HF 4325

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/26/2024 02:20pm

A bill for an act
relating to taxation; modifying the cannabis gross receipts tax and local government
cannabis aid; reducing the cannabis gross receipts tax rate; reallocating local
government cannabis aid to general purpose local government aid; authorizing
local sales and use taxes on cannabis sales; repealing local government cannabis
aid; amending Minnesota Statutes 2023 Supplement, sections 295.81, subdivisions
2, 10; 295.82; repealing Minnesota Statutes 2023 Supplement, section 477A.32.

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

Section 1.

Minnesota Statutes 2023 Supplement, section 295.81, subdivision 2, is amended
to read:

Subd. 2.

Gross receipts tax imposed.

(a) A tax equal to deleted text begin ten deleted text end new text begin eight new text end percent of gross
receipts from retail sales in Minnesota of taxable cannabis products is imposed on any
taxable cannabis product retailer that sells these products to customers. A taxable cannabis
product retailer may but is not required to collect the tax imposed by this section from the
purchaser as long as the tax is separately stated on the receipt, invoice, bill of sale, or similar
document given to the purchaser.

(b) If a product subject to the tax imposed under this section is included in a bundled
transaction, the entire sales price of the bundled transaction is subject to the tax imposed
under this section.

(c) The tax imposed under this section is in addition to any other tax imposed on the
sale or use of taxable cannabis products.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for gross receipts received after July 1,
2024.
new text end

Sec. 2.

Minnesota Statutes 2023 Supplement, section 295.81, subdivision 10, is amended
to read:

Subd. 10.

Deposit of revenues; account established.

(a) new text begin For taxes remitted between
July 1, 2023, and June 30, 2025, new text end the commissioner must deposit the revenues, including
penalties and interest, derived from the tax imposed by this section as follows:

(1) 80 percent to the general fund; and

(2) 20 percent to the local government cannabis aid account in the special revenue fund.

(b) new text begin For taxes remitted on July 1, 2025, and thereafter, the commissioner must deposit
the revenues, including penalties and interest, derived from the tax imposed by this section
into the general fund.
new text end

new text begin (c) new text end The local government cannabis aid account is established in the special revenue fund. new text begin
The account expires on July 15, 2025.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes paid after June 30, 2024.
new text end

Sec. 3.

Minnesota Statutes 2023 Supplement, section 295.82, is amended to read:

295.82 CANNABIS LOCAL TAX deleted text begin PROHIBITED deleted text end new text begin AUTHORIZED new text end .

new text begin (a) new text end A deleted text begin political subdivision of this state is prohibited from imposing deleted text end new text begin statutory or home
rule charter city that has one or more cannabis businesses licensed under chapter 342 may,
by ordinance, impose new text end a new text begin local sales and use new text end tax deleted text begin solely deleted text end new text begin of up to two percent new text end on the sale of
taxable cannabis products as defined under section 295.81, subdivision 1, paragraph (r). new text begin
The tax applies to sales taxable under section 295.81 that occur within the political
subdivision.
new text end

new text begin (b) The tax may be imposed only if the amount to be received by the city is necessary
to cover the costs incurred by the city to regulate the sale of cannabis. A city may not use
money collected under this section for any purpose other than to regulate cannabis sales. A
city may use money collected under this section for reimbursement to another city or county
for enforcement necessary to regulate cannabis sales. The commissioner may require a city
that imposes a tax under this section to file a report in a form prescribed by the commissioner
showing the use of the proceeds of the tax.
new text end

new text begin (c) The provisions of section 297A.99, subdivisions 6 to 12a, govern the administration,
collection, and enforcement of a tax imposed under this section.
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. 4. new text begin TEMPORARY INCREASE TO LOCAL GOVERNMENT AID; CANNABIS
GROSS RECEIPTS TAX REVENUES.
new text end

new text begin (a) By July 15, 2025, the commissioner of management and budget must certify to the
commissioner of revenue the balance of the local government cannabis aid account in the
special revenue fund. The commissioner must include the amount certified in the total
amount of aid available to cities and counties under Minnesota Statutes, section 477A.03,
for aids payable in 2026 only. For aid to cities, 50 percent of the amount certified under this
paragraph must be added to the appropriation under Minnesota Statutes, section 477A.03,
subdivision 2a. For aid to counties, 22 percent of the amount certified under this paragraph
must be added to the appropriation under Minnesota Statutes, section 477A.03, subdivision
2b, paragraph (a), and 28 percent of the amount certified under this paragraph must be added
to the appropriation under Minnesota Statutes, section 477A.03, subdivision 2b, paragraph
(b).
new text end

new text begin (b) By July 15, 2025, the commissioner of management and budget must transfer the
amount certified under paragraph (a) to the general fund for aid to cities and counties under
Minnesota Statutes, section 477A.03, for aids payable in 2026 only.
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. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2023 Supplement, section 477A.32, new text end new text begin is repealed.
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

APPENDIX

Repealed Minnesota Statutes: 24-07014

477A.32 LOCAL GOVERNMENT CANNABIS AID.

Subdivision 1.

Definitions.

For purposes of this section, the following terms have the meanings given:

(1) "city" means a statutory or home rule charter city; and

(2) "director" means the director of the Office of Cannabis Management under section 342.02.

Subd. 2.

Certification to commissioner of revenue.

(a) By July 15, 2024, and annually thereafter, the commissioner of management and budget must certify to the commissioner of revenue the balance of the local government cannabis aid account in the special revenue fund as of the immediately preceding June 30.

(b) By June 1, 2024, and annually thereafter, the director must certify to the commissioner of revenue the number of cannabis businesses, as defined under section 342.01, subdivision 14, licensed under chapter 342 as of the previous January 1, disaggregated by county and city.

Subd. 3.

Aid to counties.

(a) Beginning for aid payable in 2024, the amount available for aid to counties under this subdivision equals 50 percent of the amount certified in that year to the commissioner under subdivision 2, paragraph (a).

(b) Twenty percent of the amount under paragraph (a) must be distributed equally among all counties.

(c) Eighty percent of the amount under paragraph (a) must be distributed proportionally to each county according to the number of cannabis businesses located in the county as compared to the number of cannabis businesses in all counties as of the most recent certification under subdivision 2, paragraph (b).

Subd. 4.

Aid to cities.

(a) Beginning for aid payable in 2024, the amount available for aid to cities under this subdivision equals 50 percent of the amount certified in that year to the commissioner under subdivision 2, paragraph (a).

(b) The amount under paragraph (a) must be distributed proportionally to each city according to the number of cannabis businesses located in the city as compared to the number of cannabis businesses in all cities as of the most recent certification under subdivision 2, paragraph (b).

Subd. 5.

Payment.

The commissioner of revenue must compute the amount of aid payable to each county and city under this section. On or before September 1 of each year, the commissioner must certify the amount to be paid to each county and city in that year. The commissioner must pay the full amount of the aid on December 26 annually.

Subd. 6.

Appropriation.

Beginning in fiscal year 2025 and annually thereafter, the amount in the local government cannabis aid account in the special revenue fund is annually appropriated to the commissioner of revenue to make the aid payments required under this section.