1999 Minnesota Statutes

CHAPTER 297G. Liquor taxation

     297G.01 Definitions. 

    Subdivision 1.    Terms.  For purposes of this chapter, 
 the following term have the meanings given them unless the 
 language or context clearly indicates that a different meaning 
 is intended. 

    Subd. 2.    Alcoholic beverage.  "Alcoholic beverage" is 
 any beverage containing more than one-half of one percent 
 alcohol by volume. 

    Subd. 3.    Brewer.  "Brewer" is a person who 
 manufactures malt liquor for sale. 

    Subd. 3a.    Cider.  "Cider" means a product that 
 contains not less than one-half of one percent nor more than 
 seven percent alcohol by volume and is made from the alcoholic 
 fermentation of the juice of apples.  Cider includes, but is not 
 limited to, flavored, sparkling, and carbonated cider. 

    Subd. 4.    Collector.  "Collector" is a person who 
 collects commemorative bottles for their use and enjoyment as 
 collector's items and not for the consumption of the beverage 
 contained in them.  The term does not include licensed 
 wholesalers or retailers of alcoholic beverages. 

    Subd. 5.    Commemorative bottles.  "Commemorative 
 bottles" are ceramic commemorative bottles or other specially 
 designed decanters which have value as collector's items and 
 which contain an alcoholic beverage. 

    Subd. 6.    Commissioner.  "Commissioner" is the 
 commissioner of revenue. 

    Subd. 7.    Distilled spirits.  "Distilled spirits" is 
 intoxicating liquors, including ethyl alcohol, hydrated oxide of 
 ethyl, spirits of wine, whiskey, rum, brandy, gin, and other 
 distilled spirits, including all dilutions and mixtures, for 
 nonindustrial use. 

    Subd. 8.    Fermented malt beverages.  "Fermented malt 
 beverages" is any beer, ale, or other beverage made from malt by 
 fermentation and containing not less than one-half of one 
 percent alcohol by volume. 

    Subd. 9.    Internal Revenue Code.  Unless specifically 
 defined otherwise, "Internal Revenue Code" means the Internal 
 Revenue Code of 1986, as amended through December 31, 1996. 

    Subd. 10.    Intoxicating liquor.  "Intoxicating liquor" 
 is ethyl alcohol, distilled spirits, fermented, spirituous, 
 vinous, and fermented malt beverages containing more than 3.2 
 percent of alcohol by weight. 

    Subd. 11.    Liqueur-filled candy.  "Liqueur-filled 
 candy" is any confectionery containing more than one-half of one 
 percent alcohol by volume in liquid form that is intended for or 
 capable of beverage use. 

    Subd. 12.    Liquor Act.  For purposes of this chapter, 
 the terms defined in section 340A.101, have the meanings given 
 them in that section except as provided in this section. 

    Subd. 13.    Manufacturer.  "Manufacturer" is a person 
 who, by a process of manufacturing, fermenting, brewing, 
 distilling, refining, rectifying, blending, or by the 
 combination of different materials, prepares or produces 
 intoxicating liquor for sale. 

    Subd. 14.    Miniatures.  "Miniatures" are containers of 
 distilled spirits of two fluid ounces or less or 50 milliliters 
 or less. 

    Subd. 15.    Person.  "Person" means an individual or 
 any entity engaged in the sale of distilled spirits, wine, or 
 fermented malt beverages. 

    Subd. 16.    Retailer.  "Retailer" means a person 
 engaged in this state in the business of selling, or offering to 
 sell, distilled spirits, wine, or fermented malt beverages. 

    Subd. 17.    Table or sparkling wine.  "Table or 
 sparkling wine" is a beverage made without rectification or 
 fortification and containing not more than 25 percent alcohol by 
 volume and made by the fermentation of grapes, grape juice, 
 other fruits, or honey. 

    Subd. 18.    3.2 percent malt liquor.  "3.2 percent malt 
 liquor" is a fermented malt beverage containing not less than 
 one-half of one percent alcohol by volume nor more than 3.2 
 percent alcohol by weight. 

    Subd. 19.    Wholesaler.  "Wholesaler" is a person who 
 sells alcoholic beverages to persons to whom sale is permitted 
 under section 340A.310, from a stock maintained in a warehouse 
 in the state. 

    Subd. 20.    Wine.  "Wine" is the product made from the 
 normal alcoholic fermentation of grapes, including still wine, 
 sparkling and carbonated wine, wine made from condensed grape 
 must, wine made from other agricultural products than sound ripe 
 grapes, imitation wine, compounds sold as wine, vermouth, cider, 
 perry, and sake, in each instance containing not less than 
 one-half of one percent nor more than 24 percent alcohol by 
 volume for nonindustrial use.  Wine does not include distilled 
 spirits as defined in subdivision 7. 

    HIST: 1997 c 179 art 1 s 1; 1998 c 389 art 8 s 22 

     297G.02 Administration. 

    Subdivision 1.    Enforcement responsibility.  The 
 commissioners of public safety and revenue shall enforce and 
 administer the provisions of this chapter. 

    Subd. 2.    Nonapplicability.  This chapter does not 
 apply to: 

    (1) medicines intended for therapeutic purposes and not 
 intended as a beverage; 

    (2) industrial alcohol designed for mechanical, chemical, 
 scientific, pharmaceutical, or industrial purposes; or 

    (3) nonpotable compounds or preparations containing alcohol.

    Subd. 3.    Powers of commissioner of revenue.  The 
 commissioner, or duly authorized agents, may conduct 
 investigations, inquiries, and hearings under this chapter and, 
 in connection with such investigations, inquiries, and hearings, 
 the commissioner and the duly authorized agents shall have all 
 the powers conferred upon the commissioner and the 
 commissioner's examiners by section 270.06, and the provisions 
 of that section shall apply to all such investigations, 
 inquiries, and hearings. 

    Subd. 4.    Expenses of administration.  Expenses for 
 the administration of this chapter shall be paid out of 
 appropriations to the commissioner for the administration of 
 this chapter and shall include fees and expenses incurred by the 
 attorney general and any county attorney in litigation in 
 connection with the enforcement of this chapter.  Expenses also 
 include all court costs and expenses. 

    HIST: 1997 c 179 art 1 s 2 

     297G.03 Distilled spirits and wine; rate of tax. 

    Subdivision 1.    General rate; distilled spirits and 
 wine.  The following excise tax is imposed on all distilled 
 spirits and wine manufactured, imported, sold, or possessed in 
 this state: 

                                 Standard             Metric
 (a) Distilled spirits,      $5.03 per gallon   $1.33 per liter
 liqueurs, cordials, 
 and specialties regardless 
 of alcohol content 
 (excluding ethyl alcohol) 
 (b) Wine containing         $ .30 per gallon   $ .08 per liter 
 14 percent or less
 alcohol by volume 
 (except cider as defined 
 in section 297G.01, 
 subdivision 3a) 
 (c) Wine containing         $ .95 per gallon   $ .25 per liter
 more than 14 percent 
 but not more than 21
 percent alcohol by volume 
 (d) Wine containing more    $1.82 per gallon   $ .48 per liter
 than 21 percent but not 
 more than 24 percent
 alcohol by volume 
 (e) Wine containing more    $3.52 per gallon   $ .93 per liter
 than 24 percent alcohol
 by volume
 (f) Natural and             $1.82 per gallon   $ .48 per liter
 artificial sparkling wines
 containing alcohol 
 (g) Cider as defined in     $ .15 per gallon   $ .04 per liter
 section 297G.01,
 subdivision 3a

    In computing the tax on a package of distilled spirits or 
 wine, a proportional tax at a like rate on all fractional parts 
 of a gallon or liter must be paid, except that the tax on a 
 fractional part of a gallon less than 1/16 of a gallon is the 
 same as for 1/16 of a gallon. 

