1.1 A bill for an act
1.2 relating to taxation; recodifying taxes on liquor;
1.3 providing civil and criminal penalties; appropriating
1.4 money; amending Minnesota Statutes 1996, sections
1.5 16A.26; 340A.301, subdivision 8; 340A.302, subdivision
1.6 1; 340A.414, subdivision 7; 340A.417; and 340A.7035;
1.7 proposing coding for new law as Minnesota Statutes,
1.8 chapter 297G; repealing Minnesota Statutes 1996,
1.9 sections 297C.01; 297C.02; 297C.03; 297C.04; 297C.045;
1.10 297C.05; 297C.06; 297C.07; 297C.08; 297C.09; 297C.10;
1.11 297C.11; 297C.12; 297C.13; 297C.14; 297C.16; and
1.12 297C.17.
1.13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 ARTICLE 1
1.15 RECODIFICATION
1.16 Section 1. [297G.01] [DEFINITIONS.]
1.17 Subdivision 1. [TERMS.] For purposes of this chapter, the
1.18 following terms have the meaning given them unless the language
1.19 or context clearly indicates that a different meaning is
1.20 intended.
1.21 Subd. 2. [ALCOHOLIC BEVERAGE.] "Alcoholic beverage" is any
1.22 beverage containing more than one-half of one percent alcohol by
1.23 volume.
1.24 Subd. 3. [BREWER.] "Brewer" is a person who manufactures
1.25 malt liquor for sale.
1.26 Subd. 4. [COLLECTOR.] "Collector" is a person who collects
1.27 commemorative bottles for their use and enjoyment as collector's
1.28 items and not for the consumption of the beverage contained in
1.29 them. The term does not include licensed wholesalers or
2.1 retailers of alcoholic beverages.
2.2 Subd. 5. [COMMEMORATIVE BOTTLES.] "Commemorative bottles"
2.3 are ceramic commemorative bottles or other specially designed
2.4 decanters which have value as collector's items and which
2.5 contain an alcoholic beverage.
2.6 Subd. 6. [COMMISSIONER.] "Commissioner" is the
2.7 commissioner of revenue.
2.8 Subd. 7. [DISTILLED SPIRITS.] "Distilled spirits" is
2.9 intoxicating liquors, including ethyl alcohol, hydrated oxide of
2.10 ethyl, spirits of wine, whiskey, rum, brandy, gin, and other
2.11 distilled spirits, including all dilutions and mixtures, for
2.12 nonindustrial use.
2.13 Subd. 8. [FERMENTED MALT BEVERAGES.] "Fermented malt
2.14 beverages" is any beer, ale, or other beverage made from malt by
2.15 fermentation and containing not less than one-half of one
2.16 percent alcohol by volume.
2.17 Subd. 9. [INTERNAL REVENUE CODE.] Unless specifically
2.18 defined otherwise, "Internal Revenue Code" means the Internal
2.19 Revenue Code of 1986, as amended through December 31, 1996.
2.20 Subd. 10. [INTOXICATING LIQUOR.] "Intoxicating liquor" is
2.21 ethyl alcohol, distilled spirits, fermented, spirituous, vinous,
2.22 and fermented malt beverages containing more than 3.2 percent of
2.23 alcohol by weight.
2.24 Subd. 11. [LIQUEUR-FILLED CANDY.] "Liqueur-filled candy"
2.25 is any confectionery containing more than one-half of one
2.26 percent alcohol by volume in liquid form that is intended for or
2.27 capable of beverage use.
2.28 Subd. 12. [LIQUOR ACT.] For purposes of this chapter, the
2.29 terms defined in section 340A.101, have the meanings given them
2.30 in that section except as provided in this section.
2.31 Subd. 13. [MANUFACTURER.] "Manufacturer" is a person who,
2.32 by a process of manufacturing, fermenting, brewing, distilling,
2.33 refining, rectifying, blending, or by the combination of
2.34 different materials, prepares or produces intoxicating liquor
2.35 for sale.
2.36 Subd. 14. [MINIATURES.] "Miniatures" are containers of
3.1 distilled spirits of two fluid ounces or less or 50 milliliters
3.2 or less.
3.3 Subd. 15. [PERSON.] "Person" means an individual or any
3.4 entity engaged in the sale of distilled spirits, wine, or
3.5 fermented malt beverages.
3.6 Subd. 16. [RETAILER.] "Retailer" means a person engaged in
3.7 this state in the business of selling, or offering to sell,
3.8 distilled spirits, wine, or fermented malt beverages.
3.9 Subd. 17. [TABLE OR SPARKLING WINE.] "Table or sparkling
3.10 wine" is a beverage made without rectification or fortification
3.11 and containing not more than 25 percent alcohol by volume and
3.12 made by the fermentation of grapes, grape juice, other fruits,
3.13 or honey.
3.14 Subd. 18. [3.2 PERCENT MALT LIQUOR.] "3.2 percent malt
3.15 liquor" is a fermented malt beverage containing not less than
3.16 one-half of one percent alcohol by volume nor more than 3.2
3.17 percent alcohol by weight.
3.18 Subd. 19. [WHOLESALER.] "Wholesaler" is a person who sells
3.19 alcoholic beverages to persons to whom sale is permitted under
3.20 section 340A.310, from a stock maintained in a warehouse in the
3.21 state.
3.22 Subd. 20. [WINE.] "Wine" is the product made from the
3.23 normal alcoholic fermentation of grapes, including still wine,
3.24 sparkling and carbonated wine, wine made from condensed grape
3.25 must, wine made from other agricultural products than sound ripe
3.26 grapes, imitation wine, compounds sold as wine, vermouth, cider,
3.27 perry, and sake, in each instance containing not less than
3.28 one-half of one percent nor more than 24 percent alcohol by
3.29 volume for nonindustrial use. Wine does not include distilled
3.30 spirits as defined in subdivision 7.
3.31 Sec. 2. [297G.02] [ADMINISTRATION.]
3.32 Subdivision 1. [ENFORCEMENT RESPONSIBILITY.] The
3.33 commissioners of public safety and revenue shall enforce and
3.34 administer the provisions of this chapter.
3.35 Subd. 2. [NONAPPLICABILITY.] This chapter does not apply
3.36 to:
4.1 (1) medicines intended for therapeutic purposes and not
4.2 intended as a beverage;
4.3 (2) industrial alcohol designed for mechanical, chemical,
4.4 scientific, pharmaceutical, or industrial purposes; or
4.5 (3) nonpotable compounds or preparations containing alcohol.
4.6 Subd. 3. [POWERS OF COMMISSIONER OF REVENUE.] The
4.7 commissioner, or duly authorized agents, may conduct
4.8 investigations, inquiries, and hearings under this chapter and,
4.9 in connection with such investigations, inquiries, and hearings,
4.10 the commissioner and the duly authorized agents shall have all
4.11 the powers conferred upon the commissioner and the
4.12 commissioner's examiners by section 270.06, and the provisions
4.13 of that section shall apply to all such investigations,
4.14 inquiries, and hearings.
4.15 Subd. 4. [EXPENSES OF ADMINISTRATION.] Expenses for the
4.16 administration of this chapter shall be paid out of
4.17 appropriations to the commissioner for the administration of
4.18 this chapter and shall include fees and expenses incurred by the
4.19 attorney general and any county attorney in litigation in
4.20 connection with the enforcement of this chapter. Expenses also
4.21 include all court costs and expenses.
4.22 Sec. 3. [297G.03] [DISTILLED SPIRITS AND WINE; RATE OF
4.23 TAX.]
4.24 Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.]
4.25 The following excise tax is imposed on all distilled spirits and
4.26 wine manufactured, imported, sold, or possessed in this state:
4.27 Standard Metric
4.28 (a) Distilled spirits, $5.03 per gallon $1.33 per liter
4.29 liqueurs, cordials,
4.30 and specialties regardless
4.31 of alcohol content
4.32 (excluding ethyl alcohol)
4.33 (b) Wine containing $ .30 per gallon $ .08 per liter
4.34 14 percent or less
4.35 alcohol by volume
4.36 (c) Wine containing $ .95 per gallon $ .25 per liter
5.1 more than 14 percent
5.2 but not more than 21
5.3 percent alcohol by volume
5.4 (d) Wine containing more $1.82 per gallon $ .48 per liter
5.5 than 21 percent but not
5.6 more than 24 percent
5.7 alcohol by volume
5.8 (e) Wine containing more $3.52 per gallon $ .93 per liter
5.9 than 24 percent alcohol
5.10 by volume
5.11 (f) Natural and $1.82 per gallon $ .48 per liter
5.12 artificial sparkling wines
5.13 containing alcohol
5.14 In computing the tax on a package of distilled spirits or
5.15 wine, a proportional tax at a like rate on all fractional parts
5.16 of a gallon or liter must be paid, except that the tax on a
5.17 fractional part of a gallon less than 1/16 of a gallon is the
5.18 same as for 1/16 of a gallon.
5.19 Subd. 2. [TAX ON MINIATURES; DISTILLED SPIRITS.] The tax
5.20 on miniatures is 14 cents per bottle.
