HF 792

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; increasing the taxes imposed on 
  1.3             sales of cigarettes and tobacco products; dedicating 
  1.4             the revenue from the increase to tobacco and drug use 
  1.5             prevention programs in the schools; amending Minnesota 
  1.6             Statutes 1996, sections 297.02, subdivision 1; 297.03, 
  1.7             subdivision 5; 297.13, subdivision 1; 297.32, 
  1.8             subdivisions 1, 2, and 9; and 297.35, subdivision 1; 
  1.9             proposing coding for new law in Minnesota Statutes, 
  1.10            chapter 126. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  [126.055] [TOBACCO AND DRUG USE PREVENTION 
  1.13  PROGRAMS; ACCOUNT.] 
  1.14     Money in the tobacco and drug use prevention account in the 
  1.15  general fund consists of the proceeds credited to it under 
  1.16  sections 297.13, subdivision 1, paragraph (b), clause (2), and 
  1.17  297.32, subdivision 9, clause (1).  Funds in the account must be 
  1.18  appropriated by law to the commissioner of children, families, 
  1.19  and learning for tobacco and drug use prevention programs, 
  1.20  including services provided to the school or by direct grants by 
  1.21  the commissioner to the schools. 
  1.22     Sec. 2.  Minnesota Statutes 1996, section 297.02, 
  1.23  subdivision 1, is amended to read: 
  1.24     Subdivision 1.  [RATES.] A tax is hereby imposed upon the 
  1.25  sale of cigarettes in this state or having cigarettes in 
  1.26  possession in this state with intent to sell and upon any person 
  1.27  engaged in business as a distributor thereof, at the following 
  1.28  rates, subject to the discount provided in section 297.03: 
  2.1      (1) On cigarettes weighing not more than three pounds per 
  2.2   thousand, 24 29 mills on each such cigarette; 
  2.3      (2) On cigarettes weighing more than three pounds per 
  2.4   thousand, 48 58 mills on each such cigarette. 
  2.5      Sec. 3.  Minnesota Statutes 1996, section 297.03, 
  2.6   subdivision 5, is amended to read: 
  2.7      Subd. 5.  [SALE OF STAMPS.] The commissioner shall sell 
  2.8   stamps to any person licensed as a distributor at a discount of 
  2.9   1.0 .8 percent from the face amount of the stamps for the first 
  2.10  $1,500,000 of such stamps purchased in any fiscal year; and at a 
  2.11  discount of .60 .5 percent on the remainder of such stamps 
  2.12  purchased in any fiscal year.  The commissioner shall not sell 
  2.13  stamps to any other person.  The commissioner may prescribe the 
  2.14  method of shipment of the stamps to the distributor as well as 
  2.15  the quantities of stamps purchased.  
  2.16     Sec. 4.  Minnesota Statutes 1996, section 297.13, 
  2.17  subdivision 1, is amended to read: 
  2.18     Subdivision 1.  [CIGARETTE TAX APPORTIONMENT.] Revenues 
  2.19  received from taxes, penalties, and interest under sections 
  2.20  297.01 to 297.13 and from license fees and miscellaneous sources 
  2.21  of revenue shall be deposited by the commissioner of revenue in 
  2.22  the state treasury and credited as follows:  
  2.23     (a) first to the general obligation special tax bond debt 
  2.24  service account in each fiscal year the amount required to 
  2.25  increase the balance on hand in the account on each December 1 
  2.26  to an amount equal to the full amount of principal and interest 
  2.27  to come due on all outstanding bonds whose debt service is 
  2.28  payable primarily from the proceeds of the tax to and including 
  2.29  the second following July 1; and 
  2.30     (b) after the requirements of paragraph (a) have been met: 
  2.31     (1) the revenue produced by one mill of the tax on 
  2.32  cigarettes weighing not more than three pounds a thousand and 
  2.33  two mills of the tax on cigarettes weighing more than three 
  2.34  pounds a thousand must be credited to the Minnesota future 
  2.35  resources fund; 
  2.36     (2) the revenue produced by five mills of the tax on 
  3.1   cigarettes weighing not more than three pounds a thousand and 
  3.2   ten mills of the tax on cigarettes weighing more than three 
  3.3   pounds a thousand must be credited to the tobacco and drug use 
  3.4   prevention account under section 126.055; and 
  3.5      (3) the balance of the revenues derived from taxes, 
  3.6   penalties, and interest under sections 297.01 to 297.13 and from 
  3.7   license fees and miscellaneous sources of revenue shall be 
  3.8   credited to the general fund. 
