Minnesota Legislature
SF 472
as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to taxation; recodifying sales taxes on 1.3 cigarettes and tobacco products; providing criminal 1.4 and civil penalties; appropriating money; amending 1.5 Minnesota Statutes 1996, sections 16A.26; 16A.661, 1.6 subdivision 3; 16A.6701, subdivision 1; 116P.13, 1.7 subdivision 1; 325D.32, subdivision 4; and 325D.415; 1.8 proposing coding for new law as Minnesota Statutes, 1.9 chapter 297F; repealing Minnesota Statutes 1996, 1.10 sections 297.01; 297.02; 297.03; 297.031; 297.032; 1.11 297.04; 297.041; 297.05; 297.06; 297.07; 297.075; 1.12 297.08; 297.09; 297.10; 297.11; 297.12; 297.13; 1.13 297.21; 297.22; 297.23; 297.24; 297.25; 297.26; 1.14 297.31; 297.32; 297.321; 297.33; 297.335; 297.34; 1.15 297.35; 297.36; 297.37; 297.38; 297.385; 297.39; 1.16 297.40; 297.41; 297.42; 297.43; and 297.44. 1.17 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.18 ARTICLE 1 1.19 RECODIFICATION 1.20 Section 1. [297F.01] [DEFINITIONS.] 1.21 Subdivision 1. [APPLICABILITY.] Unless the language or 1.22 context clearly indicates that a different meaning is intended, 1.23 the following terms for the purposes of this chapter, have the 1.24 following meanings. 1.25 Subd. 2. [BUSINESS.] "Business" means any trade, 1.26 occupation, activity, or enterprise engaged in selling or 1.27 distributing cigarettes or tobacco products in this state. 1.28 Subd. 3. [CIGARETTE.] "Cigarette" means any roll for 1.29 smoking made wholly or in part of tobacco, the wrapper or cover 1.30 of which is made of paper or another substance or material 1.31 except tobacco. 2.1 Subd. 4. [CIGARETTE DISTRIBUTOR.] "Cigarette distributor" 2.2 means any of the following: 2.3 (1) a person engaged in the business of selling cigarettes 2.4 in this state and who manufactures or who brings, or causes to 2.5 be brought, into this state from outside the state any packages 2.6 of cigarettes for sale to subjobbers or retailers; 2.7 (2) a person engaged in the business outside this state who 2.8 ships or transports cigarettes to retailers in this state, to be 2.9 sold by those retailers; 2.10 (3) a person who is on direct purchase from a cigarette 2.11 manufacturer and applies cigarette stamps on at least 50 percent 2.12 of cigarettes sold by that person. 2.13 Subd. 5. [CIGARETTE SUBJOBBER.] "Cigarette subjobber" 2.14 means any person who acquires stamped cigarettes or other 2.15 state's stamped cigarettes for the primary purpose of resale to 2.16 retailers, and any licensed distributor who delivers, sells, or 2.17 distributes stamped cigarettes from a place of business other 2.18 than that licensed in the distributor's license. 2.19 "Cigarette subjobber" also means a person who is a vending 2.20 machine operator. A vending machine operator is a person whose 2.21 principal business is operating, or owning and leasing to 2.22 operators, machines for the vending of merchandise or service. 2.23 Subd. 6. [COMMISSIONER.] "Commissioner" means the state 2.24 commissioner of revenue. 2.25 Subd. 7. [CONSUMER.] "Consumer" means any person who has 2.26 title to or possession of cigarettes or tobacco products in 2.27 storage, for use or other consumption in this state. 2.28 Subd. 8. [INTERNAL REVENUE CODE.] Unless specifically 2.29 defined otherwise, "Internal Revenue Code" means the Internal 2.30 Revenue Code of 1986, as amended through December 31, 1996. 2.31 Subd. 9. [LICENSING PERIOD.] "Licensing period" means a 2.32 two-year period during which licenses are issued. A licensing 2.33 period begins on January 1 of each even-numbered year and ends 2.34 on December 31 of the following odd-numbered year. 2.35 Subd. 10. [MANUFACTURER.] "Manufacturer" means a person 2.36 who produces and sells cigarettes or tobacco products. 3.1 Subd. 11. [PACKAGE.] "Package" means the individual 3.2 packet, box, or other container used to contain and convey 3.3 cigarettes to the consumer. 3.4 Subd. 12. [PERSON.] "Person" means an individual or any 3.5 entity engaged in the sale of cigarettes or tobacco products. 3.6 Subd. 13. [PLACE OF BUSINESS.] "Place of business" means a 3.7 place where cigarettes or tobacco products are sold or where 3.8 cigarettes or tobacco products are manufactured, stored, or kept 3.9 for the purpose of sale or consumption, including any vessel, 3.10 vehicle, airplane, train, or vending machine. 3.11 Subd. 14. [RETAILER.] "Retailer" means a person engaged in 3.12 this state in the business of selling, or offering to sell, 3.13 cigarettes or tobacco products to consumers. 3.14 Subd. 15. [RETAIL OUTLET.] "Retail outlet" means each 3.15 place of business from which cigarettes or tobacco products are 3.16 sold to consumers. 3.17 Subd. 16. [SALE.] "Sale" means a transfer, exchange, or 3.18 barter, in any manner or by any means, for consideration, and 3.19 includes all sales made by any person. It also includes gifts 3.20 or samples provided for advertising or promotional purposes, 3.21 made by a person engaged in the selling of cigarettes or tobacco 3.22 products. 3.23 Subd. 17. [STAMP.] "Stamp" means the adhesive stamp 3.24 supplied by the commissioner of revenue for use on cigarette 3.25 packages. 3.26 Subd. 18. [STORAGE.] "Storage" means any keeping or 3.27 retention of cigarettes or tobacco products for use or 3.28 consumption in this state. 3.29 Subd. 19. [TOBACCO PRODUCTS.] "Tobacco products" means 3.30 cigars; little cigars; cheroots; stogies; periques; granulated, 3.31 plug cut, crimp cut, ready rubbed, and other smoking tobacco; 3.32 snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut 3.33 and other chewing tobacco; shorts; refuse scraps, clippings, 3.34 cuttings and sweepings of tobacco, and other kinds and forms of 3.35 tobacco, prepared in such manner as to be suitable for chewing 3.36 or smoking in a pipe or otherwise, or both for chewing and 4.1 smoking; but does not include cigarettes as defined in this 4.2 section. 4.3 Subd. 20. [TOBACCO PRODUCTS DISTRIBUTOR.] "Tobacco 4.4 products distributor" means any of the following: 4.5 (1) a person engaged in the business of selling tobacco 4.6 products in this state who brings, or causes to be brought, into 4.7 this state from outside the state any tobacco products for sale; 4.8 (2) a person who makes, manufactures, or fabricates tobacco 4.9 products in this state for sale in this state; 4.10 (3) a person engaged in the business of selling tobacco 4.11 products outside this state who ships or transports tobacco 4.12 products to retailers in this state, to be sold by those 4.13 retailers. 4.14 Subd. 21. [TOBACCO PRODUCTS SUBJOBBER.] "Tobacco products 4.15 subjobber" means a person, other than a manufacturer or 4.16 distributor, who buys from a distributor tobacco products upon 4.17 which the tax imposed by this chapter has been paid and sells 4.18 them to persons other than the ultimate consumers, and any 4.19 licensed distributor who delivers, sells, or distributes tobacco 4.20 products upon which the tax imposed by this chapter has been 4.21 paid from a place of business other than that licensed in the 4.22 distributor's license. 4.23 Subd. 22. [USE.] "Use" means the exercise of a right or 4.24 power incidental to the ownership of cigarettes or tobacco 4.25 products. 4.26 Subd. 23. [WHOLESALE PRICE.] "Wholesale price" means the 4.27 established price for which a manufacturer sells a tobacco 4.28 product to a distributor, exclusive of any discount or other 4.29 reduction. 4.30 Sec. 2. [297F.02] [ADMINISTRATION.] 4.31 Subdivision 1. [DUTIES OF COMMISSIONER.] The commissioner 4.32 shall enforce the provisions of this chapter and may prescribe 4.33 rules consistent with the provisions of this chapter for its 4.34 detailed and efficient administration. 4.35 In the enforcement of this chapter, the commissioner may 4.36 call any county attorney or any peace officer for assistance and 5.1 may appoint such additional employees as may be required to 5.2 administer this chapter. The commissioner may bring injunction 5.3 proceedings to restrain any person from acting as a distributor 5.4 without complying with the provisions of this chapter. 5.5 Subd. 2. [POWERS OF COMMISSIONER.] The commissioner, or 5.6 duly authorized agents, may conduct investigations, inquiries, 5.7 and hearings under this chapter and, in connection with such 5.8 investigations, inquiries, and hearings, the commissioner and 5.9 the duly authorized agents shall have all the powers conferred 5.10 upon the commissioner and the commissioner's examiners by 5.11 section 270.06, and the provisions of that section shall apply 5.12 to all such investigations, inquiries, and hearings. 