5.21 Subd. 3. [TAX IS METRIC.] The metric tax is imposed on all
5.22 products taxable under this section when the net contents are
5.23 stated in metric units of measure. The commissioner may
5.24 establish by rule a date and procedure for the conversion of
5.25 excise tax computation and reporting from rates expressed in
5.26 gallons to rates expressed in metric volumes. The official
5.27 conversion factor is one liter equals 0.264172 United States
5.28 gallons.
5.29 Subd. 4. [BOTTLE TAX.] A tax of one cent is imposed on
5.30 each bottle or container of distilled spirits and wine except as
5.31 provided in 297G.07, subdivision 3. The wholesaler is
5.32 responsible for the payment of this tax when the bottles of
5.33 distilled spirits and wine are removed from inventory for sale,
5.34 delivery, or shipment.
5.35 Sec. 4. [297G.04] [FERMENTED MALT BEVERAGES; RATE OF TAX.]
5.36 Subdivision 1. [TAX IMPOSED.] The following excise tax is
6.1 imposed on all fermented malt beverages that are imported,
6.2 directly or indirectly sold, or possessed in this state:
6.3 (1) on fermented malt beverages containing not more than
6.4 3.2 percent alcohol by weight, $2.40 per 31-gallon barrel;
6.5 (2) on fermented malt beverages containing more than 3.2
6.6 percent alcohol by weight, $4.60 per 31-gallon barrel.
6.7 For fractions of a 31-gallon barrel, the tax rate is
6.8 calculated proportionally.
6.9 Subd. 2. [TAX CREDIT.] A qualified brewer producing
6.10 fermented malt beverages is entitled to a tax credit of $4.60
6.11 per barrel on 25,000 barrels sold in any fiscal year beginning
6.12 July 1, regardless of the alcohol content of the product.
6.13 Qualified brewers may take the credit on the 18th day of each
6.14 month, but the total credit allowed may not exceed in any fiscal
6.15 year the lesser of:
6.16 (1) the liability for tax; or
6.17 (2) $115,000.
6.18 For purposes of this subdivision, a "qualified brewer"
6.19 means a brewer, whether or not located in this state,
6.20 manufacturing less than 100,000 barrels of fermented malt
6.21 beverages in the calendar year immediately preceding the
6.22 calendar year for which the credit under this subdivision is
6.23 claimed. In determining the number of barrels, all brands or
6.24 labels of a brewer must be combined. All facilities for the
6.25 manufacture of fermented malt beverages owned or controlled by
6.26 the same person, corporation, or other entity must be treated as
6.27 a single brewer.
6.28 Sec. 5. [297G.05] [USE TAX; RATE OF TAX.]
6.29 Subdivision 1. [WINE AND DISTILLED SPIRITS.] A tax is
6.30 imposed on the use or storage by consumers of wine and distilled
6.31 spirits in this state, and on such consumers, at the rates
6.32 specified in section 297G.03, subdivision 1.
6.33 Subd. 2. [FERMENTED MALT BEVERAGES.] A tax is imposed on
6.34 the use or storage by consumers of fermented malt beverages in
6.35 this state, and on such consumers, at the rates specified in
6.36 section 297G.04, subdivision 1.
7.1 Subd. 3. [TAX PROVISIONS APPLICABLE TO CONSUMERS.] All of
7.2 the provisions of this chapter relating to the correction of
7.3 returns, deficiency assessments, protests, hearings, interest
7.4 and penalties, and collection of taxes, apply to consumers.
7.5 Sec. 6. [297G.06] [TAX AS PERSONAL DEBT.]
7.6 The tax imposed by this chapter, and interest and penalties
7.7 imposed with respect to it, is a personal debt of the person
7.8 required to file a return from the time the liability for it
7.9 arises, regardless of when the time for payment of the liability
7.10 occurs. In the case of the executor or administrator of the
7.11 estate of a decedent and in the case of any fiduciary, the debt
7.12 is that of the person in the person's official or fiduciary
7.13 capacity only, unless the person has voluntarily distributed the
7.14 assets held in that capacity without reserving sufficient assets
7.15 to pay the tax, interest, and penalties. In that case, the
7.16 person is personally liable for the deficiency.
7.17 Sec. 7. [297G.07] [EXEMPTIONS FROM TAX.]
7.18 Subdivision 1. [EXEMPTIONS.] The following are not subject
7.19 to the excise tax:
7.20 (1) Sales by a manufacturer, brewer, or wholesaler for
7.21 shipment outside the state in interstate commerce.
7.22 (2) Alcoholic beverages sold or transferred between
7.23 Minnesota wholesalers.
7.24 (3) Sales to common carriers engaged in interstate
7.25 transportation of passengers, except as provided in this chapter.
7.26 (4) Malt beverages served by a brewery for on-premise
7.27 consumption at no charge, or distributed to brewery employees
7.28 for on-premise consumption under a labor contract.
7.29 (5) Shipments of wine to Minnesota residents under section
7.30 340A.417.
7.31 (6) Fruit juices naturally fermented or beer naturally
7.32 brewed in the home for family use.
7.33 (7) Sales of wine for sacramental purposes under section
7.34 340A.316.
7.35 (8) Alcoholic beverages sold to authorized manufacturers of
7.36 food products or pharmaceutical firms. The alcoholic beverage
8.1 must be used exclusively in the manufacture of food products or
8.2 medicines. For purposes of this clause, "manufacturer" means a
8.3 person who manufactures food products intended for sale to
8.4 wholesalers or retailers for ultimate sale to the consumer.
8.5 (9) Liqueur-filled candy.
8.6 (10) Sales to a federal agency, that the state of Minnesota
8.7 is prohibited from taxing under the constitution or laws of the
8.8 United States or under the constitution of Minnesota.
8.9 (11) Sales to Indian tribes as defined in section 297G.08.
8.10 Subd. 2. [IMPORTATION BY INDIVIDUALS.] (a) A person, other
8.11 than a person under the age of 21 years, entering Minnesota from
8.12 another state may have in possession one liter of intoxicating
8.13 liquor or 288 ounces of fermented malt beverages without the
8.14 required payment of the Minnesota excise tax, provided the
8.15 alcoholic beverages accompany the person into this state and
8.16 will not be offered for sale or used for any commercial purposes.
8.17 (b) A person, other than a person under the age of 21
8.18 years, entering Minnesota from a foreign country may have in
8.19 possession four liters of intoxicating liquor or ten quarts (320
8.20 ounces) of fermented malt beverages without the required payment
8.21 of the Minnesota excise tax, provided the alcoholic beverages
8.22 accompany the person into this state and will not be offered for
8.23 sale or used for any commercial purposes.
8.24 (c) A collector of commemorative bottles, other than a
8.25 person under the age of 21 years, entering Minnesota from
8.26 another state may have in possession 12 or fewer commemorative
8.27 bottles without the required payment of the Minnesota excise tax.
8.28 (d) This subdivision does not apply to consignments of
8.29 alcoholic beverages shipped into this state by holders of
8.30 Minnesota import licenses or Minnesota manufacturers and
8.31 wholesalers when licensed by the commissioner of public safety
8.32 or to common carriers with licenses to sell intoxicating liquor
8.33 in more than one state.
8.34 Subd. 3. [EXEMPTIONS FROM BOTTLE TAX.] The following are
8.35 exempt from the bottle tax:
8.36 (1) miniatures of distilled spirits and wines;
9.1 (2) containers of fermented malt beverage;
9.2 (3) containers of intoxicating liquor or wine holding less
9.3 than 200 milliliters;
9.4 (4) containers of alcoholic beverages sold and shipped to
9.5 dealers, wineries, or distillers in other states;
9.6 (5) containers of alcoholic beverages sold to other
9.7 Minnesota wholesalers;
9.8 (6) containers of alcoholic beverages sold to common
9.9 carriers engaged in interstate commerce;
9.10 (7) containers of wine intended exclusively for sacramental
9.11 purposes;
9.12 (8) containers of alcoholic beverages sold to authorized
9.13 food processors or pharmaceutical firms for use exclusively in
9.14 the manufacturing of food products or medicines; and
9.15 (9) sales to a federal agency, that the state of Minnesota
9.16 is prohibited from taxing under the constitution or laws of the
9.17 United States or under the constitution of Minnesota.
9.18 Sec. 8. [297G.08] [SALES TO INDIAN TRIBES.]
9.19 Subdivision 1. [WHOLESALERS.] A wholesaler may set aside
9.20 the part of the wholesaler's stock necessary to make sales to
9.21 the established governing body of an Indian tribe recognized by
9.22 the United States Department of the Interior, without paying the
9.23 tax required by this chapter. The amount of untaxed stock that
9.24 wholesalers may deliver to an Indian reservation is limited to
9.25 amounts necessary to meet the personal consumption needs of
9.26 qualified purchasers. When shipping or delivering untaxed stock
9.27 to an Indian tribal organization, the wholesaler shall make a
9.28 true duplicate invoice. The invoice must show the complete
9.29 details of the sale or delivery. The wholesaler shall send the
9.30 duplicate to the commissioner not later than the 18th day of the
9.31 following calendar month. If a wholesaler fails to comply with
9.32 the requirements of this section, the commissioner shall revoke
9.33 the permission granted to the wholesaler to keep a stock of
9.34 untaxed goods.