    Subd. 2.    Tax on miniatures; distilled spirits.  The 
 tax on miniatures is 14 cents per bottle. 

    Subd. 3.    Tax is metric.  The metric tax is imposed on 
 all products taxable under this section when the net contents 
 are stated in metric units of measure.  The commissioner may 
 establish by rule a date and procedure for the conversion of 
 excise tax computation and reporting from rates expressed in 
 gallons to rates expressed in metric volumes.  The official 
 conversion factor is one liter equals 0.264172 United States 
 gallons. 

    Subd. 4.    Bottle tax.  A tax of one cent is imposed on 
 each bottle or container of distilled spirits and wine except as 
 provided in 297G.07, subdivision 3.  The wholesaler is 
 responsible for the payment of this tax when the bottles of 
 distilled spirits and wine are removed from inventory for sale, 
 delivery, or shipment. 

    HIST: 1997 c 179 art 1 s 3; 1998 c 389 art 8 s 23 

     297G.04 Fermented malt beverages; rate of tax. 

    Subdivision 1.    Tax imposed.  The following excise tax 
 is imposed on all fermented malt beverages that are imported, 
 directly or indirectly sold, or possessed in this state: 

    (1) on fermented malt beverages containing not more than 
 3.2 percent alcohol by weight, $2.40 per 31-gallon barrel; and 

    (2) on fermented malt beverages containing more than 3.2 
 percent alcohol by weight, $4.60 per 31-gallon barrel. 

    For fractions of a 31-gallon barrel, the tax rate is 
 calculated proportionally. 

    Subd. 2.    Tax credit.  A qualified brewer producing 
 fermented malt beverages is entitled to a tax credit of $4.60 
 per barrel on 25,000 barrels sold in any fiscal year beginning 
 July 1, regardless of the alcohol content of the product.  
 Qualified brewers may take the credit on the 18th day of each 
 month, but the total credit allowed may not exceed in any fiscal 
 year the lesser of: 

    (1) the liability for tax; or 

    (2) $115,000. 

    For purposes of this subdivision, a "qualified brewer" 
 means a brewer, whether or not located in this state, 
 manufacturing less than 100,000 barrels of fermented malt 
 beverages in the calendar year immediately preceding the 
 calendar year for which the credit under this subdivision is 
 claimed.  In determining the number of barrels, all brands or 
 labels of a brewer must be combined.  All facilities for the 
 manufacture of fermented malt beverages owned or controlled by 
 the same person, corporation, or other entity must be treated as 
 a single brewer. 

    HIST: 1997 c 179 art 1 s 4 

     297G.05 Use tax; rate of tax. 

    Subdivision 1.    Wine and distilled spirits.  A tax is 
 imposed on the use or storage by consumers of wine and distilled 
 spirits in this state, and on such consumers, at the rates 
 specified in section 297G.03, subdivision 1. 

    Subd. 2.    Fermented malt beverages.  A tax is imposed 
 on the use or storage by consumers of fermented malt beverages 
 in this state, and on such consumers, at the rates specified in 
 section 297G.04, subdivision 1. 

    Subd. 3.    Tax provisions applicable to consumers.  All 
 of the provisions of this chapter relating to the correction of 
 returns, deficiency assessments, protests, hearings, interest 
 and penalties, and collection of taxes, apply to consumers. 

    HIST: 1997 c 179 art 1 s 5 

     297G.06 Tax as personal debt. 

    The tax imposed by this chapter, and interest and penalties 
 imposed with respect to it, is a personal debt of the person 
 required to file a return from the time the liability for it 
 arises, regardless of when the time for payment of the liability 
 occurs.  In the case of the executor or administrator of the 
 estate of a decedent and in the case of any fiduciary, the debt 
 is that of the person in the person's official or fiduciary 
 capacity only, unless the person has voluntarily distributed the 
 assets held in that capacity without reserving sufficient assets 
 to pay the tax, interest, and penalties.  In that case, the 
 person is personally liable for the deficiency. 

    HIST: 1997 c 179 art 1 s 6 

     297G.07 Exemptions from tax. 

    Subdivision 1.    Exemptions.  The following are not 
 subject to the excise tax: 

    (1) Sales by a manufacturer, brewer, or wholesaler for 
 shipment outside the state in interstate commerce. 

    (2) Alcoholic beverages sold or transferred between 
 Minnesota wholesalers. 

    (3) Sales to common carriers engaged in interstate 
 transportation of passengers, except as provided in this chapter.

    (4) Malt beverages served by a brewery for on-premise 
 consumption at no charge, or distributed to brewery employees 
 for on-premise consumption under a labor contract. 

    (5) Shipments of wine to Minnesota residents under section 
 340A.417. 

    (6) Fruit juices naturally fermented or beer naturally 
 brewed in the home for family use. 

    (7) Sales of wine for sacramental purposes under section 
 340A.316. 

    (8) Alcoholic beverages sold to authorized manufacturers of 
 food products or pharmaceutical firms.  The alcoholic beverage 
 must be used exclusively in the manufacture of food products or 
 medicines.  For purposes of this clause, "manufacturer" means a 
 person who manufactures food products intended for sale to 
 wholesalers or retailers for ultimate sale to the consumer. 

    (9) Liqueur-filled candy. 

    (10) Sales to a federal agency, that the state of Minnesota 
 is prohibited from taxing under the constitution or laws of the 
 United States or under the constitution of Minnesota. 

    (11) Sales to Indian tribes as defined in section 297G.08. 

    Subd. 2.    Importation by individuals.  (a) A person, 
 other than a person under the age of 21 years, entering 
 Minnesota from another state may have in possession one liter of 
 intoxicating liquor or 288 ounces of fermented malt beverages 
 without the required payment of the Minnesota excise tax, 
 provided the alcoholic beverages accompany the person into this 
 state and will not be offered for sale or used for any 
 commercial purposes. 

    (b) A person, other than a person under the age of 21 
 years, entering Minnesota from a foreign country may have in 
 possession four liters of intoxicating liquor or ten quarts (320 
 ounces) of fermented malt beverages without the required payment 
 of the Minnesota excise tax, provided the alcoholic beverages 
 accompany the person into this state and will not be offered for 
 sale or used for any commercial purposes. 

    (c) A collector of commemorative bottles, other than a 
 person under the age of 21 years, entering Minnesota from 
 another state may have in possession 12 or fewer commemorative 
 bottles without the required payment of the Minnesota excise tax.

    (d) This subdivision does not apply to consignments of 
 alcoholic beverages shipped into this state by holders of 
 Minnesota import licenses or Minnesota manufacturers and 
 wholesalers when licensed by the commissioner of public safety 
 or to common carriers with licenses to sell intoxicating liquor 
 in more than one state. 