5.13 Subd. 3. [EXPENSES OF ADMINISTRATION.] Expenses for the 5.14 administration of this chapter shall be paid out of 5.15 appropriations to the commissioner for the administration of 5.16 this chapter and shall include fees and expenses incurred by the 5.17 attorney general and any county attorney in litigation in 5.18 connection with the enforcement of this chapter. Expenses also 5.19 include all court costs and expenses. 5.20 Sec. 3. [297F.03] [LICENSES; CIGARETTE AND TOBACCO 5.21 PRODUCTS DISTRIBUTOR AND SUBJOBBER.] 5.22 Subdivision 1. [SELLING WITHOUT LICENSE ILLEGAL.] No 5.23 person shall engage in the business of a distributor or 5.24 subjobber at any place of business without first having received 5.25 a license from the commissioner to engage in that business at 5.26 that place of business. 5.27 Subd. 2. [FORM OF APPLICATION.] Every application for a 5.28 cigarette or tobacco products license shall be made on a form 5.29 prescribed by the commissioner and shall state the name and 5.30 address of the applicant; if the applicant is a firm, 5.31 partnership, or association, the name and address of each of its 5.32 members; if the applicant is a corporation, the name and address 5.33 of each of its officers; the address of its principal place of 5.34 business; the place where the business to be licensed is to be 5.35 conducted; and any other information the commissioner may 5.36 require for the administration of this chapter. 6.1 Subd. 3. [PLACE OF APPLICATION.] A separate application 6.2 for a distributor's license shall be made for each place of 6.3 business at which a distributor proposes to engage in business. 6.4 A separate application for a subjobber's license may be 6.5 made by a licensed distributor for each place of business, other 6.6 than that licensed in the distributor's license, to which the 6.7 distributor sells or distributes stamped cigarettes or tobacco 6.8 products. 6.9 Subd. 4. [NONRESIDENT APPLICATION.] A person outside this 6.10 state who ships or transports cigarettes or tobacco products to 6.11 retailers in this state, to be sold by those retailers, shall 6.12 make an application for a distributor's license, be granted such 6.13 a license by the commissioner, and thereafter be subject to all 6.14 the provisions of this chapter. 6.15 Subd. 5. [LICENSE FEES; CIGARETTES.] Each application for 6.16 a cigarette distributor's license must be accompanied by a fee 6.17 of $300. Each application for a cigarette subjobber's license 6.18 must be accompanied by a fee of $24. A distributor or subjobber 6.19 applying for a license during the second year of a two-year 6.20 licensing period is required to pay only one-half of the license 6.21 fee. 6.22 Subd. 6. [LICENSE FEES; TOBACCO PRODUCTS.] Each 6.23 application for a tobacco products distributor's license must be 6.24 accompanied by a fee of $75. Each application for a tobacco 6.25 products subjobber's license must be accompanied by a fee of 6.26 $20. A distributor or subjobber applying for a license during 6.27 the second year of a two-year licensing period is required to 6.28 pay only one-half of the license fee. 6.29 Subd. 7. [ISSUANCE OF LICENSE.] The commissioner, upon 6.30 receipt of the application in proper form, and payment of the 6.31 license fee required by this chapter, shall, unless otherwise 6.32 provided by this chapter, issue the applicant a license in the 6.33 form prescribed by the commissioner. The license permits the 6.34 applicant to engage in business as a distributor or subjobber at 6.35 the place of business shown in the application. 6.36 Subd. 8. [LICENSING PERIOD; EXPIRATION.] The licensing 7.1 period begins January 1 of an even-numbered year and ends on 7.2 December 31 of the following year. Each license issued shall 7.3 expire on December 31 of the second year of the licensing period 7.4 unless sooner revoked by the commissioner or unless the business 7.5 with respect to which the license was issued is transferred. In 7.6 either case the holder of the license shall immediately 7.7 surrender it to the commissioner. 7.8 Subd. 9. [DISPLAY.] Each license must be prominently 7.9 displayed on the premises covered by the license. 7.10 Subd. 10. [TRANSFER.] Licenses are not transferable to any 7.11 other person. 7.12 Sec. 4. [297F.04] [LICENSE SUSPENSION OR REVOCATION.] 7.13 Subdivision 1. [POWERS OF COMMISSIONER.] The commissioner 7.14 may revoke or suspend the license or licenses of any distributor 7.15 or subjobber for violation of this chapter, any other act 7.16 applicable to the sale of cigarettes or tobacco products, or any 7.17 rule promulgated by the commissioner, in furtherance of this 7.18 chapter. The commissioner may also revoke, cancel, or suspend 7.19 the license or licenses of any distributor or subjobber for 7.20 violation of sections 325D.30 to 325D.42. 7.21 Subd. 2. [REFUSAL TO ISSUE OR RENEW; REVOCATION.] The 7.22 commissioner must not issue or renew a license under this 7.23 chapter, and may revoke a license under this chapter, if the 7.24 applicant or licensee: 7.25 (1) owes $500 or more in delinquent taxes as defined in 7.26 section 270.72, subdivision 2; 7.27 (2) after demand, has not filed tax returns required by the 7.28 commissioner; 7.29 (3) had a cigarette or tobacco license revoked by the 7.30 commissioner within the past two years; 7.31 (4) had a sales and use tax permit revoked by the 7.32 commissioner within the past two years; or 7.33 (5) has been convicted of a crime involving cigarettes, 7.34 including but not limited to: selling stolen cigarettes or 7.35 tobacco products, receiving stolen cigarettes or tobacco 7.36 products, or involvement in the smuggling of cigarettes or 8.1 tobacco products. 8.2 Subd. 3. [NOTICE.] No license may be revoked or suspended 8.3 under this chapter, and no application for a license may be 8.4 denied under this chapter, except after 20 days' notice. In 8.5 that notice the commissioner shall specify the allegations 8.6 against the licensee or applicant, and provide the licensee or 8.7 applicant the right to request in writing within 20 days a 8.8 contested case hearing as provided in chapter 14. 8.9 If a written request for a hearing is received by the 8.10 department of revenue within 20 days of the date of the initial 8.11 notice, the hearing must be held within 45 days after referral 8.12 to the office of administrative hearings, and no earlier than 20 8.13 days after notice to the licensee or applicant of the hearing 8.14 time and place. A license is revoked or suspended, and an 8.15 application is denied, when the commissioner serves notice of 8.16 revocation, suspension, or denial after 20 days have passed 8.17 following the initial notice under this paragraph without a 8.18 request for hearing being made, or if a hearing is held, after 8.19 the commissioner serves an order of revocation, suspension, or 8.20 denial under section 14.62, subdivision 1. All notices under 8.21 this paragraph may be served personally or by mail. 8.22 Sec. 5. [297F.05] [RATES OF TAX; PERSONAL DEBT.] 8.23 Subdivision 1. [RATES; CIGARETTES.] A tax is imposed upon 8.24 the sale of cigarettes in this state, upon having cigarettes in 8.25 possession in this state with intent to sell, upon any person 8.26 engaged in business as a distributor, and upon the use or 8.27 storage by consumers, at the following rates, subject to the 8.28 discount provided in this chapter: 8.29 (1) on cigarettes weighing not more than three pounds per 8.30 thousand, 24 mills on each such cigarette; and 8.31 (2) on cigarettes weighting more than three pounds per 8.32 thousand, 48 mills on each such cigarette. 8.33 Subd. 2. [DISTRIBUTION OF FREE SAMPLE PACKAGES.] A person 8.34 who distributes free packages of cigarettes is liable for the 8.35 payment of tax under this chapter. 8.36 Subd. 3. [RATES; TOBACCO PRODUCTS.] A tax is imposed upon 9.1 all tobacco products in this state and upon any person engaged 9.2 in business as a distributor, at the rate of 35 percent of the 9.3 wholesale sales price of the tobacco products. The tax is 9.4 imposed at the time the distributor: 9.5 (1) brings, or causes to be brought, into this state from 9.6 outside the state tobacco products for sale; 9.7 (2) makes, manufactures, or fabricates tobacco products in 9.8 this state for sale in this state; or 9.9 (3) ships or transports tobacco products to retailers in 9.10 this state, to be sold by those retailers. 9.11 Subd. 4. [USE TAX; TOBACCO PRODUCTS.] A tax is imposed 9.12 upon the use or storage by consumers of tobacco products in this 9.13 state, and upon such consumers, at the rate of 35 percent of the 9.14 cost to the consumer of the tobacco products. 