9.35 Subd. 2. [RETAILERS.] Retailers who are Indian tribal
9.36 organizations may keep untaxed stock intended for sale to
10.1 qualified purchasers.
10.2 Subd. 3. [QUALIFIED PURCHASERS.] A qualified purchaser of
10.3 untaxed liquor means only an enrolled member of the Indian tribe
10.4 that is offering the liquor for sale.
10.5 Subd. 4. [SALES TO NONQUALIFIED BUYERS.] A retailer who
10.6 sells or otherwise disposes of untaxed liquor other than to a
10.7 qualified purchaser shall collect from the buyer or transferee
10.8 the tax imposed by this chapter and remit the tax to the
10.9 department of revenue at the same time and manner as required by
10.10 this chapter. If the retailer fails to collect the tax from the
10.11 buyer or transferee, or fails to remit the tax, the retailer is
10.12 personally responsible for the tax and the commissioner may
10.13 seize any liquor destined to be delivered to the retailer. The
10.14 procedures outlined in section 297G.20 apply to the seized
10.15 liquor. The proceeds of the sale of the liquor may be applied
10.16 to any tax liability owed by the retailer after deducting all
10.17 costs and expenses.
10.18 This section does not relieve the buyer or possessor of
10.19 untaxed liquor from personal liability for the tax.
10.20 Sec. 9. [297G.09] [RETURNS; PAYMENT OF TAX.]
10.21 Subdivision 1. [MONTHLY RETURNS; MANUFACTURERS,
10.22 WHOLESALERS, BREWERS, OR IMPORTERS.] On or before the 18th day
10.23 of each calendar month following the month in which a licensed
10.24 manufacturer or wholesaler first sells wine and distilled
10.25 spirits within the state, or a brewer or importer first sells or
10.26 imports fermented malt beverages, or a wholesaler knowingly
10.27 acquires title to or possession of untaxed fermented malt
10.28 beverages, the licensed manufacturer, wholesaler, brewer, or
10.29 importer liable for the excise tax must file a return with the
10.30 commissioner, and in addition must keep records and render
10.31 reports as required by the commissioner. Returns must be made
10.32 in a form and manner prescribed by the commissioner, and must
10.33 contain any other information required by the commissioner.
10.34 Returns must be accompanied by a remittance for the full unpaid
10.35 tax liability. Returns must be filed regardless of whether a
10.36 tax is due.
11.1 Subd. 2. [MONTHLY USE TAX RETURNS; CONSUMERS.] On or
11.2 before the 18th day of each calendar month, a consumer who has
11.3 acquired title to or possession of wine, distilled spirits, or
11.4 fermented malt beverages for use or storage in this state, upon
11.5 which wine, distilled spirits, or fermented malt beverages the
11.6 tax imposed by this chapter has not been paid, shall file a
11.7 return with the commissioner in the month following the month in
11.8 which the consumer obtains title to or possession of the wine,
11.9 distilled spirits, or fermented malt beverages. Returns must be
11.10 made in a form and manner prescribed by the commissioner and
11.11 must contain any other information required by the commissioner.
11.12 Returns must be accompanied by a remittance for the full unpaid
11.13 tax liability.
11.14 Subd. 3. [COMMON CARRIER RETURNS.] A common carrier
11.15 engaged in interstate transportation of passengers must file
11.16 monthly reports together with the tax payment on the sale of
11.17 alcoholic beverages sold in Minnesota. The report and payment
11.18 must be filed by the 18th day of the month following the month
11.19 in which the sale took place. A common carrier is permitted to
11.20 use a formula for the allocation of the total sales of alcoholic
11.21 beverages among states on the basis of passenger miles in each
11.22 state or some other method of allocation if written approval is
11.23 received from the commissioner.
11.24 Subd. 4. [EXTENSIONS.] When in the commissioner's
11.25 judgment, good cause exists, the commissioner may extend the
11.26 time for filing liquor tax returns for not more than six
11.27 months. The commissioner may require the taxpayer to file a
11.28 tentative return when the regularly required return is due, and
11.29 pay a tax on the basis of the tentative return at the times
11.30 required for the payment of taxes on the basis of the regularly
11.31 required return.
11.32 Subd. 5. [ACCELERATED TAX PAYMENT; PENALTY.] A person
11.33 liable for tax under this chapter having a liability of $120,000
11.34 or more during a fiscal year ending June 30, shall remit the
11.35 June liability for the next year in the following manner:
11.36 (a) Two business days before June 30 of the year, the
12.1 taxpayer shall remit the actual May liability and 75 percent of
12.2 the estimated June liability to the commissioner and file the
12.3 return in the form and manner prescribed by the commissioner.
12.4 (b) On or before August 18 of the year, the taxpayer shall
12.5 submit a return showing the actual June liability and pay any
12.6 additional amount of tax not remitted in June. A penalty is
12.7 imposed equal to ten percent of the amount of June liability
12.8 required to be paid in June less the amount remitted in June.
12.9 However, the penalty is not imposed if the amount remitted in
12.10 June equals the lesser of:
12.11 (1) 70 percent of the actual June liability; or
12.12 (2) 75 percent of the preceding May liability.
12.13 Subd. 6. [ELECTRONIC FUNDS TRANSFER.] A licensed brewer,
12.14 importer, or wholesaler having an excise tax liability of
12.15 $120,000 or more during a fiscal year ending June 30 must remit
12.16 all excise tax liabilities in the subsequent calendar year by
12.17 means of a funds transfer as defined in section 336.4A-104,
12.18 paragraph (a). The funds transfer payment date, as defined in
12.19 section 336.4A-401, must be on or before the date the excise tax
12.20 is due. If the date the excise tax is due is not a funds
12.21 transfer business day, as defined in section 336.4A-105,
12.22 paragraph (a), clause (4), the payment date must be on or before
12.23 the funds transfer business day next following the date the
12.24 excise tax is due.
12.25 Subd. 7. [ORDER PAYMENTS CREDITED.] All payments received
12.26 may, in the discretion of the commissioner, be credited first to
12.27 the oldest liability not secured by a judgment or lien, but in
12.28 all cases must be credited first to penalties, next to interest,
12.29 and then to the tax due.
12.30 Subd. 8. [INTEREST.] The amount of tax not timely paid,
12.31 together with any penalty imposed by this chapter, bears
12.32 interest at the rate specified in section 270.75 from the time
12.33 the tax should have been paid until paid. Any interest and
12.34 penalty is added to the tax and collected as a part of it.
12.35 Sec. 10. [297G.10] [DEPOSIT OF PROCEEDS.]
12.36 All tax revenues and other receipts payable to the state
13.1 under this chapter must be paid into the state treasury and
13.2 credited to the general fund.
13.3 Sec. 11. [297G.11] [INFORMATIONAL REPORTS.]
13.4 The following persons shall file with the commissioner a
13.5 monthly informational report in the form and manner prescribed
13.6 by the commissioner:
13.7 (1) a manufacturer, wholesaler, and importer licensed to
13.8 ship distilled spirits or wine into Minnesota;
13.9 (2) a person who manufactures distilled spirits or wine in
13.10 Minnesota;
13.11 (3) any other person who imports distilled spirits or wine
13.12 into Minnesota;
13.13 (4) a person who possesses, receives, stores, or warehouses
13.14 distilled spirits or wine in Minnesota, upon which the tax
13.15 imposed by this chapter has not been paid; and
13.16 (5) a person who possesses, receives, stores, or warehouses
13.17 distilled spirits or wine in Minnesota, which are required to
13.18 give bond as required by the Internal Revenue Code, subtitle E,
13.19 chapter 51.
13.20 No payment of any tax is required to be remitted with this
13.21 report. The report must be filed on or before the tenth day
13.22 following the end of each calendar month, regardless of whether
13.23 or not the person shipped, manufactured, possessed, received,
13.24 stored, or warehoused any distilled spirits or wine into or
13.25 within Minnesota during the previous month, unless the
13.26 commissioner determines that a longer filing period is
13.27 appropriate for a particular person. A person failing to file
13.28 this report is subject to the civil or criminal penalties
13.29 imposed by this chapter.
13.30 This section does not apply to the lawful importation of
13.31 wine and distilled spirits under section 297G.07, subdivision 2,
13.32 nor to any lawful manufacture of wine or distilled spirits
13.33 within the state for personal consumption.
13.34 Sec. 12. [297G.12] [REFUNDS.]
13.35 Subdivision 1. [OVERPAYMENT OF TAX.] An overpayment of the
13.36 tax imposed under this chapter may be refunded to the taxpayer,
14.1 provided that the claim for refund is filed within the time
14.2 prescribed under section 297G.16.