    Subd. 3.    Exemptions from bottle tax.  The following 
 are exempt from the bottle tax: 

    (1) miniatures of distilled spirits and wines; 

    (2) containers of fermented malt beverage; 

    (3) containers of intoxicating liquor or wine holding less 
 than 200 milliliters; 

    (4) containers of alcoholic beverages sold and shipped to 
 dealers, wineries, or distillers in other states; 

    (5) containers of alcoholic beverages sold to other 
 Minnesota wholesalers; 

    (6) containers of alcoholic beverages sold to common 
 carriers engaged in interstate commerce; 

    (7) containers of wine intended exclusively for sacramental 
 purposes; 

    (8) containers of alcoholic beverages sold to authorized 
 food processors or pharmaceutical firms for use exclusively in 
 the manufacturing of food products or medicines; and 

    (9) sales to a federal agency, that the state of Minnesota 
 is prohibited from taxing under the constitution or laws of the 
 United States or under the constitution of Minnesota. 

    HIST: 1997 c 179 art 1 s 7 

     297G.08 Sales to Indian tribes. 

    Subdivision 1.    Wholesalers.  A wholesaler may set 
 aside the part of the wholesaler's stock necessary to make sales 
 to the established governing body of an Indian tribe recognized 
 by the United States Department of the Interior, without paying 
 the tax required by this chapter.  The amount of untaxed stock 
 that wholesalers may deliver to an Indian reservation is limited 
 to amounts necessary to meet the personal consumption needs of 
 qualified purchasers.  When shipping or delivering untaxed stock 
 to an Indian tribal organization, the wholesaler shall make a 
 true duplicate invoice.  The invoice must show the complete 
 details of the sale or delivery.  The wholesaler shall send the 
 duplicate to the commissioner not later than the 18th day of the 
 following calendar month.  If a wholesaler fails to comply with 
 the requirements of this section, the commissioner shall revoke 
 the permission granted to the wholesaler to keep a stock of 
 untaxed goods. 

    Subd. 2.    Retailers.  Retailers who are Indian tribal 
 organizations may keep untaxed stock intended for sale to 
 qualified purchasers. 

    Subd. 3.    Qualified purchasers.  A qualified purchaser 
 of untaxed liquor means only an enrolled member of the Indian 
 tribe that is offering the liquor for sale. 

    Subd. 4.    Sales to nonqualified buyers.  A retailer 
 who sells or otherwise disposes of untaxed liquor other than to 
 a qualified purchaser shall collect from the buyer or transferee 
 the tax imposed by this chapter and remit the tax to the 
 department of revenue at the same time and manner as required by 
 this chapter.  If the retailer fails to collect the tax from the 
 buyer or transferee, or fails to remit the tax, the retailer is 
 personally responsible for the tax and the commissioner may 
 seize any liquor destined to be delivered to the retailer.  The 
 procedures outlined in section 297G.20 apply to the seized 
 liquor.  The proceeds of the sale of the liquor may be applied 
 to any tax liability owed by the retailer after deducting all 
 costs and expenses.  

    This section does not relieve the buyer or possessor of 
 untaxed liquor from personal liability for the tax. 

    HIST: 1997 c 179 art 1 s 8 

     297G.09 Returns; payment of tax. 

    Subdivision 1.    Monthly returns; manufacturers, 
 wholesalers, brewers, or importers.  On or before the 18th day 
 of each calendar month following the month in which a licensed 
 manufacturer or wholesaler first sells wine and distilled 
 spirits within the state, or a brewer or importer first sells or 
 imports fermented malt beverages, or a wholesaler knowingly 
 acquires title to or possession of untaxed fermented malt 
 beverages, the licensed manufacturer, wholesaler, brewer, or 
 importer liable for the excise tax must file a return with the 
 commissioner, and in addition must keep records and render 
 reports as required by the commissioner.  Returns must be made 
 in a form and manner prescribed by the commissioner, and must 
 contain any other information required by the commissioner.  
 Returns must be accompanied by a remittance for the full unpaid 
 tax liability.  Returns must be filed regardless of whether a 
 tax is due. 

    Subd. 2.    Monthly use tax returns; consumers.  On or 
 before the 18th day of each calendar month, a consumer who has 
 acquired title to or possession of wine, distilled spirits, or 
 fermented malt beverages for use or storage in this state, upon 
 which wine, distilled spirits, or fermented malt beverages the 
 tax imposed by this chapter has not been paid, shall file a 
 return with the commissioner in the month following the month in 
 which the consumer obtains title to or possession of the wine, 
 distilled spirits, or fermented malt beverages.  Returns must be 
 made in a form and manner prescribed by the commissioner and 
 must contain any other information required by the commissioner. 
 Returns must be accompanied by a remittance for the full unpaid 
 tax liability. 

    Subd. 3.    Common carrier returns.  A common carrier 
 engaged in interstate transportation of passengers must file 
 monthly reports together with the tax payment on the sale of 
 alcoholic beverages sold in Minnesota.  The report and payment 
 must be filed by the 18th day of the month following the month 
 in which the sale took place.  A common carrier is permitted to 
 use a formula for the allocation of the total sales of alcoholic 
 beverages among states on the basis of passenger miles in each 
 state or some other method of allocation if written approval is 
 received from the commissioner. 

    Subd. 4.    Extensions.  When in the commissioner's 
 judgment, good cause exists, the commissioner may extend the 
 time for filing liquor tax returns for not more than six 
 months.  The commissioner may require the taxpayer to file a 
 tentative return when the regularly required return is due, and 
 pay a tax on the basis of the tentative return at the times 
 required for the payment of taxes on the basis of the regularly 
 required return. 

    Subd. 5.    Accelerated tax payment; penalty.  A person 
 liable for tax under this chapter having a liability of $120,000 
 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 
 taxpayer shall remit the actual May liability and 75 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 taxpayer 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) 70 percent of the actual June liability; or 

    (2) 75 percent of the preceding May liability. 

    Subd. 6.    Electronic funds transfer.  A licensed 
 brewer, importer, or wholesaler having an excise tax liability 
 of $120,000 or more during a fiscal year ending June 30 must 
 remit all excise tax liabilities in the subsequent calendar year 
 by means of a funds transfer as defined in section 336.4A-104, 
 paragraph (a).  The funds transfer payment date, as defined in 
 section 336.4A-401, must be on or before the date the excise tax 
 is due.  If the date the excise tax is due is not a funds 
 transfer business day, as defined in section 336.4A-105, 
 paragraph (a), clause (4), the payment date must be on or before 
 the funds transfer business day next following the date the 
 excise tax is due. 

    Subd. 7.    Order payments credited.  All payments 
 received may, in the discretion of the commissioner, be credited 
 first to the oldest liability not secured by a judgment or lien, 
 but in all cases must be credited first to penalties, next to 
 interest, and then to the tax due. 

    Subd. 8.    Interest.  The amount of tax not timely 
 paid, together with any penalty imposed by this chapter, bears 
 interest at the rate specified in section 270.75 from the time 
 the tax should have been paid until paid.  Any interest and 
 penalty is added to the tax and collected as a part of it. 

    HIST: 1997 c 179 art 1 s 9 

     297G.10 Deposit of proceeds. 

    All tax revenues and other receipts payable to the state 
 under this chapter must be paid into the state treasury and 
 credited to the general fund. 