9.15 Subd. 5. [TAX AS PERSONAL DEBT.] The tax imposed by this 9.16 chapter, and interest and penalties imposed with respect to it, 9.17 is a personal debt of the person required to file a return from 9.18 the time the liability for it arises, regardless of when the 9.19 time for payment of the liability occurs. In the case of the 9.20 executor or administrator of the estate of a decedent and in the 9.21 case of any fiduciary, the debt is that of the person in the 9.22 person's official or fiduciary capacity only, unless the person 9.23 has voluntarily distributed the assets held in that capacity 9.24 without reserving sufficient assets to pay the tax, interest, 9.25 and penalties. In that case, the person is personally liable 9.26 for the deficiency. 9.27 Subd. 6. [TAX CONSTRUCTION.] The tax imposed by this 9.28 section is not a cost of doing business or an overhead expense 9.29 under section 325D.01, subdivision 7. 9.30 Subd. 7. [TAX; SALES BY STATE.] The state of Minnesota or 9.31 any of its agencies, instrumentalities, or governmental 9.32 subdivisions is subject to the tax imposed by this chapter on 9.33 all cigarettes or tobacco products sold, in the same manner as 9.34 distributors, if such unit is engaged in the purchase and sale 9.35 of cigarettes or tobacco products. 9.36 Sec. 6. [297F.06] [EXEMPTIONS FROM TAX.] 10.1 Subdivision 1. [FEDERAL LAWS.] The tax imposed by this 10.2 section does not apply with respect to any sale of cigarettes or 10.3 tobacco products which under the constitution and laws of the 10.4 United States may not be subject to taxation by the state. 10.5 Subd. 2. [USE TAX.] The use tax does not apply if the tax 10.6 imposed on cigarettes or tobacco products has been paid. 10.7 Subd. 3. [CIGARETTE USE TAX.] The cigarette use tax does 10.8 not apply to the use or storage of cigarettes in quantities of 10.9 200 or fewer in the possession of any one consumer, provided 10.10 that the cigarettes were carried into this state by that 10.11 consumer. 10.12 Subd. 4. [TOBACCO PRODUCTS USE TAX.] The tobacco products 10.13 use tax does not apply to the use or storage of tobacco products 10.14 in quantities of: 10.15 (1) not more than 50 cigars; 10.16 (2) not more than ten ounces snuff or snuff powder; 10.17 (3) not more than one pound smoking or chewing tobacco or 10.18 any other tobacco product in the possession of any one consumer. 10.19 Subd. 5. [OCEAN-GOING VESSELS.] The commissioner may adopt 10.20 rules for the sale by licensed distributors of tax free 10.21 cigarettes to the masters of ocean-going vessels for use aboard 10.22 ship outside the continental limits of the United States, 10.23 provided the cigarettes are also exempt from the taxes imposed 10.24 on cigarettes by the United States government. 10.25 Sec. 7. [297F.07] [SALES TO INDIAN TRIBES.] 10.26 Subdivision 1. [WHOLESALERS.] A wholesaler may set aside 10.27 stock necessary to make sales to a qualified Indian retailer 10.28 without paying the tax required by this chapter. The untaxed 10.29 stock shall be kept separate and apart from taxed stock. 10.30 Subd. 2. [QUALIFIED INDIAN RETAILER.] A qualified Indian 10.31 retailer is the tribal government of a federally recognized 10.32 Indian tribe or any retail establishment located on a federally 10.33 recognized Indian reservation which is authorized to sell 10.34 cigarettes or tobacco products on that reservation. A qualified 10.35 Indian retailer may keep untaxed cigarettes or tobacco products 10.36 in quantities reasonably necessary to meet the estimated 11.1 personal consumption needs of qualified purchasers. 11.2 Subd. 3. [QUALIFIED PURCHASERS.] A qualified purchaser of 11.3 untaxed cigarettes or tobacco products means an enrolled member 11.4 of the reservation on which the cigarettes or tobacco products 11.5 are being offered for sale. 11.6 Subd. 4. [QUANTITY OF UNTAXED CIGARETTES OR TOBACCO 11.7 PRODUCTS ALLOWED TO BE DELIVERED ONTO A RESERVATION.] (a) The 11.8 aggregate quantity of untaxed cigarettes or tobacco products 11.9 that can be delivered onto a reservation is limited to an amount 11.10 reasonably necessary to meet the personal consumption needs of 11.11 qualified purchasers. This amount is presumed to be an amount 11.12 equal to the average statewide per capita consumption of 11.13 cigarettes or tobacco products times the number of qualified 11.14 purchasers. A tribal government, qualified Indian retailer, or 11.15 wholesaler may request that greater quantities of untaxed 11.16 cigarettes or tobacco products be delivered onto the reservation 11.17 by presenting evidence of higher per capita consumption of 11.18 qualified purchasers on the reservation. The request must be 11.19 made through petition to the commissioner. 11.20 (b) Prior to shipping any untaxed cigarettes or tobacco 11.21 products to a qualified Indian retailer, the wholesaler shall 11.22 notify the commissioner. The commissioner shall promptly notify 11.23 the wholesaler of the quantity of untaxed cigarettes or tobacco 11.24 products that the wholesaler may deliver to the qualified Indian 11.25 retailer. 11.26 (c) If more than one wholesaler makes a request to deliver 11.27 untaxed cigarettes or tobacco products onto a reservation, the 11.28 commissioner shall allocate the aggregate amount of untaxed 11.29 cigarettes or tobacco products allowed to be delivered to 11.30 qualified Indian retailers on the reservation among the 11.31 competing wholesalers. The commissioner shall use location of 11.32 the outlets serviced by the wholesalers, the likely amount of 11.33 cigarettes purchased by qualified purchasers at those outlets, 11.34 the product mix of the competing wholesalers, and other 11.35 appropriate factors so that qualified purchasers will have a 11.36 reasonably convenient opportunity to exercise their right to 12.1 purchase untaxed cigarettes or tobacco products. The 12.2 commissioner may seek the opinion of the tribal government prior 12.3 to making an allocation. 12.4 (d) If there is more than one qualified Indian retailer who 12.5 wants to sell untaxed cigarettes or tobacco products on a 12.6 reservation, the commissioner shall allocate the aggregate 12.7 amount of untaxed cigarettes or tobacco products allowed to be 12.8 delivered to qualified Indian retailers on the reservation among 12.9 the competing qualified Indian retailers. The commissioner 12.10 shall use location of the qualified Indian retailers, the likely 12.11 amount of cigarettes or tobacco products purchased by qualified 12.12 purchasers from those retailers, the product mix of the 12.13 competing retailers, and other appropriate factors so that 12.14 qualified purchasers will have a reasonably convenient 12.15 opportunity to exercise their right to purchase untaxed 12.16 cigarettes or tobacco products. The commissioner may seek the 12.17 opinion of the tribal government prior to making an allocation. 12.18 Subd. 5. [RECORDKEEPING.] (a) When shipping or delivering 12.19 untaxed cigarettes or tobacco products to a qualified Indian 12.20 retailer, the wholesaler shall make an invoice which must show 12.21 the complete details of the sale or delivery. The wholesaler 12.22 must send a copy of the invoice to the commissioner not later 12.23 than the 18th day of the following calendar month. If the 12.24 wholesaler fails to comply with this section, the commissioner 12.25 shall revoke the permission granted to the wholesaler to keep a 12.26 stock of untaxed goods. 12.27 (b) A qualified Indian retailer must keep a log book of 12.28 exempt sales that contains the following information: 12.29 (1) date of sale; 12.30 (2) name and address of purchaser; 12.31 (3) quantity of cigarettes or tobacco products sold; 12.32 (4) total sales price; 12.33 (5) any other information necessary to substantiate the 12.34 exempt sale. This may include a properly completed exemption 12.35 certificate or other evidence of membership in the reservation 12.36 on which the sale occurs. 13.1 Qualified Indian retailers must retain required records of 13.2 exempt sales for 3-1/2 years. Upon written request, the 13.3 commissioner may inspect these records to the extent necessary 13.4 to verify compliance with the provisions of this section. If a 13.5 qualified Indian retailer does not provide to the commissioner 13.6 adequate proof of entitlement to exemption, the sale of 13.7 cigarettes or tobacco products is presumed to be a sale made to 13.8 a nonqualified purchaser. 13.9 Subd. 6. [SALES TO NONQUALIFIED PURCHASERS.] A qualified 13.10 Indian retailer who sells or otherwise disposes of untaxed 13.11 cigarettes or tobacco products other than to a qualified 13.12 purchaser shall collect from the purchaser or transferee the tax 13.13 imposed by this chapter and remit the tax to the department of 13.14 revenue on a form prescribed by the commissioner by the 18th day 13.15 on the month following the month of sale. If the retailer fails 13.16 to collect the tax from the purchaser or transferee, or fails to 13.17 remit the tax, the retailer is personally responsible for the 13.18 tax, and the commissioner may seize any cigarettes or tobacco 13.19 products destined to be delivered to the retailer. The 13.20 procedures for seized contraband outlined in section 297F.21, 13.21 subdivision 3, apply to the seized cigarettes or tobacco 13.22 products. The proceeds of the sale of the cigarettes or tobacco 13.23 products may be applied to any cigarette tax or tobacco product 13.24 tax liability owed by the retailer after deducting all costs and 13.25 expenses. 