Minnesota Legislature
HF 2761
as introduced - 87th Legislature (2011 - 2012) Posted on 03/12/2012 01:50pm
Current Version - as introduced
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A bill for an act
relating to state finance; increasing the rate of taxes on cigarettes and other
tobacco products; providing for use of the proceeds; amending Minnesota
Statutes 2010, sections 275.025, subdivision 1; 297F.05, subdivisions 1, 3, 4;
Minnesota Statutes 2011 Supplement, section 127A.45, subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2011 Supplement, section 127A.45, subdivision 2,
is amended to read:
Subd. 2.
Definitions.
(a) "Other district receipts" means payments by county
treasurers pursuant to section 276.10, apportionments from the school endowment fund
pursuant to section 127A.33, apportionments by the county auditor pursuant to section
127A.34, subdivision 2, and payments to school districts by the commissioner of revenue
pursuant to chapter 298.
(b) "Cumulative amount guaranteed" means the product of
(1) the cumulative disbursement percentage shown in subdivision 3; times
(2) the sum of
(i) the current year aid payment percentage of the estimated aid and credit
entitlements paid according to subdivision 13; plus
(ii) 100 percent of the entitlements paid according to subdivisions 11 and 12; plus
(iii) the other district receipts.
(c) "Payment date" means the date on which state payments to districts are made
by the electronic funds transfer method. If a payment date falls on a Saturday, a Sunday,
or a weekday which is a legal holiday, the payment shall be made on the immediately
preceding business day. The commissioner may make payments on dates other than
those listed in subdivision 3, but only for portions of payments from any preceding
payment dates which could not be processed by the electronic funds transfer method due
to documented extenuating circumstances.
(d) The current year aid payment percentage equals 73 in fiscal year 2010 and 70 in
fiscal year 2011, and 60 in fiscal years 2012 and later.new text begin The commissioner shall increase the
current year aid payment percentage under this section for any year that the current year
aid payment percentage under this subdivision and under section 16A.152, subdivision 2,
is less than 70. The amount of the increase is the percentage generated by the value in
paragraph (e).
new text end
new text begin
(e) The value to produce the percentage increase in paragraph (d) is equivalent to the
cigarette and tobacco tax collections generated by:
new text end
new text begin
(1) increasing the cigarette tax rate under section 297F.05, subdivision 1, from 24 to
88.5 mills on cigarettes weighing not more than three pounds per thousand;
new text end
new text begin
(2) increasing the cigarette tax rate under section 297F.05, subdivision 1, from 48 to
177 mills on cigarettes weighing more than three pounds per thousand; and
new text end
new text begin
(3) increasing the tax rate on tobacco products under section 297F.05, subdivision 3,
from 35 to 47.5 percent of the wholesale price of the tobacco products.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2012.
new text end
Sec. 2.
Minnesota Statutes 2010, section 275.025, subdivision 1, is amended to read:
Subdivision 1.
Levy amount.
The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy base amount is $592,000,000 for taxes payable in
2002. For taxes payable in subsequent years, the levy base amount is increased each year
by multiplying the levy base amount for the prior year by the sum of one plus the rate of
increase, if any, in the implicit price deflator for government consumption expenditures
and gross investment for state and local governments prepared by the Bureau of Economic
Analysts of the United States Department of Commerce for the 12-month period ending
March 31 of the year prior to the year the taxes are payable. new text begin The commissioner shall
reduce the state general levy base amount under this section for any year that the current
year aid percentage for the current fiscal year, under sections 16A.152, subdivision 2, and
127A.45, subdivision 2, is equal to or greater than 70. The amount of the levy reduction is
equal to the increase in cigarette and tobacco tax collections generated by:
new text end
new text begin
(1) increasing the cigarette tax rate under section 297F.05, subdivision 1, from 24 to
88.5 mills on cigarettes weighing not more than three pounds per thousand;
new text end
new text begin
(2) increasing the tax rate under section 297F.05, subdivision 1, from 48 to 177 mills
on cigarettes weighing more than three pounds per thousand; and
new text end
new text begin
(3) increasing the tax rate on tobacco products under section 297F.05, subdivision 3,
from 35 to 47.5 percent of the wholesale price of the tobacco products.
new text end
The tax under this section is not treated as a local tax rate under section 469.177 and
is not the levy of a governmental unit under chapters 276A and 473F.
The commissioner shall increase or decrease the preliminary or final rate for a year
as necessary to account for errors and tax base changes that affected a preliminary or final
rate for either of the two preceding years. Adjustments are allowed to the extent that the
necessary information is available to the commissioner at the time the rates for a year must
be certified, and for the following reasons:
(1) an erroneous report of taxable value by a local official;
(2) an erroneous calculation by the commissioner; and
(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under
section 275.29 that was not reported on the abstracts of assessment submitted under
section 270C.89 for the same year.