    HIST: 1997 c 179 art 1 s 10 

     297G.11 Informational reports. 

    The following persons shall file with the commissioner a 
 monthly informational report in the form and manner prescribed 
 by the commissioner: 

    (1) a manufacturer, wholesaler, and importer licensed to 
 ship distilled spirits or wine into Minnesota; 

    (2) a person who manufactures distilled spirits or wine in 
 Minnesota; 

    (3) any other person who imports distilled spirits or wine 
 into Minnesota; 

    (4) a person who possesses, receives, stores, or warehouses 
 distilled spirits or wine in Minnesota, upon which the tax 
 imposed by this chapter has not been paid; and 

    (5) a person who possesses, receives, stores, or warehouses 
 distilled spirits or wine in Minnesota, which are required to 
 give bond as required by the Internal Revenue Code, subtitle E, 
 chapter 51. 

    No payment of any tax is required to be remitted with this 
 report.  The report must be filed on or before the tenth day 
 following the end of each calendar month, regardless of whether 
 or not the person shipped, manufactured, possessed, received, 
 stored, or warehoused any distilled spirits or wine into or 
 within Minnesota during the previous month, unless the 
 commissioner determines that a longer filing period is 
 appropriate for a particular person.  A person failing to file 
 this report is subject to the civil or criminal penalties 
 imposed by this chapter. 

    This section does not apply to the lawful importation of 
 wine and distilled spirits under section 297G.07, subdivision 2, 
 nor to any lawful manufacture of wine or distilled spirits 
 within the state for personal consumption. 

    HIST: 1997 c 179 art 1 s 11 

     297G.12 Refunds. 

    Subdivision 1.    Overpayment of tax.  An overpayment of 
 the tax imposed under this chapter may be refunded to the 
 taxpayer, provided that the claim for refund is filed within the 
 time prescribed under section 297G.16. 

    Subd. 2.    Products destroyed.  The commissioner may 
 refund to a taxpayer the amount of tax paid under this chapter 
 on intoxicating liquor or fermented malt beverages which become 
 unfit for human consumption and are destroyed under an order by 
 a federal, state, or local agency while being held for sale by a 
 licensed retailer.  The destruction must meet the requirements 
 of the environmental laws of this state. 

    Subd. 3.    Wholesaler refund for breakage of inventory. 
  The commissioner may refund to a wholesaler the amount of tax 
 paid under this chapter for the breakage of inventory not 
 subject to reimbursement from any insurance proceeds.  The 
 commissioner may prescribe the method of proof for obtaining the 
 refund. 

    Subd. 4.    Retailer refund for breakage of inventory.  
 Refunds for breakage of inventory may be made to retailers only 
 if satisfactory proof is presented to the commissioner by the 
 wholesaler and the licensed retailer that the retailer was not 
 indemnified by insurance for the tax.  The commissioner may 
 prescribe the method of proof required for obtaining the refund. 

    Subd. 5.    Bad debts.  The commissioner may adopt rules 
 providing a refund of the tax paid under this chapter on 
 intoxicating liquor or wine if the tax paid qualifies as a bad 
 debt under section 166(a) of the Internal Revenue Code. 

    Subd. 6.    Credit against tax.  The commissioner may 
 credit the amount determined under this section against taxes 
 otherwise payable under this chapter by the taxpayer. 

    Subd. 7.    Source of refund.  There is appropriated 
 annually from the general fund to the commissioner the sums 
 necessary to make the refunds provided by this section. 

    HIST: 1997 c 179 art 1 s 12 

     297G.13 Inspection rights. 

    The commissioner of public safety or the commissioner of 
 revenue, or their duly authorized employees, may, at any 
 reasonable time, without notice and without a search warrant, 
 enter in and upon a licensed premises, and examine the books, 
 papers, and records of a brewer, manufacturer, wholesaler, or 
 retailer for the purpose of determining whether the excise tax 
 has been paid, and may in addition inspect any premises where 
 fermented malt beverages are manufactured, sold, offered for 
 sale, possessed, or stored for the purpose of determining 
 whether the party is in full compliance with the provisions of 
 this chapter. 

    HIST: 1997 c 179 art 1 s 13 

     297G.14 Examinations and audits. 

    Subdivision 1.    Examination of taxpayer.  To determine 
 the accuracy of a return or report, or for the purpose of 
 collection, or in fixing liability or verifying information 
 regarding any tax under this chapter, the commissioner may make 
 reasonable examinations or investigations of a taxpayer's place 
 of business, tangible personal property, equipment, computer 
 systems and facilities, pertinent books, records, papers, 
 vouchers, computer printouts, accounts, and documents. 

    Subd. 2.    Access to records of other persons in 
 connection with examination of taxpayer.  When conducting an 
 investigation or an audit of a taxpayer, or for the purpose of 
 collection, or in fixing liability or verifying information 
 regarding any tax under this chapter, the commissioner may 
 examine, except where privileged by law, the relevant records 
 and files of a person, business, institution, financial 
 institution, state agency, agency of the United States 
 government, or agency of any other state where permitted by 
 statute, agreement, or reciprocity.  The commissioner may compel 
 production of these records by subpoena. A subpoena may be 
 served directly by the commissioner. 

    Subd. 3.    Power to compel testimony.  In the 
 administration of any tax under this chapter, the commissioner 
 may: 

    (1) administer oaths or affirmations and compel by subpoena 
 the attendance of witnesses, testimony, and the production of a 
 person's pertinent books, records, papers, and other data for 
 inspection and copying; 

    (2) examine under oath or affirmation any person regarding 
 the business of a taxpayer concerning any relevant matter 
 incident to the administration of any tax under this chapter.  
 The fees of witnesses required by the commissioner to attend a 
 hearing are equal to those allowed to witnesses appearing before 
 courts of this state.  The fees must be paid in the manner 
 provided for the payment of other expenses incident to the 
 administration of any tax under this chapter; and 

    (3) in addition to other remedies that may be available, 
 bring an action in equity by the state against a taxpayer for an 
 injunction ordering the taxpayer to file a complete and proper 
 return or amended return.  The district courts of this state 
 have jurisdiction over the action and disobedience of an 
 injunction issued under this clause may be punished as a 
 contempt of district court. 

    Subd. 4.    Third-party subpoena where taxpayer's identity 
 is known.  An investigation may extend to a person that the 
 commissioner determines has access to information that may be 
 relevant to the examination or investigation.  When a subpoena 
 requiring the production of records as described in subdivision 
 2 is served on a third-party recordkeeper, written notice of the 
 subpoena must be mailed to the taxpayer and to any other person 
 who is identified in the subpoena.  The notices must be given 
 within three days of the day on which the subpoena is served.  
 Notice to the taxpayer required by this section is sufficient if 
 it is mailed to the last address on record with the commissioner.

    The provisions of this subdivision relating to notice to 
 the taxpayer or other parties identified in the subpoena do not 
 apply if there is reasonable cause to believe that the giving of 
 notice may lead to attempts to conceal, destroy, or alter 
 records relevant to the examination, to prevent the 
 communication of information from other persons through 
 intimidation, bribery, or collusion, or to flee to avoid 
 prosecution, testifying, or production of records. 