13.26 Nothing in this section relieves any person other than a 13.27 qualified purchaser or possessor of untaxed cigarettes or 13.28 tobacco products from personal liability for the tax. 13.29 Subd. 7. [TAX AGREEMENTS.] This section does not apply to 13.30 the sale or delivery of cigarettes or tobacco products to a 13.31 reservation that has entered into a tax agreement covering 13.32 cigarettes or tobacco products as authorized by section 270.60. 13.33 Sec. 8. [297F.08] [CIGARETTE STAMPS.] 13.34 Subdivision 1. [STAMP PUT ON BY DISTRIBUTOR.] Except as 13.35 otherwise provided in this chapter, payment of the tax imposed 13.36 by this chapter must be evidenced by stamps affixed to each 14.1 package. Before delivering, or causing to be delivered, a 14.2 package to any person in this state, a distributor shall firmly 14.3 affix to each package of cigarettes appropriate stamps in 14.4 amounts equal to the tax on those cigarettes as provided in this 14.5 chapter. 14.6 Subd. 2. [TAX DUE; CIGARETTES.] Notwithstanding any other 14.7 provisions of this chapter, the tax due on the return is based 14.8 upon actual heat-applied stamps purchased during the reporting 14.9 period. 14.10 Subd. 3. [TIME OF AFFIXING STAMP.] In all cases where 14.11 cigarettes are shipped into this state by any licensed 14.12 distributor from outside this state, the appropriate stamps must 14.13 be affixed to packages at the time the package enters the state. 14.14 Subd. 4. [STAMPS; DESIGN, PRINTING.] The commissioner 14.15 shall adopt the design of two stamps. One stamp must be 14.16 designed for application to cigarette packages destined for 14.17 retail sale on an Indian reservation which is a party to an 14.18 agreement under section 270.60, subdivision 2, and only to those 14.19 packages. A second stamp must be designed for all other 14.20 cigarette packages subject to the provisions of this chapter. 14.21 The commissioner shall arrange for the printing of stamps in 14.22 such amounts and denominations as the commissioner deems 14.23 necessary. 14.24 Subd. 5. [DEPOSIT OF PROCEEDS.] The commissioner shall use 14.25 the amounts appropriated by law to purchase heat-applied stamps 14.26 for resale. The commissioner shall charge the purchasers for 14.27 the costs of the stamps along with the tax value plus shipping 14.28 costs. The costs recovered along with shipping costs must be 14.29 deposited into the general fund. 14.30 Subd. 6. [SECTION 16A.56 SUPERSEDED.] The provisions of 14.31 this chapter prescribing the powers and duties of the 14.32 commissioner with relation to stamps supersede all the 14.33 provisions of section 16A.56 in conflict. 14.34 Subd. 7. [PRICE OF STAMPS.] The commissioner shall sell 14.35 stamps to any person licensed as a distributor at a discount of 14.36 1.0 percent from the face amount of the stamps for the first 15.1 $1,500,000 of such stamps purchased in any fiscal year; and at a 15.2 discount of 0.6 percent on the remainder of such stamps 15.3 purchased in any fiscal year. The commissioner shall not sell 15.4 stamps to any other person. The commissioner may prescribe the 15.5 method of shipment of the stamps to the distributor as well as 15.6 the quantities of stamps purchased. 15.7 Subd. 8. [SALE OF STAMPS.] The commissioner may sell 15.8 heat-applied stamps on a credit basis under conditions 15.9 prescribed by the commissioner. The commissioner shall sell the 15.10 stamps at a price which includes the tax after giving effect to 15.11 the discount provided in subdivision 7. The commissioner shall 15.12 recover the actual costs of the stamps from the distributor. 15.13 The commissioner shall annually establish the maximum amount of 15.14 heat-applied stamps that may be purchased each month. 15.15 Subd. 9. [TAX STAMPING MACHINES.] The commissioner shall 15.16 require any person licensed as a distributor to stamp packages 15.17 with a heat-applied tax stamping machine, approved by the 15.18 commissioner, which shall be provided by the distributor. The 15.19 commissioner shall also supervise and check the operation of the 15.20 machines and shall provide for the payment of the tax on any 15.21 package so stamped, subject to the discount provided in 15.22 subdivision 7. If the commissioner finds that a stamping 15.23 machine is not affixing a legible stamp on the package, the 15.24 commissioner may order the distributor to immediately cease the 15.25 stamping process until the machine is functioning properly. 15.26 Subd. 10. [RESALE OR TRANSFER OF STAMPS PROHIBITED.] No 15.27 distributor shall resell or transfer any stamps purchased by the 15.28 distributor from the commissioner. A distributor may transfer 15.29 another state's stamped cigarettes to another distributor for 15.30 the purpose of resale in the other state. A distributor who has 15.31 on hand any uncanceled stamps at the time of discontinuing the 15.32 business of selling cigarettes may return them to the 15.33 commissioner and receive a refund of the amount paid for the 15.34 stamps. Stamps which have become mutilated or unfit for use, or 15.35 are affixed to cigarettes being returned to the manufacturer, or 15.36 are affixed to packages which, or the contents of which, have 16.1 become damaged and unfit for sale, shall be replaced by the 16.2 commissioner, upon application by the distributor owning the 16.3 stamps or cigarettes if an investigation discloses that the 16.4 stamps have not evidenced a taxable transaction, after 16.5 compliance with rules or orders of the commissioner designed to 16.6 prevent use of the stamps replaced. 16.7 Subd. 11. [RAILROAD OR SLEEPING CAR COMPANY AS A 16.8 DISTRIBUTOR.] The commissioner may authorize a railroad or 16.9 sleeping car company licensed as a distributor to sell 16.10 cigarettes on its cars without affixing stamps to the packages, 16.11 provided that monthly reports and payments of the tax due 16.12 subject to the discount in subdivision 7 must be made directly 16.13 to the commissioner in the manner and under the terms provided 16.14 for by the commissioner. Only one distributor's license need be 16.15 obtained by each railroad or sleeping car company to permit it 16.16 to sell cigarettes on any or all of its cars within the state. 16.17 Sec. 9. [297F.09] [RETURNS; PAYMENT OF TAX.] 16.18 Subdivision 1. [MONTHLY RETURN; CIGARETTE DISTRIBUTOR.] On 16.19 or before the 18th day of each calendar month, a distributor 16.20 with a place of business in this state shall file a return with 16.21 the commissioner showing the quantity of cigarettes manufactured 16.22 or brought in from outside the state or purchased during the 16.23 preceding calendar month and the quantity of cigarettes sold or 16.24 otherwise disposed of in this state and outside this state 16.25 during that month. A licensed distributor outside this state 16.26 shall in like manner file a return showing the quantity of 16.27 cigarettes shipped or transported into this state during the 16.28 preceding calendar month. Returns must be made in the form and 16.29 manner prescribed by the commissioner and must contain any other 16.30 information required by the commissioner. The return must be 16.31 accompanied by a remittance for the full unpaid tax liability 16.32 shown by it. The return for the May liability and 75 percent of 16.33 the estimated June liability is due on the date payment of the 16.34 tax is due. 16.35 Subd. 2. [MONTHLY RETURN; TOBACCO PRODUCTS 16.36 DISTRIBUTOR.] On or before the 18th day of each calendar month, 17.1 a distributor with a place of business in this state shall file 17.2 a return with the commissioner showing the quantity and 17.3 wholesale sales price of each tobacco product: 17.4 (1) brought, or caused to be brought, into this state for 17.5 sale; and 17.6 (2) made, manufactured, or fabricated in this state for 17.7 sale in this state, during the preceding calendar month. 