14.3 Subd. 2. [PRODUCTS DESTROYED.] The commissioner may refund
14.4 to a taxpayer the amount of tax paid under this chapter on
14.5 intoxicating liquor or fermented malt beverages which become
14.6 unfit for human consumption and are destroyed under an order by
14.7 a federal, state, or local agency while being held for sale by a
14.8 licensed retailer. The destruction must meet the requirements
14.9 of the environmental laws of this state.
14.10 Subd. 3. [WHOLESALER REFUND FOR BREAKAGE OF
14.11 INVENTORY.] The commissioner may refund to a wholesaler the
14.12 amount of tax paid under this chapter for the breakage of
14.13 inventory not subject to reimbursement from any insurance
14.14 proceeds. The commissioner may prescribe the method of proof
14.15 for obtaining the refund.
14.16 Subd. 4. [RETAILER REFUND FOR BREAKAGE OF INVENTORY.]
14.17 Refunds for breakage of inventory may be made to retailers only
14.18 if satisfactory proof is presented to the commissioner by the
14.19 wholesaler and the licensed retailer that the retailer was not
14.20 indemnified by insurance for the tax. The commissioner may
14.21 prescribe the method of proof required for obtaining the refund.
14.22 Subd. 5. [BAD DEBTS.] The commissioner may adopt rules
14.23 providing a refund of the tax paid under this chapter on
14.24 intoxicating liquor or wine if the tax paid qualifies as a bad
14.25 debt under section 166(a) of the Internal Revenue Code.
14.26 Subd. 6. [CREDIT AGAINST TAX.] The commissioner may credit
14.27 the amount determined under this section against taxes otherwise
14.28 payable under this chapter by the taxpayer.
14.29 Subd. 7. [SOURCE OF REFUND.] There is appropriated
14.30 annually from the general fund to the commissioner the sums
14.31 necessary to make the refunds provided by this section.
14.32 Sec. 13. [297G.13] [INSPECTION RIGHTS.]
14.33 The commissioner of public safety or the commissioner of
14.34 revenue, or their duly authorized employees, may, at any
14.35 reasonable time, without notice and without a search warrant,
14.36 enter in and upon a licensed premises, and examine the books,
15.1 papers, and records of a brewer, manufacturer, wholesaler, or
15.2 retailer for the purpose of determining whether the excise tax
15.3 has been paid, and may in addition inspect any premises where
15.4 fermented malt beverages are manufactured, sold, offered for
15.5 sale, possessed, or stored for the purpose of determining
15.6 whether the party is in full compliance with the provisions of
15.7 this chapter.
15.8 Sec. 14. [297G.14] [EXAMINATIONS AND AUDITS.]
15.9 Subdivision 1. [EXAMINATION OF THE TAXPAYER.] To determine
15.10 the accuracy of a return or report, or for the purpose of
15.11 collection, or in fixing liability or verifying information
15.12 regarding any tax under this chapter, the commissioner may make
15.13 reasonable examinations or investigations of a taxpayer's place
15.14 of business, tangible personal property, equipment, computer
15.15 systems and facilities, pertinent books, records, papers,
15.16 vouchers, computer printouts, accounts, and documents.
15.17 Subd. 2. [ACCESS TO RECORDS OF OTHER PERSONS IN CONNECTION
15.18 WITH THE EXAMINATION OF TAXPAYER.] When conducting an
15.19 investigation or an audit of a taxpayer, or for the purpose of
15.20 collection, or in fixing liability or verifying information
15.21 regarding any tax under this chapter, the commissioner may
15.22 examine, except where privileged by law, the relevant records
15.23 and files of a person, business, institution, financial
15.24 institution, state agency, agency of the United States
15.25 government, or agency of any other state where permitted by
15.26 statute, agreement, or reciprocity. The commissioner may compel
15.27 production of these records by subpoena. A subpoena may be
15.28 served directly by the commissioner.
15.29 Subd. 3. [POWER TO COMPEL TESTIMONY.] In the
15.30 administration of any tax under this chapter, the commissioner
15.31 may:
15.32 (1) administer oaths or affirmations and compel by subpoena
15.33 the attendance of witnesses, testimony, and the production of a
15.34 person's pertinent books, records, papers, and other data for
15.35 inspection and copying;
15.36 (2) examine under oath or affirmation any person regarding
16.1 the business of a taxpayer concerning any relevant matter
16.2 incident to the administration of any tax under this chapter.
16.3 The fees of witnesses required by the commissioner to attend a
16.4 hearing are equal to those allowed to witnesses appearing before
16.5 courts of this state. The fees must be paid in the manner
16.6 provided for the payment of other expenses incident to the
16.7 administration of any tax under this chapter; and
16.8 (3) in addition to other remedies that may be available,
16.9 bring an action in equity by the state against a taxpayer for an
16.10 injunction ordering the taxpayer to file a complete and proper
16.11 return or amended return. The district courts of this state
16.12 have jurisdiction over the action and disobedience of an
16.13 injunction issued under this clause may be punished as a
16.14 contempt of district court.
16.15 Subd. 4. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY
16.16 IS KNOWN.] An investigation may extend to a person that the
16.17 commissioner determines has access to information that may be
16.18 relevant to the examination or investigation. When a subpoena
16.19 requiring the production of records as described in subdivision
16.20 4 is served on a third-party recordkeeper, written notice of the
16.21 subpoena must be mailed to the taxpayer and to any other person
16.22 who is identified in the subpoena. The notices must be given
16.23 within three days of the day on which the subpoena is served.
16.24 Notice to the taxpayer required by this section is sufficient if
16.25 it is mailed to the last address on record with the commissioner.
16.26 The provisions of this subdivision relating to notice to
16.27 the taxpayer or other parties identified in the subpoena do not
16.28 apply if there is reasonable cause to believe that the giving of
16.29 notice may lead to attempts to conceal, destroy, or alter
16.30 records relevant to the examination, to prevent the
16.31 communication of information from other persons through
16.32 intimidation, bribery, or collusion, or to flee to avoid
16.33 prosecution, testifying, or production of records.
16.34 Subd. 5. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY
16.35 IS NOT KNOWN.] A subpoena that does not identify the person or
16.36 persons whose tax liability is investigated may be served only
17.1 if:
17.2 (1) the subpoena relates to the investigation of a
17.3 particular person or an ascertainable group or class of persons;
17.4 (2) there is reasonable basis for believing that the person
17.5 or group or class of persons may fail or may have failed to
17.6 comply with the tax laws administered by the commissioner;
17.7 (3) the information sought to be obtained from the
17.8 examination of the records, and the identity of the person or
17.9 persons with respect to whose liability the subpoena is issued,
17.10 is not readily available from other sources;
17.11 (4) the subpoena is clear and specific concerning the
17.12 information sought to be obtained; and
17.13 (5) the information sought to be obtained is limited solely
17.14 to the scope of the investigation.
17.15 The party served with a subpoena that does not identify the
17.16 person or persons with respect to whose tax liability the
17.17 subpoena is issued may, within 20 days after service of the
17.18 subpoena, petition the district court in the judicial district
17.19 in which that party is located for a determination concerning
17.20 whether the commissioner has complied with all the requirements
17.21 in clauses (1) to (5), and thus, whether the subpoena is
17.22 enforceable. If no petition is made by the party served within
17.23 the time prescribed, the subpoena has the effect of a court
17.24 order.
17.25 Subd. 6. [REQUEST BY TAXPAYER FOR SUBPOENA.] When the
17.26 commissioner has the power to issue a subpoena for investigative
17.27 or auditing purposes, the commissioner shall honor a reasonable
17.28 request by the taxpayer to issue a subpoena on the taxpayer's
17.29 behalf, if in connection with the investigation or audit.
17.30 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF
17.31 SUBPOENA.] Disobedience of subpoenas issued under this section
17.32 shall be punished by the district court of the district in which
17.33 the party served with the subpoena is located, in the same
17.34 manner as contempt of the district court.
17.35 Subd. 8. [COST OF PRODUCTION OF RECORDS.] The cost of
17.36 producing records of a third party required by a subpoena must
18.1 be paid by the taxpayer, if the taxpayer requests the subpoena
18.2 to be issued, or if the taxpayer has the records available but
18.3 has refused to provide them to the commissioner. In other cases
18.4 when the taxpayer cannot produce records and the commissioner
18.5 then initiates a subpoena for third-party records, the
18.6 commissioner shall pay the reasonable cost of producing the
18.7 records. The commissioner may later assess the reasonable costs
18.8 against the taxpayer if the records contribute to the
18.9 determination of an assessment of tax against the taxpayer.
18.10 Subd. 9. [PHYSICAL INVENTORY.] The commissioner or the
18.11 commissioner's authorized agents may, as considered necessary,
18.12 require a manufacturer, wholesaler, or retailer to furnish a
18.13 physical inventory of all wine and distilled spirits in stock.
18.14 The inventory must contain the information that the commissioner
18.15 requests and must be certified by an officer of the corporation.