    Subd. 5.    Third-party subpoena where taxpayer's identity 
 is not known.  A subpoena that does not identify the person or 
 persons whose tax liability is investigated may be served only 
 if: 

    (1) the subpoena relates to the investigation of a 
 particular person or an ascertainable group or class of persons; 

    (2) there is reasonable basis for believing that the person 
 or group or class of persons may fail or may have failed to 
 comply with the tax laws administered by the commissioner; 

    (3) the information sought to be obtained from the 
 examination of the records, and the identity of the person or 
 persons with respect to whose liability the subpoena is issued, 
 is not readily available from other sources; 

    (4) the subpoena is clear and specific concerning the 
 information sought to be obtained; and 

    (5) the information sought to be obtained is limited solely 
 to the scope of the investigation. 

    The party served with a subpoena that does not identify the 
 person or persons with respect to whose tax liability the 
 subpoena is issued may, within 20 days after service of the 
 subpoena, petition the district court in the judicial district 
 in which that party is located for a determination concerning 
 whether the commissioner has complied with all the requirements 
 in clauses (1) to (5), and thus, whether the subpoena is 
 enforceable.  If no petition is made by the party served within 
 the time prescribed, the subpoena has the effect of a court 
 order. 

    Subd. 6.    Request by taxpayer for subpoena.  When the 
 commissioner has the power to issue a subpoena for investigative 
 or auditing purposes, the commissioner shall honor a reasonable 
 request by the taxpayer to issue a subpoena on the taxpayer's 
 behalf, if in connection with the investigation or audit. 

    Subd. 7.    Application to court for enforcement of 
 subpoena.  Disobedience of subpoenas issued under this section 
 shall be punished by the district court of the district in which 
 the party served with the subpoena is located, in the same 
 manner as contempt of the district court. 

    Subd. 8.    Cost of production of records.  The cost of 
 producing records of a third party required by a subpoena must 
 be paid by the taxpayer, if the taxpayer requests the subpoena 
 to be issued, or if the taxpayer has the records available but 
 has refused to provide them to the commissioner.  In other cases 
 when the taxpayer cannot produce records and the commissioner 
 then initiates a subpoena for third-party records, the 
 commissioner shall pay the reasonable cost of producing the 
 records.  The commissioner may later assess the reasonable costs 
 against the taxpayer if the records contribute to the 
 determination of an assessment of tax against the taxpayer. 

    Subd. 9.    Physical inventory.  The commissioner or the 
 commissioner's authorized agents may, as considered necessary, 
 require a manufacturer, wholesaler, or retailer to furnish a 
 physical inventory of all wine and distilled spirits in stock.  
 The inventory must contain the information that the commissioner 
 requests and must be certified by an officer of the corporation. 

    HIST: 1997 c 179 art 1 s 14 

     297G.15 Assessments. 

    Subdivision 1.    General rule.  The commissioner shall 
 make determinations, corrections, and assessments with respect 
 to any tax under this chapter, including interest, additions to 
 taxes, and assessable penalties.  The commissioner may use 
 statistical or other sampling techniques consistent with 
 generally accepted auditing standards in examining returns or 
 records and making assessments. 

    Subd. 2.    Commissioner filed returns.  If a taxpayer 
 fails to file a required return, the commissioner, from 
 information in the commissioner's possession or obtainable by 
 the commissioner, may make a return for the taxpayer.  The 
 return is prima facie correct and valid. 

    Subd. 3.    Order of assessment; notice and demand to 
 taxpayer.  (a) When a return has been filed and the 
 commissioner determines that the tax disclosed by the return is 
 different than the tax determined by the examination, the 
 commissioner shall send an order of assessment to the taxpayer.  
 When no return has been filed, the commissioner may make a 
 return for the taxpayer under subdivision 2 or may send an order 
 of assessment under this subdivision.  The order must explain 
 the basis for the assessment and must explain the taxpayer's 
 appeal rights.  An order of assessment is final when made but 
 may be reconsidered by the commissioner under this chapter. 

    (b) The taxes are considered assessed when the commissioner 
 has prepared a notice of tax assessment and mailed it to the 
 person required to file a return to the post office address 
 given in the return.  The notice of tax assessment must be sent 
 by mail to the post office address given in the return and the 
 record of the mailing is presumptive evidence of the giving of 
 notice, and such records must be preserved by the commissioner. 

    (c) No collection action can be taken, including the filing 
 of liens under section 270.69, and no late payment penalty under 
 this chapter is imposed when a return has been filed for the 
 taxable period upon which the order is based, if the amount 
 shown on the order is paid to the commissioner: 

    (1) within 60 days after the order has been mailed to the 
 taxpayer by the commissioner; or 

    (2) if an administrative appeal is filed under this 
 chapter, or a tax court appeal is filed under chapter 271, 
 within 60 days following final determination of the appeal if 
 the appeal is based upon a constitutional challenge to the tax, 
 and if not, when the decision of the tax court is made. 

    Subd. 4.    Erroneous refunds or credits.  An erroneous 
 refund or credit is considered an underpayment of tax on the 
 date made.  An assessment of a deficiency arising out of an 
 erroneous refund or credit must be made within 3-1/2 years from 
 the date prescribed for filing the return, plus any extension of 
 time granted for filing the return, but only if filed within the 
 extended time, or two years from the time the tax is paid in 
 full, whichever period expires later. 

    Subd. 5.    Assessment presumed valid.  A return or 
 assessment of tax made by the commissioner is prima facie 
 correct and valid.  The taxpayer has the burden of establishing 
 its incorrectness or invalidity in any related action or 
 proceeding. 

    Subd. 6.    Aggregate refund or assessment.  The 
 commissioner, on examining returns of a taxpayer for more than 
 one year or period, may issue one order covering the period 
 under examination that reflects the aggregate refund or 
 additional tax due. 

    Subd. 7.    Sufficiency of notice.  An order of 
 assessment, sent postage prepaid by United States mail to the 
 taxpayer at the taxpayer's last known address, is sufficient 
 even if the taxpayer is deceased or is under a legal disability, 
 or, in the case of a corporation, has terminated its existence, 
 unless the department has been provided with a new address by a 
 party authorized to receive notices of assessment. 

    HIST: 1997 c 179 art 1 s 15 

     297G.16 Statutes of limitations. 

    Subdivision 1.    General rule.  Except as otherwise 
 provided in this chapter, the amount of any tax due must be 
 assessed within 3-1/2 years after a return is filed.  

    Subd. 2.    Date of filing.  For the purposes of this 
 section, a return filed before the last day prescribed by law 
 for filing is considered filed on the last day. 

    Subd. 3.    False or fraudulent return or claim for 
 refund; no return.  When a person required to file a return 
 under this chapter files a false or fraudulent return or claim 
 for refund, or fails to file a return, the tax may be assessed, 
 and a proceeding in court for the collection of such tax may be 
 begun at any time. 

    Subd. 4.    Omission in excess of 25 percent.  If a 
 person required to file a return omits from the return an amount 
 properly includable in it that is in excess of 25 percent of the 
 amount of tax reported in the return, the tax may be assessed, 
 or a proceeding in court for the collection of the tax may be 
 begun, at any time within 6-1/2 years after the return was filed.