17.8 Every licensed distributor outside this state shall in like 17.9 manner file a return showing the quantity and wholesale sales 17.10 price of each tobacco product shipped or transported to 17.11 retailers in this state to be sold by those retailers, during 17.12 the preceding calendar month. Returns must be made in the form 17.13 and manner prescribed by the commissioner and must contain any 17.14 other information required by the commissioner. The return must 17.15 be accompanied by a remittance for the full tax liability shown, 17.16 less 1.5 percent of the liability as compensation to reimburse 17.17 the distributor for expenses incurred in the administration of 17.18 this chapter. The return for the May liability and 75 percent 17.19 of the estimated June liability is due on the date payment of 17.20 the tax is due. 17.21 Subd. 3. [USE TAX RETURN; CIGARETTE OR TOBACCO PRODUCTS 17.22 CONSUMER.] On or before the 18th day of each calendar month, a 17.23 consumer who, during the preceding calendar month, has acquired 17.24 title to or possession of cigarettes or tobacco products for use 17.25 or storage in this state, upon which cigarettes or tobacco 17.26 products the tax imposed by this chapter has not been paid, 17.27 shall file a return with the commissioner showing the quantity 17.28 of cigarettes or tobacco products so acquired. The return must 17.29 be made in the form and manner prescribed by the commissioner, 17.30 and must contain any other information required by the 17.31 commissioner. The return must be accompanied by a remittance 17.32 for the full unpaid tax liability shown by it. 17.33 Subd. 4. [TAX PROVISIONS APPLICABLE TO CONSUMERS.] All of 17.34 the provisions of this chapter relating to corrections of 17.35 returns, deficiency assessments, protests, hearings, interest 17.36 and penalties, and collection of taxes, apply to consumers. 18.1 Subd. 5. [EXTENSION OF TIME.] The commissioner may extend 18.2 the time for filing returns and remittance of tax, deficiencies, 18.3 and penalties for not more than 60 days. The commissioner may 18.4 require that a tentative return be filed at the time for filing 18.5 the regularly required return and that payment of the tax be 18.6 made with it on the basis of the tentative return. When an 18.7 extension of time for payment has been granted under this 18.8 section, interest is payable at the rate provided in section 18.9 270.75 from the date when the payment should have been made, if 18.10 no extension had been granted, until the tax is paid. 18.11 Subd. 6. [ACCELERATED TAX PAYMENT; CIGARETTE OR TOBACCO 18.12 PRODUCTS DISTRIBUTOR.] A cigarette or tobacco products 18.13 distributor having a liability of $120,000 or more during a 18.14 fiscal year ending June 30, shall remit the June liability for 18.15 the next year in the following manner: 18.16 (a) Two business days before June 30 of the year, the 18.17 distributor shall remit the actual May liability and 75 percent 18.18 of the estimated June liability to the commissioner and file the 18.19 return in the form and manner prescribed by the commissioner. 18.20 (b) On or before August 18 of the year, the distributor 18.21 shall submit a return showing the actual June liability and pay 18.22 any additional amount of tax not remitted in June. A penalty is 18.23 imposed equal to ten percent of the amount of June liability 18.24 required to be paid in June, less the amount remitted in June. 18.25 However, the penalty is not imposed if the amount remitted in 18.26 June equals the lesser of: 18.27 (1) 70 percent of the actual June liability; or 18.28 (2) 75 percent of the preceding May's liability. 18.29 Subd. 7. [ELECTRONIC FUNDS TRANSFER.] A cigarette or 18.30 tobacco products distributor having a liability of $120,000 or 18.31 more during a fiscal year ending June 30 must remit all 18.32 liabilities in the subsequent calendar year by means of a fund 18.33 transfer as defined in section 336.4A-104, paragraph (a). The 18.34 funds transfer payment date, as defined in section 336.4A-401, 18.35 must be on or before the date the tax is due. If the date the 18.36 tax is due is not a funds transfer business day, as defined in 19.1 section 336.4A-105, paragraph (a), clause (4), the payment date 19.2 must be on or before the funds transfer day immediately 19.3 following the date the tax is due. 19.4 Subd. 8. [ORDER PAYMENTS CREDITED.] All payments received 19.5 may, in the discretion of the commissioner, be credited first to 19.6 the oldest liability not secured by a judgment or lien, but in 19.7 all cases must be credited first to penalties, next to interest, 19.8 and then to the tax due. 19.9 Subd. 9. [INTEREST.] The amount of tax not timely paid, 19.10 together with any penalty imposed in this section, bears 19.11 interest at the rate specified in section 270.75 from the time 19.12 such tax should have been paid until paid. Any interest and 19.13 penalty is added to the tax and collected as a part of it. 19.14 Sec. 10. [297F.10] [DEPOSIT OF PROCEEDS.] 19.15 Subdivision 1. [TAX AND USE TAX ON CIGARETTES.] Revenue 19.16 received from cigarette taxes, as well as related penalties, 19.17 interest, license fees, and miscellaneous sources of revenue 19.18 shall be deposited by the commissioner in the state treasury and 19.19 credited as follows: 19.20 (a) first to the general obligation special tax bond debt 19.21 service account in each fiscal year the amount required to 19.22 increase the balance on hand in the account on each December 1 19.23 to an amount equal to the full amount of principal and interest 19.24 to come due on all outstanding bonds whose debt service is 19.25 payable primarily from the proceeds of the tax to and including 19.26 the second following July 1; and 19.27 (b) after the requirements of paragraph (a) have been met: 19.28 (1) the revenue produced by one mill of the tax on 19.29 cigarettes weighing not more than three pounds a thousand and 19.30 two mills of the tax on cigarettes weighing more than three 19.31 pounds a thousand must be credited to the Minnesota future 19.32 resources fund; and 19.33 (2) the balance of the revenues derived from taxes, 19.34 penalties, and interest (under this chapter) and from license 19.35 fees and miscellaneous sources of revenue shall be credited to 19.36 the general fund. 20.1 Subd. 2. [TAX AND USE TAX ON TOBACCO PRODUCTS.] Revenue 20.2 received from taxes on tobacco products, as well as related 20.3 penalties, interest, and license fees shall be deposited by the 20.4 commissioner in the state treasury and credited to the general 20.5 fund. 20.6 Sec. 11. [297F.11] [INFORMATIONAL REPORTS; CIGARETTES.] 20.7 Subdivision 1. [GENERAL RULE.] The following persons shall 20.8 file with the commissioner a monthly informational report in the 20.9 form and manner prescribed by the commissioner: 20.10 (1) a distributor licensed to ship cigarettes into 20.11 Minnesota; 20.12 (2) a person who manufactures cigarettes within the state; 20.13 (3) any other person who imports cigarettes into Minnesota; 20.14 and 20.15 (4) a person who possesses, receives, stores, or warehouses 20.16 cigarettes in Minnesota, upon which the tax imposed by this 20.17 chapter has not been paid. 20.18 The requirement of filing an informational report does not 20.19 apply to a person conveying or possessing cigarettes described 20.20 in this chapter, nor to any lawful manufacture of cigarettes 20.21 within the state for personal consumption. 20.22 Subd. 2. [FILING DATES; FAILURE TO FILE.] No payment of 20.23 any tax is required to be remitted with the report required 20.24 under subdivision 1. The report must be filed on or before the 20.25 tenth day following the end of each calendar month, regardless 20.26 of whether or not the person shipped, manufactured, possessed, 20.27 received, stored, or warehoused any cigarettes into or within 20.28 Minnesota during the previous month, unless the commissioner 20.29 determines that a longer filing period is appropriate for a 20.30 particular person. 20.31 Subd. 3. [COMMON CARRIERS.] Common carriers and contract 20.32 carriers transporting cigarettes into this state shall file with 20.33 the commissioner reports of all such shipments other than those 20.34 which are delivered to public warehouses of first destination in 20.35 this state, licensed under the provisions of chapter 231. The 20.36 reports must be filed monthly on or before the tenth day of each 21.1 month and must show with respect to deliveries made in the 21.2 preceding month: the date, point of origin, point of delivery, 21.3 name of consignee, the quantity of cigarettes delivered, and any 21.4 other information the commissioner requires. 21.5 A common carrier or a contract carrier transporting 21.6 cigarettes into Minnesota shall permit examination by the 21.7 commissioner of its records relating to the shipment of 21.8 cigarettes. 21.9 Subd. 4. [CIGARETTE CONSUMERS.] A person who files a 21.10 cigarette consumer return as required by this chapter may 21.11 fulfill the requirements of this section by indicating on the 21.12 cigarette consumer's return which of the items reported on the 21.13 return were transported into the state by the consumer. The 21.14 requirement of filing an informational report does not apply to 21.15 consumers who import fewer than 200 cigarettes into this state. 