacco products new text end with Indian stamps is guilty of a gross misdemeanor.

(c) A retailer doing business off of an Indian reservation who sells or offers to sell more
than 20,000 cigarettes new text begin or $1,400 or more worth of tobacco products new text end with Indian stamps is
guilty of a felony.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales of tobacco products, or offers
to sell tobacco products, after June 30, 2019.
new text end

Sec. 45.

Minnesota Statutes 2016, section 297F.20, subdivision 9, is amended to read:

Subd. 9.

Purchases from unlicensed sellers.

(a) No retailer or subjobber shall purchase
cigarettes or tobacco products from any person who is not licensed under section 297F.03
as a licensed distributornew text begin , manufacturer of vapor products,new text end or subjobber.

(b) A retailer or subjobber who purchases from an unlicensed seller fewer than 5,000
cigarettes or up to $350 worth of tobacco products is guilty of a misdemeanor.

(c) A retailer or subjobber who purchases from an unlicensed seller 5,000 or more, but
fewer than 20,001 cigarettes or more than $350 but less than $1,400 worth of tobacco
products is guilty of a gross misdemeanor.

(d) A retailer or subjobber who purchases from an unlicensed seller more than 20,000
cigarettes or $1,400 or more worth of tobacco products is guilty of a felony.

new text begin EFFECTIVE DATE. new text end

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

Sec. 46.

Minnesota Statutes 2016, section 297F.20, is amended by adding a subdivision
to read:

new text begin Subd. 13. new text end

new text begin Aggregation and consolidation of venue. new text end

new text begin In any prosecution under this
section, the number of unstamped cigarettes or the value of the untaxed tobacco products
possessed, received, transported, sold, offered to be sold, or purchased in violation of this
section within any six-month period may be aggregated and the defendant charged
accordingly in applying the provisions of this section. When two or more offenses are
committed by the same individual in two or more counties, the accused may be prosecuted
in any county in which one of the offenses was committed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for offenses committed on or after August
1, 2017.
new text end

Sec. 47.

Minnesota Statutes 2016, section 297F.21, subdivision 1, is amended to read:

Subdivision 1.

Contraband defined.

The following are declared to be contraband and
therefore subject to civil and criminal penalties under this chapter:

(a) Cigarette packages which do not have stamps affixed to them as provided in this
chapter, including but not limited to (i) packages with illegible stamps and packages with
stamps that are not complete or whole even if the stamps are legible, and (ii) all devices for
the vending of cigarettes in which packages as defined in item (i) are found, including all
contents contained within the devices.

(b) A device for the vending of cigarettes and all packages of cigarettes, where the device
does not afford at least partial visibility of contents. Where any package exposed to view
does not carry the stamp required by this chapter, it shall be presumed that all packages
contained in the device are unstamped and contraband.

(c) A device for the vending of cigarettes to which the commissioner or authorized agents
have been denied access for the inspection of contents. In lieu of seizure, the commissioner
or an agent may seal the device to prevent its use until inspection of contents is permitted.

(d) A device for the vending of cigarettes which does not carry the name and address of
the owner, plainly marked and visible from the front of the machine.

(e) A device including, but not limited to, motor vehicles, trailers, snowmobiles, airplanes,
and boats used with the knowledge of the owner or of a person operating with the consent
of the owner for the storage or transportation of more than 5,000 cigarettes which are
contraband under this subdivision. When cigarettes are being transported in the course of
interstate commerce, or are in movement from either a public warehouse to a distributor
upon orders from a manufacturer or distributor, or from one distributor to another, the
cigarettes are not contraband, notwithstanding the provisions of clause (a).

(f) A device including, but not limited to, motor vehicles, trailers, snowmobiles, airplanes,
and boats used with the knowledge of the owner, or of a person operating with the consent
of the owner, for the storage or transportation of untaxed tobacco products intended for sale
in Minnesota other than those in the possession of a licensed distributor on or before the
due date for payment of the tax under section 297F.09, subdivision 2.

(g) Cigarette packages or tobacco products obtained from an unlicensed seller.

(h) Cigarette packages offered for sale or held as inventory in violation of section
297F.20, subdivision 7.

(i) Tobacco products on which the tax has not been paid by a licensed distributornew text begin or
manufacturer of vapor productsnew text end .

(j) Any cigarette packages or tobacco products offered for sale or held as inventory for
which there is not an invoice from a licensed seller as required under section 297F.13,
subdivision 4.

(k) Cigarette packages which have been imported into the United States in violation of
United States Code, title 26, section 5754. All cigarettes held in violation of that section
shall be presumed to have entered the United States after December 31, 1999, in the absence
of proof to the contrary.

(l) Cigarettes subject to forfeiture under section 299F.854, subdivision 5, and cigarette
packaging and markings, including the cigarettes contained therein, which do not meet the
requirements under section 299F.853, paragraph (a).

new text begin (m) Vapor products purchased exempt from tax under section 297F.06, subdivision 6,
by a person other than a licensed manufacturer of vapor products.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 48.