    Subd. 5.    Time limit for refunds.  Unless otherwise 
 provided in this chapter, a claim for a refund of an overpayment 
 of tax must be filed within 3-1/2 years from the date prescribed 
 for filing the return, plus any extension of time granted for 
 filing the return, but only if filed within the extended time, 
 or two years from the time the tax is paid in full, whichever 
 period expires later.  Claimants under this section are subject 
 to the notice requirements of section 289A.38, subdivision 7. 

    Subd. 6.    Time limit for a destruction order refund.  
 Claims for refund under section 297G.12, subdivision 2, must be 
 filed with the commissioner within one year from the date of the 
 breakage or destruction order. 

    Subd. 7.    Time limit for a bad debt deduction.  Claims 
 for refund must be filed with the commissioner within one year 
 of the filing of the taxpayer's income tax return containing the 
 bad debt deduction that is being claimed. 

    Subd. 8.    Consent to extend time.  If, before the 
 expiration of the time prescribed in this chapter for the 
 assessment of the tax, the commissioner and the person filing 
 the return consent in writing to an extension of time for the 
 assessment of the tax, the tax may be assessed at any time 
 before the expiration of the period agreed upon.  The period so 
 agreed upon may be extended by subsequent agreements in writing 
 made before the expiration of the period previously agreed upon. 

    Subd. 9.    Bankruptcy; suspension of time.  The running 
 of the period during which a tax must be assessed or collection 
 proceedings commenced is suspended during the period from the 
 date of a filing of a petition in bankruptcy until 30 days after 
 either notice to the commissioner that the bankruptcy 
 proceedings have been closed or dismissed, or the automatic stay 
 has been terminated or has expired, whichever occurs first. 

    The suspension of the statute of limitations under this 
 section applies to the person the petition in bankruptcy is 
 filed against and other persons who may also be wholly or 
 partially liable for the tax. 

    HIST: 1997 c 179 art 1 s 16 

     297G.17 Interest. 

    Subdivision 1.    Interest rate.  When interest is 
 required under this section, interest is computed at the rate 
 specified in section 270.75. 

    Subd. 2.    Late payment.  If a tax under this chapter 
 is not paid within the time named by law for payment, the unpaid 
 tax bears interest from the date the tax should have been paid 
 until the date the tax is paid. 

    Subd. 3.    Extensions.  When an extension of time for 
 payment has been granted, interest must be paid from the date 
 the payment should have been made, if no extension had been 
 granted, until the date the tax is paid. 

    Subd. 4.    Additional assessments.  When a taxpayer is 
 liable for additional taxes because of a redetermination by the 
 commissioner, or for any other reason, the additional taxes bear 
 interest from the time the tax should have been paid, without 
 regard to an extension allowed, until the date the tax is paid. 

    Subd. 5.    Erroneous refunds or credits.  In the case 
 of an erroneous refund or credit, interest begins to accrue from 
 the date the refund or credit was paid unless the erroneous 
 refund or credit results from a mistake of the department, in 
 which case no interest or penalty is imposed, unless the 
 deficiency assessment is not satisfied within 60 days of the 
 order. 

    Subd. 6.    Interest on judgments.  Notwithstanding 
 section 549.09, if judgment is entered in favor of the 
 commissioner with regard to any tax under this chapter, the 
 judgment bears interest at the rate given in section 270.75 from 
 the date the judgment is entered until the date of payment. 

    Subd. 7.    Interest on penalties.  (a) A penalty 
 imposed under section 297G.18, subdivisions 2 to 7, bears 
 interest from the date the return or payment was required to be 
 filed or paid, including any extensions, to the date of payment 
 of the penalty. 

    (b) A penalty not included in paragraph (a) bears interest 
 only if it is not paid within ten days from the date of the 
 notice.  In that case interest is imposed from the date of 
 notice to the date of payment. 

    Subd. 8.    Interest on overpayments.  Interest must be 
 paid on an overpayment refunded or credited to the taxpayer from 
 the date of payment of the tax until the date the refund is paid 
 or credited. 

    HIST: 1997 c 179 art 1 s 17 

     297G.18 Civil penalties. 

    Subdivision 1.    General rule.  The commissioner may 
 recover the amount of any tax due under this chapter, as well as 
 any interest and penalty in a civil action.  The collection of a 
 tax, interest, or penalty does not bar any prosecution under 
 this chapter. 

    Subd. 2.    Penalty for failure to pay tax.  If a tax 
 imposed by this chapter is not paid within the time specified 
 for payment, a penalty is added to the amount required to be 
 shown as tax.  The penalty is five percent of the tax not paid 
 on or before the date specified for payment of the tax if the 
 failure is for not more than 30 days, with an additional penalty 
 of five percent of the amount of tax remaining unpaid during 
 each additional 30 days or fraction of 30 days during which the 
 failure continues, not exceeding 15 percent in the aggregate. 

    Subd. 3.    Penalty for failure to make and file return. 
  If a taxpayer fails to make and file a return within the time 
 prescribed, including any extension, a penalty of five percent 
 of the amount of tax not timely paid is added to the tax.  If no 
 tax is due, a penalty of $25 is assessed for each unfiled return.

    Subd. 4. Repealed, 1999 c 243 art 16 s 39 

    Subd. 5.    Penalty for intentional disregard of law or 
 rules.  If part of an additional assessment is due to 
 negligence or intentional disregard of the provisions of the 
 applicable tax laws or rules of the commissioner, but without an 
 intent to defraud, there must be added to the tax an amount 
 equal to ten percent of the additional assessment. 

    Subd. 6.    Penalty for repeated failures to file or pay 
 taxes.  If there is a pattern by a person of repeated failures 
 to timely file returns or timely pay taxes, and written notice 
 is given that a penalty will be imposed if such failures 
 continue, a penalty of 25 percent of the amount of tax not 
 timely paid as a result of each such subsequent failure is added 
 to the tax.  The penalty can be abated under the abatement 
 authority in section 270.07, subdivisions 1, paragraph (e), and 
 6. 

    Subd. 7.    Penalty for false or fraudulent return; 
 evasion.  If a person files a false or fraudulent return, or 
 attempts in any manner to evade or defeat a tax or payment of 
 tax, there is imposed on the person a penalty equal to 50 
 percent of the tax due for the period to which the return 
 related, less amounts paid by the person on the basis of the 
 false or fraudulent return. 

    Subd. 8.    Revocation or suspension of license.  The 
 commissioner may certify to the commissioner of public safety 
 any failure to pay taxes when due as a violation of the statute 
 relating to the sale of intoxicating liquor for possible 
 revocation or suspension of license. 

    Subd. 9.    Failure to file informational returns.  A 
 person required to file informational returns or reports that 
 fails to do so as required by this chapter is assessed a $25 
 penalty for each month the return remains unfiled. 

    Subd. 10.    Payment of penalties.  The penalties 
 imposed by this section are collected and paid in the same 
 manner as taxes. 

    Subd. 11.    Penalties are additional.  The civil 
 penalties imposed by this section are in addition to the 
 criminal penalties imposed by this chapter. 

    HIST: 1997 c 179 art 1 s 18 

     297G.19 Criminal penalties. 

    Subdivision 1.    Penalties for failure to file or pay.  
 (a) A person required to file a return, report, or other 
 document with the commissioner who fails to do so is guilty of a 
 misdemeanor.  