21.16 Sec. 12. [297F.12] [INFORMATIONAL REPORTS; TOBACCO 21.17 PRODUCTS.] 21.18 Subdivision 1. [GENERAL RULE.] The transportation of 21.19 tobacco products into this state by means other than common 21.20 carrier must be reported to the commissioner within 30 days with 21.21 the following exceptions: 21.22 (1) transportation of not more than 50 cigars, not more 21.23 then ten ounces of snuff or snuff powder, or not more than one 21.24 pound of smoking or chewing tobacco or other tobacco products 21.25 not specifically mentioned; 21.26 (2) transportation by a person with a place of business 21.27 outside the state, who is licensed as a distributor under this 21.28 chapter, of tobacco products sold by the person to a retailer in 21.29 this state. 21.30 The report must be made in the form and manner prescribed 21.31 by the commissioner. 21.32 Subd. 2. [COMMON CARRIERS.] Common carriers transporting 21.33 tobacco products into this state shall file with the 21.34 commissioner reports of all such shipments other than those 21.35 which are delivered to public warehouses of first destination in 21.36 this state, licensed under the provisions of chapter 231. The 22.1 reports must be filed monthly on or before the tenth day of each 22.2 month and shall show with respect to deliveries made in the 22.3 preceding month: the date, point of origin, point of delivery, 22.4 name of consignee, description and quantity of tobacco products 22.5 delivered, and any other information required by the 22.6 commissioner. 22.7 A common carrier transporting tobacco products into 22.8 Minnesota shall permit examination by the commissioner of its 22.9 records relating to the shipment of tobacco products. 22.10 Subd. 3. [MANUFACTURERS.] A manufacturer of tobacco 22.11 products as defined by this chapter shall report in the form and 22.12 manner prescribed by the commissioner all sales of tobacco 22.13 products to Minnesota licensed distributors, subjobbers, 22.14 retailers, or to any locations within the state. The report is 22.15 due on the 18th day of the month following the reporting period. 22.16 Sec. 13. [297F.13] [REQUIRED RECORDS.] 22.17 Subdivision 1. [CIGARETTE DISTRIBUTOR.] (a) A distributor 22.18 shall keep at each licensed place of business complete and 22.19 accurate records for that place of business. The records must 22.20 include: itemized invoices of cigarettes held, purchased, 22.21 manufactured, or brought in or caused to be brought in from 22.22 outside the state, and all sales of cigarettes made, except 22.23 sales to the ultimate consumer. These records must show the 22.24 names and addresses of purchasers, the inventory of all stamps 22.25 affixed and unaffixed and all cigarettes on hand at the close of 22.26 each period for which a return is required, and any other 22.27 pertinent papers and documents relating to the purchase, sale, 22.28 or disposition of cigarettes. 22.29 (b) A distributor or subjobber who sells cigarettes at 22.30 retail must maintain a separate inventory, substantiated with 22.31 invoices for cigarettes that were acquired for retail sale. 22.32 (c) When a licensed distributor sells cigarettes 22.33 exclusively to the ultimate consumer at the address given in the 22.34 license, no invoice of those sales is required, but itemized 22.35 invoices must be made of all cigarettes transferred to other 22.36 retail outlets owned or controlled by that licensed distributor. 23.1 (d) All books, records, and other documents required by 23.2 this chapter shall be preserved for a period of at least 3-1/2 23.3 years after the date of the documents or the date of the entries 23.4 appearing in the records, unless the commissioner in writing 23.5 authorizes their destruction or disposal at an earlier date. 23.6 (e) To determine whether the distributor is in compliance 23.7 with the provisions of this chapter, at any time during usual 23.8 business hours the commissioner, or duly authorized agents or 23.9 employees, may enter a place of business of a distributor, 23.10 without a search warrant, and inspect the premises, the records 23.11 required to be kept under this chapter, and the packages of 23.12 cigarettes and the vending devices in that place of business. 23.13 If the commissioner, or an agent or employee of the 23.14 commissioner, is denied free access or is hindered or interfered 23.15 with in making the examination, the commissioner may revoke the 23.16 distributor's license. 23.17 Subd. 2. [TOBACCO PRODUCTS DISTRIBUTOR.] (a) A distributor 23.18 shall keep at each licensed place of business complete and 23.19 accurate records for that place of business, including itemized 23.20 invoices of tobacco products held, purchased, manufactured, 23.21 brought in or caused to be brought in from outside the state, or 23.22 shipped or transported to retailers in this state, and all sales 23.23 of tobacco products made, except sales to the ultimate consumer. 23.24 (b) When a licensed distributor sells tobacco products 23.25 exclusively to the ultimate consumer at the address given in the 23.26 license, no invoice of those sales is required, but itemized 23.27 invoices must be made of all tobacco products transferred to 23.28 other retail outlets owned or controlled by that licensed 23.29 distributor. 23.30 (c) All books, records, and other documents required by 23.31 this chapter must be preserved for a period of at least 3-1/2 23.32 years after the date of the documents or the date of the entries 23.33 appearing in the records, unless the commissioner authorizes in 23.34 writing their destruction or disposal at an earlier date. 23.35 (d) To determine whether the distributor is in compliance 23.36 with the provisions of this chapter, at any time during usual 24.1 business hours the commissioner, or duly authorized agents or 24.2 employees, may enter a place of business of a distributor, 24.3 without a search warrant, and inspect the premises, the records 24.4 required to be kept under this chapter, and the tobacco products 24.5 in that place of business. If the commissioner, or an agent or 24.6 employee of the commissioner, is denied free access or is 24.7 hindered or interfered with in making the examination, the 24.8 commissioner may revoke the distributor's license. 24.9 Subd. 3. [DISTRIBUTOR TO PRESERVE COPIES OF INVOICES.] A 24.10 person who sells cigarettes or tobacco products to persons other 24.11 than the ultimate consumer shall render with each sale itemized 24.12 invoices showing the seller's name and address, the purchaser's 24.13 name and address, the date of sale, and all prices and 24.14 discounts, and shall preserve legible copies of all such 24.15 invoices for 3-1/2 years from the date of the sale. 24.16 Subd. 4. [RETAILER AND SUBJOBBER TO PRESERVE PURCHASE 24.17 INVOICES.] Every retailer and subjobber shall procure itemized 24.18 invoices of all cigarettes or tobacco products purchased. The 24.19 invoices shall show the name and address of the seller and the 24.20 date of purchase. 24.21 The retailer and subjobber shall preserve a legible copy of 24.22 each invoice for one year from the date of purchase. Copies 24.23 should be numbered and kept in chronological order. 24.24 To determine whether the business is in compliance with the 24.25 provisions of this chapter and sections 325D.30 to 325D.42, at 24.26 any time during usual business hours, the commissioner, or duly 24.27 authorized agents and employees, may enter any place of business 24.28 of a retailer or subjobber without a search warrant and inspect 24.29 the premises, the records required to be kept under this 24.30 chapter, and the packages of cigarettes, tobacco products, and 24.31 vending devices contained on the premises. 24.32 Subd. 5. [CIGARETTES AND TOBACCO PRODUCTS; RECORDS OF 24.33 DELIVERY AND SHIPMENT.] Records of all deliveries or shipments 24.34 of cigarettes or tobacco products from any public warehouse of 24.35 first destination in this state (which is subject to the 24.36 provisions of and licensed under chapter 231), must be kept by 25.1 the warehouse and made available to the commissioner for 25.2 inspection. The records must show the name and address of the 25.3 consignee, the date, the quantity of cigarettes or tobacco 25.4 products delivered, and any other information required by the 25.5 commissioner. These records must be preserved for one year from 25.6 the date of delivery of the cigarettes or tobacco products. 25.7 Sec. 14. [297F.14] [REFUNDS.] 25.8 Subdivision 1. [GENERAL RIGHT TO REFUND.] If cigarettes or 25.9 tobacco products, upon which the tax imposed by this chapter has 25.10 been reported and paid, are shipped or transported by the 25.11 distributor to consumers to be consumed outside the state, or to 25.12 retailers or subjobbers outside the state to be sold by those 25.13 retailers or subjobbers outside the state, or are returned to 25.14 the manufacturer by the distributor, or destroyed by the 25.15 distributor, refund of the tax or credit may be made to the 25.16 distributor. 