18.16 Sec. 15. [297G.15] [ASSESSMENTS.]
18.17 Subdivision 1. [GENERAL RULE.] The commissioner shall make
18.18 determinations, corrections, and assessments with respect to any
18.19 tax under this chapter, including interest, additions to taxes,
18.20 and assessable penalties. The commissioner may use statistical
18.21 or other sampling techniques consistent with generally accepted
18.22 auditing standards in examining returns or records and making
18.23 assessments.
18.24 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails
18.25 to file a required return, the commissioner, from information in
18.26 the commissioner's possession or obtainable by the commissioner,
18.27 may make a return for the taxpayer. The return is prima facie
18.28 correct and valid.
18.29 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO
18.30 TAXPAYER.] (a) When a return has been filed and the commissioner
18.31 determines that the tax disclosed by the return is different
18.32 than the tax determined by the examination, the commissioner
18.33 shall send an order of assessment to the taxpayer. When no
18.34 return has been filed, the commissioner may make a return for
18.35 the taxpayer under subdivision 2 or may send an order of
18.36 assessment under this subdivision. The order must explain the
19.1 basis for the assessment and must explain the taxpayer's appeal
19.2 rights. An order of assessment is final when made but may be
19.3 reconsidered by the commissioner under this chapter.
19.4 (b) The taxes are considered assessed when the commissioner
19.5 has prepared a notice of tax assessment and mailed it to the
19.6 person required to file a return to the post office address
19.7 given in the return. The notice of tax assessment must be sent
19.8 by mail to the post office address given in the return and the
19.9 record of the mailing is presumptive evidence of the giving of
19.10 notice, and such records must be preserved by the commissioner.
19.11 (c) No collection action can be taken, including the filing
19.12 of liens under section 270.69, and no late payment penalty under
19.13 this chapter is imposed when a return has been filed for the
19.14 taxable period upon which the order is based, if the amount
19.15 shown on the order is paid to the commissioner:
19.16 (1) within 60 days after the order has been mailed to the
19.17 taxpayer by the commissioner; or
19.18 (2) if an administrative appeal is filed under this
19.19 chapter, or a tax court appeal is filed under chapter 271,
19.20 within 60 days following final determination of the appeal if
19.21 the appeal is based upon a constitutional challenge to the tax,
19.22 and if not, when the decision of the tax court is made.
19.23 Subd. 4. [ERRONEOUS REFUNDS OR CREDITS.] An erroneous
19.24 refund or credit is considered an underpayment of tax on the
19.25 date made. An assessment of a deficiency arising out of an
19.26 erroneous refund or credit must be made within 3-1/2 years from
19.27 the date prescribed for filing the return, plus any extension of
19.28 time granted for filing the return, but only if filed within the
19.29 extended time, or two years from the time the tax is paid in
19.30 full, whichever period expires later.
19.31 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or
19.32 assessment of tax made by the commissioner is prima facie
19.33 correct and valid. The taxpayer has the burden of establishing
19.34 its incorrectness or invalidity in any related action or
19.35 proceeding.
19.36 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The
20.1 commissioner, on examining returns of a taxpayer for more than
20.2 one year or period, may issue one order covering the period
20.3 under examination that reflects the aggregate refund or
20.4 additional tax due.
20.5 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment,
20.6 sent postage prepaid by United States mail to the taxpayer at
20.7 the taxpayer's last known address, is sufficient even if the
20.8 taxpayer is deceased or is under a legal disability, or, in the
20.9 case of a corporation, has terminated its existence, unless the
20.10 department has been provided with a new address by a party
20.11 authorized to receive notices of assessment.
20.12 Sec. 16. [297G.16] [STATUTES OF LIMITATIONS.]
20.13 Subdivision 1. [GENERAL RULE.] Except as otherwise
20.14 provided in this chapter, the amount of any tax due must be
20.15 assessed within 3-1/2 years after a return is filed.
20.16 Subd. 2. [DATE OF FILING.] For the purposes of this
20.17 section, a return filed before the last day prescribed by law
20.18 for filing is considered filed on the last day.
20.19 Subd. 3. [FALSE OR FRAUDULENT RETURN OR CLAIM FOR REFUND;
20.20 NO RETURN.] When a person required to file a return under this
20.21 chapter files a false or fraudulent return or claim for refund,
20.22 or fails to file a return, the tax may be assessed, and a
20.23 proceeding in court for the collection of such tax may be begun
20.24 at any time.
20.25 Subd. 4. [OMISSION IN EXCESS OF 25 PERCENT.] If a person
20.26 required to file a return omits from the return an amount
20.27 properly includable in it that is in excess of 25 percent of the
20.28 amount of tax reported in the return, the tax may be assessed,
20.29 or a proceeding in court for the collection of the tax may be
20.30 begun, at any time within 6-1/2 years after the return was filed.
20.31 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise
20.32 provided in this chapter, a claim for a refund of an overpayment
20.33 of tax must be filed within 3-1/2 years from the date prescribed
20.34 for filing the return, plus any extension of time granted for
20.35 filing the return, but only if filed within the extended time,
20.36 or two years from the time the tax is paid in full, whichever
21.1 period expires later. Claimants under this section are subject
21.2 to the notice requirements of section 289A.38, subdivision 7.
21.3 Subd. 6. [TIME LIMIT FOR A DESTRUCTION ORDER REFUND.]
21.4 Claims for refund under section 297G.12, subdivision 2, must be
21.5 filed with the commissioner within one year from the date of the
21.6 breakage or destruction order.
21.7 Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for
21.8 refund must be filed with the commissioner within one year of
21.9 the filing of the taxpayer's income tax return containing the
21.10 bad debt deduction that is being claimed.
21.11 Subd. 8. [CONSENT TO EXTEND TIME.] If, before the
21.12 expiration of the time prescribed in this chapter for the
21.13 assessment of the tax, the commissioner and the person filing
21.14 the return consent in writing to an extension of time for the
21.15 assessment of the tax, the tax may be assessed at any time
21.16 before the expiration of the period agreed upon. The period so
21.17 agreed upon may be extended by subsequent agreements in writing
21.18 made before the expiration of the period previously agreed upon.
21.19 Subd. 9. [BANKRUPTCY; SUSPENSION OF TIME.] The running of
21.20 the period during which a tax must be assessed or collection
21.21 proceedings commenced is suspended during the period from the
21.22 date of a filing of a petition in bankruptcy until 30 days after
21.23 either notice to the commissioner that the bankruptcy
21.24 proceedings have been closed or dismissed, or the automatic stay
21.25 has been terminated or has expired, whichever occurs first.
21.26 The suspension of the statute of limitations under this
21.27 section applies to the person the petition in bankruptcy is
21.28 filed against and other persons who may also be wholly or
21.29 partially liable for the tax.
21.30 Sec. 17. [297G.17] [INTEREST.]
21.31 Subdivision 1. [INTEREST RATE.] When interest is required
21.32 under this section, interest is computed at the rate specified
21.33 in section 270.75.
21.34 Subd. 2. [LATE PAYMENT.] If a tax under this chapter is
21.35 not paid within the time named by law for payment, the unpaid
21.36 tax bears interest from the date the tax should have been paid
22.1 until the date the tax is paid.
22.2 Subd. 3. [EXTENSIONS.] When an extension of time for
22.3 payment has been granted, interest must be paid from the date
22.4 the payment should have been made, if no extension had been
22.5 granted, until the date the tax is paid.
22.6 Subd. 4. [ADDITIONAL ASSESSMENTS.] When a taxpayer is
22.7 liable for additional taxes because of a redetermination by the
22.8 commissioner, or for any other reason, the additional taxes bear
22.9 interest from the time the tax should have been paid, without
22.10 regard to an extension allowed, until the date the tax is paid.
22.11 Subd. 5. [ERRONEOUS REFUNDS OR CREDITS.] In the case of an
22.12 erroneous refund or credit, interest begins to accrue from the
22.13 date the refund or credit was paid unless the erroneous refund
22.14 or credit results from a mistake of the department, in which
22.15 case no interest or penalty is imposed, unless the deficiency
22.16 assessment is not satisfied within 60 days of the order.
22.17 Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section
22.18 549.09, if judgment is entered in favor of the commissioner with
22.19 regard to any tax under this chapter, the judgment bears
22.20 interest at the rate given in section 270.75 from the date the
22.21 judgment is entered until the date of payment.
22.22 Subd. 7. [INTEREST ON PENALTIES.] (a) A penalty imposed
22.23 under section 297G.18, subdivisions 2 to 7, bears interest from
22.24 the date the return or payment was required to be filed or paid,
22.25 including any extensions, to the date of payment of the penalty.
22.26 (b) A penalty not included in paragraph (a) bears interest
22.27 only if it is not paid within ten days from the date of the
22.28 notice. In that case interest is imposed from the date of
22.29 notice to the date of payment.
22.30 Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid
22.31 on an overpayment refunded or credited to the taxpayer from the
22.32 date of payment of the tax until the date the refund is paid or
22.33 credited.
22.34 Sec. 18. [297G.18] [CIVIL PENALTIES.]
22.35 Subdivision 1. [GENERAL RULE.] The commissioner may
22.36 recover the amount of any tax due under this chapter, as well as
23.1 any interest and penalty in a civil action. The collection of a
23.2 tax, interest, or penalty does not bar any prosecution under
23.3 this chapter.