    (b) A person required to pay or to collect and remit a tax 
 under this chapter, who fails to do so when required, is guilty 
 of a misdemeanor. 

    Subd. 2.    Penalties for knowing failure to file or pay. 
  (a) A person required to file a return, report, or other 
 document with the commissioner, who knowingly, rather than 
 accidentally, inadvertently, or negligently, fails to file it 
 when required, is guilty of a gross misdemeanor.  

    (b) A person required to pay or to collect and remit a tax 
 under this chapter, who knowingly, rather than accidentally, 
 inadvertently, or negligently, fails to file it when required, 
 is guilty of a gross misdemeanor. 

    Subd. 3.    False or fraudulent returns; penalties.  (a) 
 A person who files with the commissioner a return, report, or 
 other document, known by the person to be fraudulent or false 
 concerning a material matter, is guilty of a felony. 

    (b) A person who knowingly aids or assists in, or advises 
 in the preparation or presentation of a return, report, or other 
 document that is fraudulent or false concerning a material 
 matter, whether or not the falsity or fraud is committed with 
 the knowledge or consent of the person authorized or required to 
 present the return, report, or other document, is guilty of a 
 felony. 

    Subd. 4.    Importation from another state.  (a) A 
 person entering Minnesota from another state who imports or 
 possesses more than one liter, but fewer than 25 liters of 
 untaxed intoxicating liquor, or more than 288 ounces (nine 
 quarts), but fewer than 6,800 ounces (225 quarts) of untaxed 
 fermented malt beverages is guilty of a misdemeanor. 

    (b) A person entering Minnesota from another state who 
 imports or possesses 25 liters or more, but fewer than 225 
 liters of untaxed intoxicating liquor, or 6,800 ounces (225 
 quarts) or more, but fewer than 34,000 ounces (1,225 quarts) of 
 untaxed fermented malt beverages is guilty of a gross 
 misdemeanor. 

    (c) A person entering Minnesota from another state who 
 imports or possesses 225 liters or more of untaxed intoxicating 
 liquor, or 34,000 ounces (1,225 quarts) or more of untaxed 
 fermented malt beverages is guilty of a felony. 

    Subd. 5.    Importation from a foreign country.  (a) A 
 person entering Minnesota from a foreign country who imports or 
 possesses more than four liters, but fewer than 100 liters of 
 untaxed intoxicating liquor, or more than 320 ounces (ten 
 quarts), but fewer than 8,000 ounces (250 quarts) of untaxed 
 fermented malt beverages is guilty of a misdemeanor. 

    (b) A person entering Minnesota from a foreign country who 
 imports or possesses 100 liters or more, but fewer than 500 
 liters of untaxed intoxicating liquor, or 8,000 ounces (250 
 quarts) or more, but fewer than 40,000 ounces (1,250 quarts) of 
 untaxed fermented malt beverages is guilty of a gross 
 misdemeanor. 

    (c) A person entering Minnesota from a foreign country who 
 imports or possesses 500 liters or more of untaxed intoxicating 
 liquor, or 40,000 ounces (1,250 quarts) or more of untaxed 
 fermented malt beverages is guilty of a felony. 

    Subd. 6.    Penalties are additional.  Criminal 
 penalties imposed by this section are in addition to any civil 
 penalties imposed by this chapter. 

    Subd. 7.    Other penalties.  Any violation of this 
 chapter unless otherwise specified is a misdemeanor. 

    Subd. 8.    Statute of limitations.  Notwithstanding 
 section 628.26, or any other provision of the criminal laws of 
 this state, an indictment may be found and filed, or a complaint 
 filed, upon a criminal offense named in this section, in the 
 proper court within six years after the offense is committed. 

    HIST: 1997 c 179 art 1 s 19 

     297G.20 Contraband. 

    Subdivision 1.    Contraband defined.  The following are 
 declared to be contraband and therefore subject to civil and 
 criminal penalties and seizure under this chapter: 

    (1) All distilled spirits, wine, and fermented malt 
 beverages possessed or held with intent to sell without payment 
 of an excise tax. 

    (2) All distilled spirits, wine, and fermented malt 
 beverages sold without payment of an excise tax. 

    (3) All distilled spirits, wine, and fermented malt 
 beverages transported without payment of an excise tax. 

    (4) Devices 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 
 distilled spirits, wine, and fermented malt beverages which are 
 contraband under this subdivision. 

    Subd. 2.    Exception.  When distilled spirits, wine, 
 and fermented malt beverages are being transported in the course 
 of interstate commerce, or are in movement from either a public 
 warehouse to a wholesaler upon orders from a manufacturer or 
 wholesaler, or from one wholesaler to another, the distilled 
 spirits, wine, and fermented malt beverages are not contraband, 
 notwithstanding the provisions of subdivision 1. 

    Subd. 3.    Seizure.  Distilled spirits, wine, fermented 
 malt beverages, or other property made contraband by subdivision 
 1 may be seized by the commissioner of revenue or public safety 
 and their authorized agents or by any sheriff or other police 
 officer, with or without process, and are subject to forfeiture 
 as provided in subdivisions 4 and 5. 

    Subd. 4.    Inventory; judicial determination; appeal; 
 disposition of seized property.  (a) Within ten days after the 
 seizure of alleged contraband, the person making the seizure 
 shall make available an inventory of the property seized to the 
 person from whom the property was seized, if known, and file a 
 copy with both the commissioners of revenue and public safety. 
 Within ten days after the date of service of the inventory, the 
 person from whom the property was seized or any person claiming 
 an interest in the property may file with the seizing authority 
 a demand for judicial determination of whether the property was 
 lawfully subject to seizure and forfeiture.  Within 60 days 
 after the date of the filing of the demand, the seizing 
 authority must bring an action in the district court of the 
 county where seizure was made to determine the issue of 
 forfeiture. 

    (b) The action must be brought in the name of the state and 
 must be prosecuted by the county attorney or by the attorney 
 general.  The court shall hear the action without a jury and 
 determine the issues of fact and law involved. 

    (c) If a judgment of forfeiture is entered, the seizing 
 authority may, unless the judgment is stayed pending an appeal, 
 either: 

    (1) cause the forfeited property to be destroyed; or 

    (2) cause it to be sold at a public auction as provided by 
 law. 

    (d) If demand for judicial determination is made and no 
 action is commenced by the seizing authority as provided in this 
 subdivision, the property must be released by the seizing 
 authority and delivered to the person entitled to it.  If no 
 demand is made, the property seized is considered forfeited to 
 the seizing authority by operation of law and may be disposed of 
 by the seizing authority as provided for a judgment of 
 forfeiture.  When the seizing authority is satisfied that a 
 person from whom property is seized was acting in good faith and 
 without intent to evade the tax imposed by this chapter, the 
 seizing authority shall release the property seized without 
 further legal proceedings. 

    Subd. 5.    Disposal.  (a) The property described in 
 subdivision 1, clause (4), must be confiscated after conviction 
 of the person from whom it was seized, upon compliance with the 
 following procedure:  the seizing authority shall file with the 
 court a separate complaint against the property, describing it 
 and charging its use in the specific violation, and specifying 
 substantially the time and place of the unlawful use.  A copy of 
 the complaint must be served upon the defendant or person in 
 charge of the seizure, if any.  