25.17 Subd. 2. [OVERPAYMENT OF TAX.] An overpayment of the tax 25.18 imposed under this chapter may be refunded to the taxpayer. 25.19 Subd. 3. [CREDIT AGAINST TAX.] The commissioner may credit 25.20 the amount determined under this section against taxes otherwise 25.21 payable under this chapter by the taxpayer. 25.22 Subd. 4. [BAD DEBT.] The commissioner may adopt rules 25.23 providing a refund of the tax paid under this chapter if the tax 25.24 paid qualifies as a bad debt under section 166(a) of the 25.25 Internal Revenue Code. 25.26 Subd. 5. [SOURCE OF REFUND; CIGARETTES.] The commissioner 25.27 of finance shall pay the cigarette tax refund out of the general 25.28 fund. The refunds are apportioned to the same accounts and 25.29 funds in the general fund to which the tax payments were 25.30 deposited, except no refunds may be apportioned to the general 25.31 obligation special tax bond debt service account. 25.32 Subd. 6. [SOURCE OF REFUND; TOBACCO PRODUCTS.] The 25.33 commissioner of finance shall pay the tobacco products tax 25.34 refund out of the general fund. 25.35 Subd. 7. [ANNUAL APPROPRIATION.] There is appropriated 25.36 annually from the general fund to the commissioner of finance 26.1 the amount necessary to make the refunds provided by this 26.2 section. 26.3 Sec. 15. [297F.15] [EXAMINATIONS AND AUDITS.] 26.4 Subdivision 1. [EXAMINATION OF TAXPAYER.] To determine the 26.5 accuracy of a return or a report, or for the purpose of 26.6 collection, or in fixing liability or verifying information 26.7 under any tax under this chapter, the commissioner may make 26.8 reasonable examinations or investigations of a taxpayer's place 26.9 of business, tangible personal property, equipment, computer 26.10 systems and facilities, pertinent books, records, papers, 26.11 vouchers, computer printouts, accounts, and documents. 26.12 Subd. 2. [ACCESS TO RECORDS.] When conducting an 26.13 investigation or an audit of a taxpayer, or for the purpose of 26.14 collection, or in fixing liability or verifying information 26.15 under any tax under this chapter, the commissioner may examine, 26.16 except where privileged by law, the relevant records and files 26.17 of any person, business, institution, financial institution, 26.18 state agency, agency of the United States government, or agency 26.19 of any other state where permitted by statute, agreement, or 26.20 reciprocity. The commissioner may compel production of these 26.21 records by subpoena. A subpoena may be served directly by the 26.22 commissioner. 26.23 Subd. 3. [POWER TO COMPEL TESTIMONY.] In the 26.24 administration of any tax under this chapter, the commissioner 26.25 may: 26.26 (1) administer oaths or affirmations and compel by subpoena 26.27 the attendance of witnesses, testimony, and the production of a 26.28 person's pertinent books, records, papers, and other data for 26.29 inspection and copying; 26.30 (2) examine under oath or affirmation any person regarding 26.31 the business of any taxpayer concerning any relevant matter 26.32 incident to the administration of any tax under this chapter. 26.33 The fees of witnesses required by the commissioner to attend a 26.34 hearing are equal to those allowed to witnesses appearing before 26.35 courts of this state. The fees must be paid in the manner 26.36 provided for the payment of other expenses incident to the 27.1 administration of any tax under this chapter; and 27.2 (3) in addition to other remedies that may be available, 27.3 bring an action in equity by the state against a taxpayer for an 27.4 injunction ordering the taxpayer to file a complete and proper 27.5 return or amended return. The district courts of this state 27.6 have jurisdiction over the action and disobedience of an 27.7 injunction issued under this clause may be punished as a 27.8 contempt of district court. 27.9 Subd. 4. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 27.10 IS KNOWN.] An investigation may extend to a person that the 27.11 commissioner determines has access to information that may be 27.12 relevant to the examination or investigation. When a subpoena 27.13 requiring the production of records as described in subdivision 27.14 2 is served on a third-party recordkeeper, written notice of the 27.15 subpoena must be mailed to the taxpayer and to any other person 27.16 who is identified on the subpoena. The notices must be given 27.17 within three days of the day on which the subpoena is served. 27.18 Notice to the taxpayer required by this section is sufficient if 27.19 it is mailed to the last address on record with the 27.20 commissioner. The provisions of this subdivision relating to 27.21 notice to the taxpayer or other parties identified in the 27.22 subpoena do not apply if there is reasonable cause to believe 27.23 that the giving of notice may lead to attempts to conceal, 27.24 destroy, or alter records relevant to the examination, to 27.25 prevent the communication of information from other persons 27.26 through intimidation, bribery, or collusion, or to flee to avoid 27.27 prosecution, testifying, or production of records. 27.28 Subd. 5. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 27.29 IS NOT KNOWN.] A subpoena that does not identify the person or 27.30 persons whose tax liability is investigated may be served only 27.31 if: 27.32 (1) the subpoena relates to the investigation of a 27.33 particular person or an ascertainable group or class of persons; 27.34 (2) there is reasonable basis for believing that the person 27.35 or group or class of persons may fail or may have failed to 27.36 comply with the tax laws administered by the commissioner; 28.1 (3) the information sought to be obtained from the 28.2 examination of the records, and the identity of the person or 28.3 persons with respect to whose liability the subpoena is issued, 28.4 is not readily available from other sources; 28.5 (4) the subpoena is clear and specific concerning the 28.6 information sought to be obtained; and 28.7 (5) the information sought to be obtained is limited solely 28.8 to the scope of the investigation. 28.9 The party served with a subpoena that does not identify the 28.10 person or persons with respect to whose tax liability the 28.11 subpoena is issued may, within 20 days after service of the 28.12 subpoena, petition the district court in the judicial district 28.13 in which that party is located for a determination whether the 28.14 commissioner has complied with all the requirements in clauses 28.15 (1) to (5), and thus, whether the subpoena is enforceable. If 28.16 no petition is made by the party served within the time 28.17 prescribed, the subpoena has the effect of a court order. 28.18 Subd. 6. [REQUEST BY TAXPAYER FOR SUBPOENA.] When the 28.19 commissioner has the power to issue a subpoena for investigative 28.20 or auditing purposes, the commissioner shall honor a reasonable 28.21 request by the taxpayer to issue a subpoena on the taxpayer's 28.22 behalf in connection with the investigation or audit. 28.23 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 28.24 SUBPOENA.] Disobedience of subpoenas issued under this section 28.25 shall be punished by the district court of the district in which 28.26 the party served with the subpoena is located, in the same 28.27 manner as contempt of the district court. 28.28 Subd. 8. [COST OF PRODUCTION OF RECORDS.] The cost of 28.29 producing records of a third party required by a subpoena must 28.30 be paid by the taxpayer, if the taxpayer requests the subpoena 28.31 to be issued, or if the taxpayer has the records available but 28.32 has refused to provide them to the commissioner. In other cases 28.33 when the taxpayer cannot produce records and the commissioner 28.34 then initiates a subpoena for third-party records, the 28.35 commissioner shall pay the reasonable cost of producing the 28.36 records. The commissioner may later assess the reasonable costs 29.1 against the taxpayer if the records contribute to the 29.2 determination of an assessment of tax against the taxpayer. 29.3 Subd. 9. [PHYSICAL INVENTORY.] The commissioner or the 29.4 commissioner's authorized agents may, as considered necessary, 29.5 require a cigarette or tobacco products distributor to furnish a 29.6 physical inventory of all cigarettes or tobacco products in 29.7 stock. The inventory must contain the information that the 29.8 commissioner requests and must be certified by an officer of the 29.9 corporation. 