23.4 Subd. 2. [PENALTY FOR FAILURE TO PAY TAX.] If a tax
23.5 imposed by this chapter is not paid within the time specified
23.6 for payment, a penalty is added to the amount required to be
23.7 shown as tax. The penalty is five percent of the tax not paid
23.8 on or before the date specified for payment of the tax if the
23.9 failure is for not more than 30 days, with an additional penalty
23.10 of five percent of the amount of tax remaining unpaid during
23.11 each additional 30 days or fraction of 30 days during which the
23.12 failure continues, not exceeding 15 percent in the aggregate.
23.13 Subd. 3. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If
23.14 a taxpayer fails to make and file a return within the time
23.15 prescribed, including any extension, a penalty of five percent
23.16 of the amount of tax not timely paid is added to the tax. If no
23.17 tax is due, a penalty of $25 is assessed for each unfiled return.
23.18 Subd. 4. [COMBINED PENALTIES.] When penalties are imposed
23.19 under subdivisions 2 and 3, the penalties combined must not
23.20 exceed 38 percent in the aggregate.
23.21 Subd. 5. [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR
23.22 RULES.] If part of an additional assessment is due to negligence
23.23 or intentional disregard of the provisions of the applicable tax
23.24 laws or rules of the commissioner, but without an intent to
23.25 defraud, there must be added to the tax an amount equal to ten
23.26 percent of the additional assessment.
23.27 Subd. 6. [PENALTY FOR REPEATED FAILURES TO FILE OR PAY
23.28 TAXES.] If there is a pattern by a person of repeated failures
23.29 to timely file returns or timely pay taxes, and written notice
23.30 is given that a penalty will be imposed if such failures
23.31 continue, a penalty of 25 percent of the amount of tax not
23.32 timely paid as a result of each such subsequent failure is added
23.33 to the tax. The penalty can be abated under the abatement
23.34 authority in section 270.07, subdivisions 1, paragraph (e), and
23.35 6.
23.36 Subd. 7. [PENALTY FOR FALSE OR FRAUDULENT RETURN;
24.1 EVASION.] If a person files a false or fraudulent return, or
24.2 attempts in any manner to evade or defeat a tax or payment of
24.3 tax, there is imposed on the person a penalty equal to 50
24.4 percent of the tax due for the period to which the return
24.5 related, less amounts paid by the person on the basis of the
24.6 false or fraudulent return.
24.7 Subd. 8. [REVOCATION OR SUSPENSION OF LICENSE.] The
24.8 commissioner may certify to the commissioner of public safety
24.9 any failure to pay taxes when due as a violation of the statute
24.10 relating to the sale of intoxicating liquor for possible
24.11 revocation or suspension of license.
24.12 Subd. 9. [FAILURE TO FILE INFORMATIONAL RETURNS.] A person
24.13 required to file informational returns or reports that fails to
24.14 do so as required by this chapter is assessed a $25 penalty for
24.15 each month the return remains unfiled.
24.16 Subd. 10. [PAYMENT OF PENALTIES.] The penalties imposed by
24.17 this section are collected and paid in the same manner as taxes.
24.18 Subd. 11. [PENALTIES ARE ADDITIONAL.] The civil penalties
24.19 imposed by this section are in addition to the criminal
24.20 penalties imposed by this chapter.
24.21 Sec. 19. [297G.19] [CRIMINAL PENALTIES.]
24.22 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a)
24.23 A person required to file a return, report, or other document
24.24 with the commissioner who fails to do so is guilty of a
24.25 misdemeanor.
24.26 (b) A person required to pay or to collect and remit a tax
24.27 under this chapter, who fails to do so when required, is guilty
24.28 of a misdemeanor.
24.29 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR
24.30 PAY.] (a) A person required to file a return, report, or other
24.31 document with the commissioner, who knowingly, rather than
24.32 accidentally, inadvertently, or negligently, fails to file it
24.33 when required, is guilty of a gross misdemeanor.
24.34 (b) A person required to pay or to collect and remit a tax
24.35 under this chapter, who knowingly, rather than accidentally,
24.36 inadvertently, or negligently, fails to file it when required,
25.1 is guilty of a gross misdemeanor.
25.2 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A
25.3 person who files with the commissioner a return, report, or
25.4 other document, known by the person to be fraudulent or false
25.5 concerning a material matter, is guilty of a felony.
25.6 (b) A person who knowingly aids or assists in, or advises
25.7 in the preparation or presentation of a return, report, or other
25.8 document that is fraudulent or false concerning a material
25.9 matter, whether or not the falsity or fraud is committed with
25.10 the knowledge or consent of the person authorized or required to
25.11 present the return, report, or other document, is guilty of a
25.12 felony.
25.13 Subd. 4. [IMPORTATION FROM ANOTHER STATE.] (a) A person
25.14 entering Minnesota from another state who imports or possesses
25.15 more than one liter, but fewer than 25 liters of untaxed
25.16 intoxicating liquor, or more than 288 ounces (nine quarts), but
25.17 fewer than 6,800 ounces (225 quarts) of untaxed fermented malt
25.18 beverages is guilty of a misdemeanor.
25.19 (b) A person entering Minnesota from another state who
25.20 imports or possesses 25 liters or more, but fewer than 225
25.21 liters of untaxed intoxicating liquor, or 6,800 ounces (225
25.22 quarts) or more, but fewer than 34,000 ounces (1,225 quarts) of
25.23 untaxed fermented malt beverages is guilty of a gross
25.24 misdemeanor.
25.25 (c) A person entering Minnesota from another state who
25.26 imports or possesses 225 liters or more of untaxed intoxicating
25.27 liquor, or 34,000 ounces (1,225 quarts) or more of untaxed
25.28 fermented malt beverages is guilty of a felony.
25.29 Subd. 5. [IMPORTATION FROM A FOREIGN COUNTRY.] (a) A
25.30 person entering Minnesota from a foreign country who imports or
25.31 possesses more than four liters, but fewer than 100 liters of
25.32 untaxed intoxicating liquor, or more than 320 ounces (ten
25.33 quarts), but fewer than 8,000 ounces (250 quarts) of untaxed
25.34 fermented malt beverages is guilty of a misdemeanor.
25.35 (b) A person entering Minnesota from a foreign country who
25.36 imports or possesses 100 liters or more, but fewer than 500
26.1 liters of untaxed intoxicating liquor, or 8,000 ounces (250
26.2 quarts) or more, but fewer than 40,000 ounces (1,250 quarts) of
26.3 untaxed fermented malt beverages is guilty of a gross
26.4 misdemeanor.
26.5 (c) A person entering Minnesota from a foreign country who
26.6 imports or possesses 500 liters or more of untaxed intoxicating
26.7 liquor, or 40,000 ounces (1,250 quarts) or more of untaxed
26.8 fermented malt beverages is guilty of a felony.
26.9 Subd. 6. [PENALTIES ARE ADDITIONAL.] Criminal penalties
26.10 imposed by this section are in addition to any civil penalties
26.11 imposed by this chapter.
26.12 Subd. 7. [OTHER PENALTIES.] Any violation of this chapter
26.13 unless otherwise specified is a misdemeanor.
26.14 Subd. 8. [STATUTE OF LIMITATIONS.] Notwithstanding section
26.15 628.26, or any other provision of the criminal laws of this
26.16 state, an indictment may be found and filed, or a complaint
26.17 filed, upon a criminal offense named in this section, in the
26.18 proper court within six years after the offense is committed.
26.19 Sec. 20. [297G.20] [CONTRABAND.]
26.20 Subdivision 1. [CONTRABAND DEFINED.] The following are
26.21 declared to be contraband and therefore subject to civil and
26.22 criminal penalties and seizure under this chapter:
26.23 (1) All distilled spirits, wine, and fermented malt
26.24 beverages possessed or held with intent to sell without payment
26.25 of an excise tax.
26.26 (2) All distilled spirits, wine, and fermented malt
26.27 beverages sold without payment of an excise tax.
26.28 (3) All distilled spirits, wine, and fermented malt
26.29 beverages transported without payment of an excise tax.
26.30 (4) Devices including, but not limited to, motor vehicles,
26.31 trailers, snowmobiles, airplanes, and boats used with the
26.32 knowledge of the owner, or of a person operating with the
26.33 consent of the owner, for the storage or transportation of
26.34 distilled spirits, wine, and fermented malt beverages which are
26.35 contraband under this subdivision.
26.36 Subd. 2. [EXCEPTION.] When distilled spirits, wine, and
27.1 fermented malt beverages are being transported in the course of
27.2 interstate commerce, or are in movement from either a public
27.3 warehouse to a wholesaler upon orders from a manufacturer or
27.4 wholesaler, or from one wholesaler to another, the distilled
27.5 spirits, wine, and fermented malt beverages are not contraband,
27.6 notwithstanding the provisions of subdivision 1.
