HF 4147

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; increasing the cigarette and tobacco products taxes; repealing
the health impact fund and fee; transferring money; amending Minnesota Statutes
2004, section 297F.05, subdivisions 1, 3; Minnesota Statutes 2005 Supplement,
section 325D.32, subdivision 9; Laws 2005, First Special Session chapter 4,
article 4, section 5; repealing Minnesota Statutes 2005 Supplement, sections
16A.725; 256.9658.

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

Section 1.

Minnesota Statutes 2004, 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 24 deleted text end new text begin 61.5 new text end mills
on each such cigarette; and

(2) on cigarettes weighing more than three pounds per thousand, deleted text begin 48 deleted text end new text begin 123 new text end mills on
each such cigarette.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2005, but the tax increase
imposed by this section is a replacement for the fee enacted in Laws 2005, First Special
Session chapter 4, article 4, section 2, and any amounts paid under the fee are credited
against the liability for the tax under this section. The credit does not apply to any
amount of the fee refunded or returned, whether to the manufacturer, distributor, retailer,
consumer, or anyone else.
new text end

Sec. 2.

Minnesota Statutes 2004, 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 35 deleted text end new text begin 70
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 August 1, 2005, but the tax increase
imposed by this section is a replacement for the fee enacted in Laws 2005, First Special
Session chapter 4, article 4, section 2, and any amounts paid under the fee are credited
against the liability for the tax under this section. The credit does not apply to any
amount of the fee refunded or returned, whether to the manufacturer, distributor, retailer,
consumer, or anyone else.
new text end

Sec. 3.

Minnesota Statutes 2005 Supplement, section 325D.32, subdivision 9, is
amended to read:

Subd. 9.

Basic cost of cigarettes.

"Basic cost of cigarettes" means the gross invoice
cost of cigarettes to the wholesaler or retailer plus the full face value of any stamps
which may be required by any cigarette tax deleted text begin or fee deleted text end act of this state, unless included by
the manufacturer in the list price.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from August 1, 2005,
and is intended to reflect the replacement of the fee under Laws 2005, First Special Session
chapter 4, article 4, section 2, with the taxes imposed by sections 1 and 2.
new text end

Sec. 4.

Laws 2005, First Special Session chapter 4, article 4, section 5, is amended to
read:

Sec. 5. FLOOR STOCKS deleted text begin FEE deleted text end new text begin TAX new text end .

Subdivision 1.

Cigarettes.

A floor stocks cigarette deleted text begin fee deleted text end new text begin tax new text end is imposed on every
person engaged in the 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
August 1, 2005. The deleted text begin fee deleted text end new text begin tax new text end is imposed at the following rates:

(1) on cigarettes weighing not more than three pounds per thousand, 37.5 mills on
each cigarette; and

(2) on cigarettes weighing more than three pounds per thousand, 75 mills on each
cigarette.

Each distributor, on or before August 10, 2005, shall file a return with the
commissioner of revenue, in the form the commissioner prescribes, showing the stamped
cigarettes and un new text begin 3 new text end affixed stamps on hand at 12:01 a.m. on August 1, 2005, and the amount
of deleted text begin fee deleted text end new text begin tax new text end due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor,
manufacturer, or manufacturer's representative, on or before August 10, 2005, shall file
a return with the commissioner of revenue, in the form the commissioner prescribes,
showing the cigarettes on hand at 12:01 a.m. on August 1, 2005, and the amount of deleted text begin fee deleted text end new text begin tax
new text end due on the cigarettes. The deleted text begin fee deleted text end new text begin tax new text end imposed by this section is due and payable on or before
September 7, 2005, and after that date bears interest at the rate of one percent per month.

Subd. 2.

Audit and enforcement.

The deleted text begin fee deleted text end new text begin tax new text end imposed by this section is subject to
the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and
collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner
of revenue may require a distributor to receive and maintain copies of floor stocks deleted text begin fee deleted text end new text begin tax
new text end returns filed by all persons requesting a credit for returned cigarettes.

Subd. 3.

Deposit of proceeds.

The commissioner of revenue shall deposit the
revenues from the deleted text begin fee deleted text end new text begin tax new text end under this section in the state treasury and credit them to the
deleted text begin health impact deleted text end new text begin general new text end fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from August 1, 2005,
but the tax in this section is a replacement for and not in addition to the fee enacted in
Laws 2005, First Special Session chapter 4, article 4, section 5.
new text end

Sec. 5. new text begin HEALTH IMPACT FUND TRANSFER.
new text end

new text begin The commissioner of finance shall transfer any amounts in the health impact fund
to the general fund on the day following final enactment.
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

Sec. 6. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2005 Supplement, sections 16A.725; and 256.9658, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive to August 1, 2005, and
the repealed fee is replaced by the taxes under sections 1 and 2; any amounts paid under
the fee are credited against the liability for the taxes.
new text end