  3.9      Sec. 5.  Minnesota Statutes 1996, section 297.32, 
  3.10  subdivision 1, is amended to read: 
  3.11     Subdivision 1.  A tax is hereby imposed upon all tobacco 
  3.12  products in this state and upon any person engaged in business 
  3.13  as a distributor thereof, at the rate of 35 42 percent of the 
  3.14  wholesale sales price of such tobacco products.  Such tax shall 
  3.15  be imposed at the time the distributor (1) brings, or causes to 
  3.16  be brought, into this state from without the state tobacco 
  3.17  products for sale; (2) makes, manufactures, or fabricates 
  3.18  tobacco products in this state for sale in this state; or (3) 
  3.19  ships or transports tobacco products to retailers in this state, 
  3.20  to be sold by those retailers.  
  3.21     Sec. 6.  Minnesota Statutes 1996, section 297.32, 
  3.22  subdivision 2, is amended to read: 
  3.23     Subd. 2.  A tax is hereby imposed upon the use or storage 
  3.24  by consumers of tobacco products in this state, and upon such 
  3.25  consumers, at the rate of 35 42 percent of the cost of such 
  3.26  tobacco products.  
  3.27     The tax imposed by this subdivision shall not apply if the 
  3.28  tax imposed by subdivision 1 on such tobacco products has been 
  3.29  paid.  
  3.30     This tax shall not apply to the use or storage of tobacco 
  3.31  products in quantities of: 
  3.32     1.  not more than 50 cigars; 
  3.33     2.  not more than ten oz. snuff or snuff powder; 
  3.34     3.  not more than one lb. smoking or chewing tobacco or 
  3.35  other tobacco products not specifically mentioned herein, in the 
  3.36  possession of any one consumer.  
  4.1      Sec. 7.  Minnesota Statutes 1996, section 297.32, 
  4.2   subdivision 9, is amended to read: 
  4.3      Subd. 9.  Revenue derived from the taxes imposed by this 
  4.4   section must be deposited by the commissioner in the state 
  4.5   treasury and credited as follows: 
  4.6      (1) the revenue produced by a tax of seven percent of the 
  4.7   wholesale sales price of the tobacco products under subdivision 
  4.8   1, or of the cost of the tobacco products under subdivision 2, 
  4.9   must be credited to the tobacco and drug use prevention account 
  4.10  under section 126.055; and 
  4.11     (2) the balance of the revenue shall be credited to the 
  4.12  general fund. 
  4.13     Sec. 8.  Minnesota Statutes 1996, section 297.35, 
  4.14  subdivision 1, is amended to read: 
  4.15     Subdivision 1.  On or before the 18th day of each calendar 
  4.16  month every distributor with a place of business in this state 
  4.17  shall file a return with the commissioner showing the quantity 
  4.18  and wholesale sales price of each tobacco product (1) brought, 
  4.19  or caused to be brought, into this state for sale; and (2) made, 
  4.20  manufactured, or fabricated in this state for sale in this 
  4.21  state, during the preceding calendar month.  Every licensed 
  4.22  distributor outside this state shall in like manner file a 
  4.23  return showing the quantity and wholesale sales price of each 
  4.24  tobacco product shipped or transported to retailers in this 
  4.25  state to be sold by those retailers, during the preceding 
  4.26  calendar month.  Returns shall be made upon forms furnished and 
  4.27  prescribed by the commissioner and shall contain such other 
  4.28  information as the commissioner may require.  Each return shall 
  4.29  be accompanied by a remittance for the full tax liability shown 
  4.30  therein, less 1.5 1.2 percent of such liability as compensation 
  4.31  to reimburse the distributor for expenses incurred in the 
  4.32  administration of sections 297.31 to 297.39.  The return for the 
  4.33  May liability and 75 percent of the estimated June liability is 
  4.34  due on the date payment of the tax is due. 