    (b) If the person arrested is acquitted, the court shall 
 dismiss the complaint against the property and order it returned 
 to the persons legally entitled to it.  Upon conviction of the 
 person arrested, the court shall issue an order directed to any 
 person known or believed to have any right, title, or interest 
 in, or lien upon, any of the property, and to persons unknown 
 claiming any right, title, interest, or lien in it, describing 
 the property and (1) stating that it was seized and that a 
 complaint against it, charging the specified violation, has been 
 filed with the court, (2) requiring the persons to file with the 
 court administrator their answer to the complaint, setting forth 
 any claim they may have to any right or title to, interest in, 
 or lien upon the property, within 30 days after the service of 
 the order, and (3) notifying them in substance that if they fail 
 to file their answer within the time, the property will be 
 ordered sold by the seizing authority.  

    (c) The court shall cause the order to be served upon any 
 person known or believed to have any right, title, interest, or 
 lien as in the case of a summons in a civil action, and upon 
 unknown persons by publication, as provided for service of 
 summons in a civil action.  If an answer is filed within the 
 time provided, the court shall fix a time for hearing, which 
 must not be less than ten nor more than 30 days after the time 
 for filing the answer expires.  If no answer is filed within the 
 time prescribed, upon affidavit by the court administrator, 
 setting forth the fact, the court shall order the property sold 
 by the seizing authority.  Seventy-five percent of the proceeds 
 of the sale of forfeited property, after payment of seizure, 
 storage, forfeiture, and sale expenses, must be forwarded to the 
 seizing authority for deposit as a supplement to its operating 
 fund or similar fund for official use, and 25 percent must be 
 forwarded to the county attorney or other prosecuting agency 
 that handled the forfeiture for deposit as a supplement to its 
 operating fund or similar fund for prosecutorial purposes. 

    (d) At the time fixed for hearing, unless continued for 
 cause, the matter must be heard and determined by the court, 
 without a jury as in other civil actions.  If the court finds 
 that the property, or any part of it, was used in the violation 
 specified in the complaint, it shall order the unlawfully used 
 property sold as provided by law, unless the owner shows to the 
 satisfaction of the court that the owner had no notice or 
 knowledge or reason to believe that the property was used or 
 intended to be used in the violation.  The officer making a 
 sale, after deducting the expense of keeping the property, the 
 fee for seizure, and the costs of the sale, shall pay all liens 
 according to their priority, which are established at the 
 hearing as being bona fide and as existing without the lienor 
 having any notice or knowledge that the property was being used 
 or was intended to be used for or in connection with the 
 violation specified in the order of the court, and shall pay the 
 balance of the proceeds to the seizing authority for official 
 use and sharing in the manner provided in paragraph (a).  A sale 
 under this section frees the property from all liens on it.  
 Appeal from the order of the district is available as in other 
 civil cases. 

    (e) At any time after seizure of the articles specified in 
 this subdivision, and before the hearing provided for, the 
 property must be returned to the owner or person having a legal 
 right to its possession, upon execution of a good and valid bond 
 to the state, with corporate surety, in the sum of at least $100 
 and not more than double of the value of the property seized, to 
 be approved by the court in which the case is triable, or a 
 judge of it, conditioned to abide any order and the judgment of 
 the court, and to pay the full value of the property at the time 
 of the seizure.  The seizing authority may dismiss the 
 proceedings outlined in this subdivision when the seizing 
 authority considers it in the public interest to do so. 

    HIST: 1997 c 179 art 1 s 20 

     297G.21 Administrative review. 

    Subdivision 1.    Taxpayer right to reconsideration.  A 
 taxpayer may obtain reconsideration by the commissioner of an 
 order assessing any tax imposed by this chapter, a denial of a 
 request for abatement of penalty, or a denial of a claim for 
 refund by filing an administrative appeal under subdivision 3.  
 A taxpayer cannot obtain reconsideration under this section if 
 the action taken by the commissioner is the outcome of an 
 administrative appeal. 

    Subd. 2.    Notice date.  For purposes of this section, 
 the term "notice date" means the date of the order adjusting the 
 tax or order denying a request for abatement, or, in the case of 
 a denied refund, the date of the notice of denial. 

    Subd. 3.    Time and content for administrative appeal.  
 Within 60 days after the notice date, the taxpayer must file a 
 written appeal with the commissioner.  The appeal need not be in 
 any particular form but must contain the following information: 

    (1) the name and address of the taxpayer; 

    (2) if a corporation, the state of incorporation of the 
 taxpayer, and the principal place of business of the 
 corporation; 

    (3) the Minnesota identification number or social security 
 number of the taxpayer; 

    (4) the type of tax involved; 

    (5) the date; 

    (6) the tax years or periods involved and the amount of tax 
 involved for each year or period; 

    (7) the findings in the notice that the taxpayer disputes; 

    (8) a summary statement that the taxpayer relies on for 
 each exception; and 

    (9) the taxpayer's signature or signature of the taxpayer's 
 duly authorized agent. 

    Subd. 4.    Extensions.  When requested in writing and 
 within the time allowed for filing an administrative appeal, the 
 commissioner may extend the time for filing an appeal for a 
 period of not more than 30 days from the expiration of the 60 
 days from the notice date. 

    Subd. 5.    Determination of appeal.  On the basis of 
 applicable law and available information, the commissioner shall 
 determine the validity, if any, in whole or part of the appeal 
 and notify the taxpayer of the decision.  This notice must be in 
 writing and contain the basis for the determination. 

    Subd. 6.    Agreement determining tax liability.  When 
 it appears to be in the best interests of the state, the 
 commissioner may settle any taxes, penalties, or interest that 
 the commissioner has under consideration by virtue of an appeal 
 filed under this section.  An agreement must be in writing and 
 signed by the commissioner and the taxpayer, or the taxpayer's 
 representative authorized by the taxpayer to enter into an 
 agreement.  The agreement shall be final and conclusive and, 
 except upon a showing of fraud or malfeasance, or 
 misrepresentation of a material fact, the case shall not be 
 reopened as to the matters agreed upon.  

    Subd. 7.    Appeal of an administrative determination.  
 Following the determination of an appeal and notwithstanding any 
 period of limitations for making assessments or other 
 determinations to the contrary, the commissioner shall issue an 
 order reflecting that disposition.  If the statute of 
 limitations for making assessments or other determinations would 
 have expired before the issuance of this order, except for this 
 section, the order is limited to issues or matters contained in 
 the appealed determination.  The order is appealable to the 
 Minnesota tax court under section 271.06. 

    Subd. 8.    Appeal where no determination.  If the 
 commissioner does not make a determination within six months of 
 the filing of an administrative appeal, the taxpayer may elect 
 to appeal to tax court. 

    Subd. 9.    Inapplicability of Administrative Procedure 
 Act.  An appeal under this section is not a contested case 
 governed by chapter 14. 

    HIST: 1997 c 179 art 1 s 21; 1998 c 300 art 3 s 13,14 

     297G.22 Judicial review. 

    In lieu of an administrative appeal under this chapter, a 
 person aggrieved by an order of the commissioner fixing a tax, 
 penalty, or interest under this chapter may, within 60 days from 
 the date of the notice of the order, appeal to the tax court in 
 the manner provided under section 271.06.  

    HIST: 1997 c 179 art 1 s 22