27.7 Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented
27.8 malt beverages, or other property made contraband by subdivision
27.9 1 may be seized by the commissioner of revenue or public safety
27.10 and their authorized agents or by any sheriff or other police
27.11 officer, with or without process, and are subject to forfeiture
27.12 as provided in subdivisions 4 and 5.
27.13 Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
27.14 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the
27.15 seizure of alleged contraband, the person making the seizure
27.16 shall make available an inventory of the property seized to the
27.17 person from whom the the property was seized, if known, and file
27.18 a copy with both the commissioners of revenue and public safety.
27.19 Within ten days after the date of service of the inventory, the
27.20 person from whom the property was seized or any person claiming
27.21 an interest in the property may file with the seizing authority
27.22 a demand for judicial determination of whether the property was
27.23 lawfully subject to seizure and forfeiture. Within 60 days
27.24 after the date of the filing of the demand, the seizing
27.25 authority must bring an action in the district court of the
27.26 county where seizure was made to determine the issue of
27.27 forfeiture.
27.28 (b) The action must be brought in the name of the state and
27.29 must be prosecuted by the county attorney or by the attorney
27.30 general. The court shall hear the action without a jury and
27.31 determine the issues of fact and law involved.
27.32 (c) If a judgment of forfeiture is entered, the seizing
27.33 authority may, unless the judgment is stayed pending an appeal,
27.34 either:
27.35 (1) cause the forfeited property to be destroyed; or
27.36 (2) cause it to be sold at a public auction as provided by
28.1 law.
28.2 (d) If demand for judicial determination is made and no
28.3 action is commenced by the seizing authority as provided in this
28.4 subdivision, the property must be released by the seizing
28.5 authority and delivered to the person entitled to it. If no
28.6 demand is made, the property seized is considered forfeited to
28.7 the seizing authority by operation of law and may be disposed of
28.8 by the seizing authority as provided for a judgment of
28.9 forfeiture. When the seizing authority is satisfied that a
28.10 person from whom property is seized was acting in good faith and
28.11 without intent to evade the tax imposed by this chapter, the
28.12 seizing authority shall release the property seized without
28.13 further legal proceedings.
28.14 Subd. 5. [DISPOSAL.] (a) The property described in
28.15 subdivision 1, clause (4), must be confiscated after conviction
28.16 of the person from whom it was seized, upon compliance with the
28.17 following procedure: the seizing authority shall file with the
28.18 court a separate complaint against the property, describing it
28.19 and charging its use in the specific violation, and specifying
28.20 substantially the time and place of the unlawful use. A copy of
28.21 the complaint must be served upon the defendant or person in
28.22 charge of the seizure, if any.
28.23 (b) If the person arrested is acquitted, the court shall
28.24 dismiss the complaint against the property and order it returned
28.25 to the persons legally entitled to it. Upon conviction of the
28.26 person arrested, the court shall issue an order directed to any
28.27 person known or believed to have any right, title, or interest
28.28 in, or lien upon, any of the property, and to persons unknown
28.29 claiming any right, title, interest, or lien in it, describing
28.30 the property and (1) stating that it was seized and that a
28.31 complaint against it, charging the specified violation, has been
28.32 filed with the court, (2) requiring the persons to file with the
28.33 court administrator their answer to the complaint, setting forth
28.34 any claim they may have to any right or title to, interest in,
28.35 or lien upon the property, within 30 days after the service of
28.36 the order, and (3) notifying them in substance that if they fail
29.1 to file their answer within the time, the property will be
29.2 ordered sold by the seizing authority.
29.3 (c) The court shall cause the order to be served upon any
29.4 person known or believed to have any right, title, interest, or
29.5 lien as in the case of a summons in a civil action, and upon
29.6 unknown persons by publication, as provided for service of
29.7 summons in a civil action. If an answer is filed within the
29.8 time provided, the court shall fix a time for hearing, which
29.9 must not be less than ten nor more than 30 days after the time
29.10 for filing the answer expires. If no answer is filed within the
29.11 time prescribed, upon affidavit by the court administrator,
29.12 setting forth the fact, the court shall order the property sold
29.13 by the seizing authority. Seventy-five percent of the proceeds
29.14 of the sale of forfeited property, after payment of seizure,
29.15 storage, forfeiture, and sale expenses, must be forwarded to the
29.16 seizing authority for deposit as a supplement to its operating
29.17 fund or similar fund for official use, and 25 percent must be
29.18 forwarded to the county attorney or other prosecuting agency
29.19 that handled the forfeiture for deposit as a supplement to its
29.20 operating fund or similar fund for prosecutorial purposes.
29.21 (d) At the time fixed for hearing, unless continued for
29.22 cause, the matter must be heard and determined by the court,
29.23 without a jury as in other civil actions. If the court finds
29.24 that the property, or any part of it, was used in the violation
29.25 specified in the complaint, it shall order the unlawfully used
29.26 property sold as provided by law, unless the owner shows to the
29.27 satisfaction of the court that the owner had no notice or
29.28 knowledge or reason to believe that the property was used or
29.29 intended to be used in the violation. The officer making a
29.30 sale, after deducting the expense of keeping the property, the
29.31 fee for seizure, and the costs of the sale, shall pay all liens
29.32 according to their priority, which are established at the
29.33 hearing as being bona fide and as existing without the lienor
29.34 having any notice or knowledge that the property was being used
29.35 or was intended to be used for or in connection with the
29.36 violation specified in the order of the court, and shall pay the
30.1 balance of the proceeds to the seizing authority for official
30.2 use and sharing in the manner provided in paragraph (a). A sale
30.3 under this section frees the property from all liens on it.
30.4 Appeal from the order of the district is available as in other
30.5 civil cases.
30.6 (e) At any time after seizure of the articles specified in
30.7 this subdivision, and before the hearing provided for, the
30.8 property must be returned to the owner or person having a legal
30.9 right to its possession, upon execution of a good and valid bond
30.10 to the state, with corporate surety, in the sum of at least $100
30.11 and not more than double of the value of the property seized, to
30.12 be approved by the court in which the case is triable, or a
30.13 judge of it, conditioned to abide any order and the judgment of
30.14 the court, and to pay the full value of the property at the time
30.15 of the seizure. The seizing authority may dismiss the
30.16 proceedings outlined in this subdivision when the seizing
30.17 authority considers it in the public interest to do so.
30.18 Sec. 21. [297G.21] [ADMINISTRATIVE REVIEW.]
30.19 Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] A
30.20 taxpayer may obtain reconsideration by the commissioner of an
30.21 order assessing any tax imposed by this chapter, a denial of a
30.22 request for abatement of penalty, or a denial of a claim for
30.23 refund by filing an administrative appeal under subdivision 3.
30.24 A taxpayer cannot obtain reconsideration under this section if
30.25 the action taken by the commissioner is the outcome of an
30.26 administrative appeal.
30.27 Subd. 2. [NOTICE DATE.] For purposes of this section, the
30.28 term "notice date" means the date of the order adjusting the tax
30.29 or order denying a request for abatement, or, in the case of a
30.30 denied refund, the date of the notice of denial.
30.31 Subd. 3. [TIME AND CONTENT FOR ADMINISTRATIVE APPEAL.]
30.32 Within 60 days after the notice date, the taxpayer must file a
30.33 written appeal with the commissioner. The appeal need not be in
30.34 any particular form but must contain the following information:
30.35 (1) the name and address of the taxpayer;
30.36 (2) if a corporation, the state of incorporation of the
31.1 taxpayer, and the principal place of business of the
31.2 corporation;
31.3 (3) the Minnesota identification number or social security
31.4 number of the taxpayer;
31.5 (4) the type of tax involved;
31.6 (5) the date;
31.7 (6) the tax years or periods involved and the amount of tax
31.8 involved for each year or period;
31.9 (7) the findings in the notice that the taxpayer disputes;
31.10 (8) a summary statement that the taxpayer relies on for
31.11 each exception; and
31.12 (9) the taxpayer's signature or signature of the taxpayer's
31.13 duly authorized agent.
31.14 Subd. 4. [EXTENSIONS.] When requested in writing and
31.15 within the time allowed for filing an administrative appeal, the
31.16 commissioner may extend the time for filing an appeal for a
31.17 period of not more than 30 days from the expiration of the 60
31.18 days from the notice date.
31.19 Subd. 5. [DETERMINATION OF APPEAL.] On the basis of
31.20 applicable law and available information, the commissioner shall
31.21 determine the validity, if any, in whole or part of the appeal
31.22 and notify the taxpayer of the decision. This notice must be in
31.23 writing and contain the basis for the determination.
31.24 Subd. 6. [AGREEMENT DETERMINING TAX LIABILITY.] When it
31.25 appears to be in the best interests of the state, the
31.26 commissioner may settle any taxes, penalties, or interest that
31.27 the commissioner has under consideration by virtue of an appeal
31.28 filed under this section. An agreement must be in writing and
31.29 signed by the commissioner and the taxpayer, or the taxpayer's
31.30 representative authorized by the taxpayer to enter into an
31.31 agreement. The agreement must be filed in the office of the
31.32 commissioner.