  4.35     A distributor having a liability of $120,000 or more during 
  4.36  a fiscal year ending June 30 must remit all liabilities in the 
  5.1   subsequent calendar year by means of a funds transfer as defined 
  5.2   in section 336.4A-104, paragraph (a).  The funds transfer 
  5.3   payment date, as defined in section 336.4A-401, must be on or 
  5.4   before the date the tax is due.  If the date the tax is due is 
  5.5   not a funds transfer business day, as defined in section 
  5.6   336.4A-105, paragraph (a), clause (4), the payment date must be 
  5.7   on or before the funds transfer business day next following the 
  5.8   date the tax is due. 
  5.9      Sec. 9.  [FLOOR STOCKS TAXES.] 
  5.10     Subdivision 1.  [CIGARETTES.] A floor stocks tax is imposed 
  5.11  on every person engaged in business in this state as a 
  5.12  distributor, retailer, subjobber, vendor, manufacturer, or 
  5.13  manufacturer's representative of cigarettes, on the stamped 
  5.14  cigarettes in the person's possession or under the person's 
  5.15  control at 12:01 a.m. on July 1, 1997.  The tax is imposed at 
  5.16  the following rates, subject to the discounts in section 297.03: 
  5.17     (1) on cigarettes weighing not more than three pounds a 
  5.18  thousand, 5 mills on each cigarette; and 
  5.19     (2) on cigarettes weighing more than three pounds a 
  5.20  thousand, 10 mills on each cigarette. 
  5.21     Each distributor, by July 8, 1997, shall file a report with 
  5.22  the commissioner, in the form the commissioner prescribes, 
  5.23  showing the cigarettes on hand at 12:01 a.m. on July 1, 1997, 
  5.24  and the amount of tax due on the cigarettes.  The tax imposed by 
  5.25  this section is due and payable by August 1, 1997, and after 
  5.26  that date bears interest at the rate of one percent a month. 
  5.27     Each retailer, subjobber, vendor, manufacturer, or 
  5.28  manufacturer's representative shall file a return with the 
  5.29  commissioner, in the form the commissioner prescribes, showing 
  5.30  the cigarettes on hand at 12:01 a.m. on July 1, 1997, and pay 
  5.31  the tax due on them by August 1, 1997.  Tax not paid by the due 
  5.32  date bears interest at the rate of one percent a month. 
  5.33     Subd. 2.  [TOBACCO PRODUCTS.] A floor stocks tax is imposed 
  5.34  upon every person engaged in business in this state as a 
  5.35  distributor of tobacco products, at the rate of seven percent of 
  5.36  the wholesale sales price of each tobacco product in the 
  6.1   person's possession or under the person's control at 12:01 a.m. 
  6.2   on July 1, 1997.  Each distributor, by July 8, 1997, shall file 
  6.3   a report with the commissioner, in the form the commissioner 
  6.4   prescribes, showing the tobacco products on hand at 12:01 a.m. 
  6.5   on July 1, 1997, and the amount of tax due on them.  The tax 
  6.6   imposed by this section less the discount provided in Minnesota 
  6.7   Statutes, section 297.35, subdivision 1, is due and payable by 
  6.8   August 1, 1997, and thereafter bears interest at the rate of one 
  6.9   percent a month. 
  6.10     Subd. 3.  [AUDIT AND ENFORCEMENT.] The taxes imposed by 
  6.11  this section are subject to the audit, assessment, and 
  6.12  collection provisions applicable to the taxes imposed under 
  6.13  chapter 297C.  The commissioner may require a distributor to 
  6.14  receive and maintain copies of floor stock tax returns filed by 
  6.15  all persons requesting a credit for returned cigarettes or 
  6.16  tobacco products.  
  6.17     Subd. 4.  [DEPOSIT OF PROCEEDS.] The revenue from the taxes 
  6.18  imposed under this section must be deposited by the commissioner 
  6.19  in the state treasury and credited to the tobacco and drug use 
  6.20  prevention account under Minnesota Statutes, section 126.055.  
  6.21     Sec. 10.  [EFFECTIVE DATE.] 
  6.22     Sections 1 to 9 are effective July 1, 1997.