The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2012.
new text end
Sec. 3.
Minnesota Statutes 2010, section 297F.05, subdivision 1, is amended to read:
Subdivision 1.
Rates; cigarettes.
A tax is imposed upon the sale of cigarettes in
this state, upon having cigarettes in possession in this state with intent to sell, upon any
person engaged in business as a distributor, and upon the use or storage by consumers, at
the following rates:
(1) on cigarettes weighing not more than three pounds per thousand, deleted text begin 24deleted text end new text begin 88.5 new text end mills
on each such cigarette; and
(2) on cigarettes weighing more than three pounds per thousand, deleted text begin 48deleted text end new text begin 177 new text end mills on
each such cigarette.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2012.
new text end
Sec. 4.
Minnesota Statutes 2010, section 297F.05, subdivision 3, is amended to read:
Subd. 3.
Rates; tobacco products.
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 deleted text begin 35deleted text end
new text begin 47.5 new text end 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.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2012.
new text end
Sec. 5.
Minnesota Statutes 2010, section 297F.05, subdivision 4, is amended to read:
Subd. 4.
Use tax; tobacco products.
A tax is imposed upon the use or storage by
consumers of tobacco products in this state, and upon such consumers, at the rate of deleted text begin 35deleted text end
new text begin 47.5 new text end percent of the cost to the consumer of the tobacco products.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2012.
new text end
Sec. 6. new text begin FLOOR STOCKS TAXES.
new text end
new text begin Subdivision 1. new text end
new text begin Cigarettes. new text end
new text begin
(a) A floor stocks tax is imposed on every person
engaged in business in this state as a distributor, retailer, subjobber, vendor, manufacturer,
or manufacturer's representative of cigarettes, on the stamped cigarettes and unaffixed
stamps in the person's possession or under the person's control at 12:01 a.m. on July 1,
2012. The tax is imposed at the following rates:
new text end
new text begin
(1) on cigarettes weighing not more than three pounds per thousand, 64.5 mills on
each cigarette; and
new text end
new text begin
(2) on cigarettes weighing more than three pounds per thousand, 129 mills on each
cigarette.
new text end
new text begin
(b) Each distributor, on or before July 8, 2012, shall file a return with the
commissioner of revenue, in the form the commissioner prescribes, showing the stamped
cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2012, and the amount
of tax due on the cigarettes and unaffixed stamps. The tax imposed by this section is
due and payable by August 1, 2012, and after that date bears interest at the rate of one
percent per month.
new text end
new text begin
(c) Each retailer, subjobber, vendor, manufacturer, or manufacturer's representative,
on or before July 8, 2012, shall file a return with the commissioner in the form the
commissioner prescribes, showing the cigarettes on hand at 12:01 a.m. on July 1, 2012,
and the amount of tax due on the cigarettes. The tax imposed by this section is due and
payable by August 1, 2012, and after that date bears interest at the rate of one percent
per month.
new text end
new text begin Subd. 2. new text end
new text begin Tobacco products. new text end
new text begin
(a) A floor stocks tax is imposed on every person
engaged in business in this state as a distributor, retailer, subjobber, vendor, manufacturer,
or manufacturer's representative of tobacco products, on the tobacco products in the
person's possession or under the person's control at 12:01 a.m. on July 1, 2012. The tax is
imposed at the rate of 12.5 percent of the wholesale sales price of the tobacco products.
new text end
new text begin
(b) On or before July 8, 2012, each distributor, retailer, subjobber, vendor,
manufacturer, or manufacturer's representative shall file a return with the commissioner of
revenue, in the form the commissioner prescribes, showing the tobacco products on hand
at 12:01 a.m. on July 1, 2012, and the amount of tax due on the tobacco products. The tax
imposed by this section is due and payable by August 1, 2012, and after that date bears
interest at the rate of one percent per month.
new text end
new text begin Subd. 3. new text end
new text begin Audit and enforcement. new text end
new text begin
The taxes imposed by this section are subject
to the audit, assessment, and collection provisions applicable to the taxes imposed under
Minnesota Statutes, chapter 297F. The commissioner may require a distributor to receive
and maintain copies of floor stock tax returns filed by all persons requesting a credit for
returned cigarettes.
new text end
new text begin Subd. 4. new text end
new text begin Deposit of proceeds. new text end
new text begin
The revenue from the taxes imposed under this
section must be deposited by the commissioner in the state treasury and credited as
provided in Minnesota Statutes, section 297F.10.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end