31.33 Subd. 7. [APPEAL OF AN ADMINISTRATIVE DETERMINATION.]
31.34 Following the determination or settlement of an appeal and
31.35 notwithstanding any period of limitations for making assessments
31.36 or other determinations to the contrary, the commissioner shall
32.1 issue an order reflecting that disposition. If the statute of
32.2 limitations for making assessments or other determinations would
32.3 have expired before the issuance of this order, except for this
32.4 section, the order is limited to issues or matters contained in
32.5 the appealed determination. Except in the case of an agreement
32.6 determining tax under this section, the order is appealable to
32.7 the Minnesota tax court under section 271.06.
32.8 Subd. 8. [APPEAL WHERE NO DETERMINATION.] If the
32.9 commissioner does not make a determination within six months of
32.10 the filing of an administrative appeal, the taxpayer may elect
32.11 to appeal to tax court.
32.12 Subd. 9. [INAPPLICABILITY OF ADMINISTRATIVE PROCEDURE
32.13 ACT.] An appeal under this section is not a contested case
32.14 governed by chapter 14.
32.15 Sec. 22. [297G.22] [JUDICIAL REVIEW.]
32.16 In lieu of an administrative appeal under this chapter, a
32.17 person aggrieved by an order of the commissioner fixing a tax,
32.18 penalty, or interest under this chapter may, within 60 days from
32.19 the date of the notice of the order, appeal to the tax court in
32.20 the manner provided under section 271.06.
32.21 Sec. 23. [PURPOSE.]
32.22 It is the intent of the legislature to simplify Minnesota's
32.23 liquor tax laws by consolidating and recodifying tax
32.24 administration and compliance provisions now contained
32.25 throughout Minnesota Statutes, chapter 297C. Due to the
32.26 complexity of the recodification, prior provisions are repealed
32.27 on the effective date of the new provisions. The repealed
32.28 provisions, however, continue to remain in effect until
32.29 superseded by the analogous provision in the new law.
32.30 Sec. 24. [REPEALER.]
32.31 Minnesota Statutes 1996, sections 297C.01; 297C.02;
32.32 297C.03; 297C.04; 297C.045; 297C.05; 297C.06; 297C.07; 297C.08;
32.33 297C.09; 297C.10; 297C.11; 297C.12; 297C.13; 297C.14; 297C.16;
32.34 and 297C.17, are repealed.
32.35 Sec. 25. [EFFECTIVE DATE.]
32.36 Sections 1 and 23 are effective the day following final
33.1 enactment. Sections 2 to 12, 18, 21, and 22 are effective for
33.2 returns, reports, taxes, or other payments first becoming due on
33.3 or after August 1, 1997. Sections 13, 20, and 24 are effective
33.4 August 1, 1997. Sections 14 and 15 are effective for audits or
33.5 investigations initiated on or after August 1, 1997. Section 16
33.6 is effective for returns becoming due on or after August 1,
33.7 1997. Section 17 is effective for interest on amounts first
33.8 becoming due to the commissioner on or after August 1, 1997.
33.9 Section 19 is effective for crimes committed on or after August
33.10 1, 1997.
33.11 ARTICLE 2
33.12 TECHNICAL CHANGES
33.13 Section 1. Minnesota Statutes 1996, section 16A.26, is
33.14 amended to read:
33.15 16A.26 [ONE DEPOSITORY ACCOUNT FOR EACH TAX.]
33.16 Notwithstanding sections 297.13, 298.17, 298.282, 298.39,
33.17 298.396, 297C.02 to 297C.08 297G.10, and similar laws to the
33.18 contrary relating to the depositing, disposition, or
33.19 apportionment of tax receipts, the commissioner may use one
33.20 depository account for each tax. To do so, there must be enough
33.21 information to identify and dispose of or apportion the tax
33.22 under law. The commissioner shall ask the appropriate officials
33.23 for the transfers and necessary certifications. The
33.24 commissioner may issue directives to carry out this section.
33.25 Sec. 2. Minnesota Statutes 1996, section 340A.301,
33.26 subdivision 8, is amended to read:
33.27 Subd. 8. [SALES WITHOUT LICENSE.] A licensed brewer may
33.28 without an additional license sell malt liquor to employees or
33.29 retired former employees, in amounts of not more than 768 fluid
33.30 ounces in a week for off-premise consumption only. A collector
33.31 of commemorative bottles, those terms are as defined in
33.32 section 297C.01 297G.01, subdivisions 4 and 5, may sell them to
33.33 another collector without a license. It is also lawful for a
33.34 collector of beer cans to sell unopened cans of a brand which
33.35 has not been sold commercially for at least two years to another
33.36 collector without obtaining a license. The amount sold to any
34.1 one collector in any one month shall not exceed 768 fluid
34.2 ounces. A licensed manufacturer of wine containing not more than
34.3 25 percent alcohol by volume nor less than 51 percent wine made
34.4 from Minnesota-grown agricultural products may sell at on-sale
34.5 or off-sale wine made on the licensed premises without a further
34.6 license.
34.7 Sec. 3. Minnesota Statutes 1996, section 340A.302,
34.8 subdivision 1, is amended to read:
34.9 Subdivision 1. [LICENSES REQUIRED.] Except as provided in
34.10 sections 297C.09 297G.07, subdivision 2, and 340A.301,
34.11 subdivision 1, no retailer or other person may ship or cause to
34.12 be shipped alcoholic beverages or ethyl alcohol for personal use
34.13 or to a licensed manufacturer or wholesaler without obtaining an
34.14 importer's license from the commissioner.
34.15 Sec. 4. Minnesota Statutes 1996, section 340A.414,
34.16 subdivision 7, is amended to read:
34.17 Subd. 7. [INSPECTION.] An establishment holding a permit
34.18 under this section is open for inspection by the commissioner
34.19 and the commissioner's representative and by peace officers, who
34.20 may enter and inspect during reasonable hours. Intoxicating
34.21 liquor sold, served, or displayed in violation of law may be
34.22 seized and may be disposed of under section 297C.12 297G.20.
34.23 Sec. 5. Minnesota Statutes 1996, section 340A.417, is
34.24 amended to read:
34.25 340A.417 [SHIPMENTS INTO MINNESOTA.]
34.26 (a) Notwithstanding section 297C.09 297G.07, subdivision 2,
34.27 or any provision of this chapter, a winery licensed in a state
34.28 which affords Minnesota wineries an equal reciprocal shipping
34.29 privilege may ship, for personal use and not for resale, not
34.30 more than two cases of wine, containing a maximum of nine liters
34.31 per case, in any calendar year to any resident of Minnesota age
34.32 21 or over. Delivery of a shipment under this section may not
34.33 be deemed a sale in this state.
34.34 (b) The shipping container of any wine sent into or out of
34.35 Minnesota under this section must be clearly labeled to indicate
34.36 that the package cannot be delivered to a person under the age
35.1 of 21 years.
35.2 (c) No person may (1) advertise shipments authorized under
35.3 this section, or (2) by advertisement or otherwise, solicit
35.4 shipments authorized by this section. No shipper located
35.5 outside Minnesota may advertise such interstate reciprocal wine
35.6 shipments in Minnesota.
35.7 (d) It is not the intent of this section to impair the
35.8 distribution of wine through distributors or importing
35.9 distributors, but only to permit shipments of wine for personal
35.10 use.
35.11 Sec. 6. Minnesota Statutes 1996, section 340A.7035, is
35.12 amended to read:
35.13 340A.7035 [CONSUMER IMPORTATION; ILLEGAL ACTS.]
35.14 A person who enters Minnesota from another state and who
35.15 imports or possesses alcoholic beverages in excess of the
35.16 tax-exempt quantities provided for in section 297C.07,
35.17 paragraphs (10), (11), and (12), 297G.07, subdivision 2,
35.18 paragraphs (a), (b), and (c), is guilty of a misdemeanor. A
35.19 person who enters Minnesota from a foreign country who imports
35.20 or possesses alcoholic beverages on which the excise tax imposed
35.21 by sections 297C.02 and 297C.09 chapter 297G has not been paid,
35.22 other than the tax-exempt quantities provided for in
35.23 section 297C.07, paragraphs (10), (11), and (12), 297G.07,
35.24 subdivision 2, paragraphs (a), (b), and (c), is guilty of a
35.25 misdemeanor. A peace officer, the commissioner of public
35.26 safety, and employees designated by the commissioner of public
35.27 safety may seize alcoholic beverages imported or possessed in
35.28 violation of this section. This section does not apply to the
35.29 consignments of alcoholic beverages shipped into this state by
35.30 holders of Minnesota import licenses or Minnesota manufacturers
35.31 and wholesalers when licensed by the commissioner of public
35.32 safety or to common carriers with licenses to sell alcoholic
35.33 beverages in more than one state when licensed by the
35.34 commissioner of public safety to sell alcoholic beverages in
35.35 this state.
35.36 Sec. 7. [EFFECTIVE DATE.]
36.1 Sections 1 to 6 are effective August 1, 1997.