29.10 Subd. 10. [OFFSET.] Upon audit, if a distributor's return 29.11 reflects an overage resulting from an inventory counting error, 29.12 the overage shall be offset against a shortage, if any, in the 29.13 month immediately preceding the month of the overage. If any 29.14 overage remains after that offset, the remainder may only be 29.15 offset against a shortage, if any, in the month immediately 29.16 following the month of the overage. If the commissioner 29.17 determines that the overage is attributable to a mistake by the 29.18 distributor other than an inventory counting error, the 29.19 commissioner may permit the overage to be offset against a 29.20 shortage in any month or months during the 12-month period 29.21 immediately following the month when the overage was discovered 29.22 upon audit. 29.23 Sec. 16. [297F.16] [ASSESSMENTS.] 29.24 Subdivision 1. [GENERAL RULE.] The commissioner shall make 29.25 determinations, corrections, and assessments with respect to any 29.26 tax under this chapter, including interest, additions to taxes, 29.27 and assessable penalties. 29.28 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails 29.29 to file a required return, the commissioner, from information in 29.30 the commissioner's possession or obtainable by the commissioner, 29.31 may make a return for the taxpayer. The return is prima facie 29.32 correct and valid. The commissioner may use statistical or 29.33 other sampling techniques consistent with generally accepted 29.34 auditing standards in examining returns or records and making 29.35 assessments. 29.36 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 30.1 TAXPAYER.] (a) When a return has been filed and the commissioner 30.2 determines that the tax disclosed by the return is different 30.3 than the tax determined by the examination, the commissioner 30.4 shall send an order of assessment to the taxpayer. When no 30.5 return has been filed, the commissioner may make a return for 30.6 the taxpayer under subdivision 2 or may send an order of 30.7 assessment under this subdivision. The order must explain the 30.8 basis for the assessment and must explain the taxpayer's appeal 30.9 rights. An order of assessment is final when made but may be 30.10 reconsidered by the commissioner under this chapter. 30.11 (b) Penalties under this chapter are not imposed and no 30.12 collection action can be taken, including the filing of liens 30.13 under section 270.69, if the amount shown on the order is paid 30.14 to the commissioner: 30.15 (1) within 60 days after notice of the amount and demand 30.16 for its payment have been mailed to the taxpayer by the 30.17 commissioner; or 30.18 (2) if an administrative appeal is filed under this 30.19 chapter, or a tax court appeal is filed under chapter 271, 30.20 within 60 days following final determination of the appeal if 30.21 the appeal is based upon a constitutional challenge to the tax, 30.22 and if not, when the decision of the tax court is made. 30.23 Subd. 4. [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 30.24 refund or credit is considered an underpayment of tax on the 30.25 date made. An assessment of a deficiency arising out of an 30.26 erroneous refund or credit must be made within 3-1/2 years from 30.27 the date prescribed for filing the return, plus any extension of 30.28 time granted for filing the return, but only if filed within the 30.29 extended time, or two years from the time the tax is paid in 30.30 full, whichever period expires later. 30.31 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or 30.32 assessment of tax made by the commissioner is prima facie 30.33 correct and valid. The taxpayer has the burden of establishing 30.34 its incorrectness or invalidity in any related action or 30.35 proceeding. 30.36 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The 31.1 commissioner, on examining returns of a taxpayer for more than 31.2 one year or period, may issue one order covering the period 31.3 under examination that reflects the aggregate refund or 31.4 additional tax due. 31.5 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment, 31.6 sent postage prepaid by United States mail to the taxpayer at 31.7 the taxpayer's last known address, is sufficient even if the 31.8 taxpayer is deceased or is under a legal disability, or, in the 31.9 case of a corporation, has terminated its existence, unless the 31.10 department has been provided with a new address by a party 31.11 authorized to receive notices of assessment. 31.12 Sec. 17. [297F.17] [LIMITATIONS ON TIME FOR ASSESSMENT OF 31.13 TAX.] 31.14 Subdivision 1. [GENERAL RULE.] Except as otherwise 31.15 provided in this chapter, the amount of any tax due must be 31.16 assessed within 3-1/2 years after a return is filed. The taxes 31.17 are considered assessed within the meaning of this section when 31.18 the commissioner has prepared a notice of tax assessment and 31.19 mailed it to the person required to file a return to the post 31.20 office address given in the return. The notice of tax 31.21 assessment must be sent by mail to the post office address given 31.22 in the return and the record of the mailing is presumptive 31.23 evidence of the giving of such notice, and such records must be 31.24 preserved by the commissioner. 31.25 Subd. 2. [DATE OF FILING.] For purposes of this chapter, a 31.26 return filed before the last day prescribed by law for its 31.27 filing is considered filed on the last day. 31.28 Subd. 3. [FALSE OR FRAUDULENT RETURN OR CLAIM FOR REFUND; 31.29 NO RETURN.] When a person required to file a return under this 31.30 chapter files a false or fraudulent return or claim for refund, 31.31 or fails to file a return, the tax may be assessed, and a 31.32 proceeding in court for the collection of such tax may be begun 31.33 at any time. 31.34 Subd. 4. [OMISSION OVER 25 PERCENT.] If the person 31.35 required to file the return omits from the return a dollar 31.36 amount properly includable in it that is in excess of 25 percent 32.1 of the dollar amount reported in the return, the tax may be 32.2 assessed, or a proceeding in court for the collection of such 32.3 tax may be begun, at any time within 6-1/2 years after the 32.4 return was filed. 32.5 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise 32.6 provided in this chapter, a claim for a refund of an overpayment 32.7 of tax must be filed within 3-1/2 years from the date prescribed 32.8 for filing the return, plus any extension of time granted for 32.9 filing the return, but only if filed within the extended time, 32.10 or one year after the date of assessment, whichever period 32.11 expires later. 32.12 Subd. 6. [TIME LIMIT FOR BAD DEBT DEDUCTION.] Claims for 32.13 refund must be filed with the commissioner within one year of 32.14 the filing date of the taxpayer's federal income tax return 32.15 containing the bad debt deduction that is being claimed. 32.16 Claimants under this subdivision are subject to the notice 32.17 requirements of section 289A.38, subdivision 7. 32.18 Subd. 7. [CONSENT TO EXTEND TIME.] If before the 32.19 expiration of the time prescribed in this section for the 32.20 assessment of the tax, the commissioner and the person filing 32.21 the return consent in writing to an extension of time for the 32.22 assessment of the tax, the tax may be assessed at any time prior 32.23 to the expiration of the period agreed upon. The period so 32.24 agreed upon may be extended by subsequent agreements in writing 32.25 made before the expiration of the period previously agreed upon. 32.26 Subd. 8. [SUSPENSION OF TIME; BANKRUPTCY PROCEEDINGS.] The 32.27 time during which a tax must be assessed or collection 32.28 proceedings commenced under this chapter is suspended during the 32.29 period from the date of a filing of a petition in bankruptcy 32.30 until 30 days after notice to the commissioner that the 32.31 bankruptcy proceedings have been closed or dismissed, or that 32.32 the automatic stay has been terminated or has expired. 32.33 The suspension of the statute of limitations under this 32.34 subdivision applies to the person against whom the petition in 32.35 bankruptcy is filed, and to all other persons who may be wholly 32.36 or partially liable for the tax under this chapter. 33.1 Sec. 18. [297F.18] [INTEREST.] 33.2 Subdivision 1. [INTEREST RATE.] When interest is required 33.3 under this section, interest is computed at the rate specified 33.4 in section 270.75. 33.5 Subd. 2. [LATE PAYMENT.] If a tax under this chapter is 33.6 not paid within the time named by law for payment, the unpaid 33.7 tax bears interest from the date the tax should have been paid 33.8 until the date the tax is paid. 33.9 Subd. 3. [EXTENSIONS.] When an extension of time for 33.10 payment has been granted, interest must be paid from the date 33.11 the payment should have been made, if no extension had been 33.12 granted, until the date the tax is paid. 33.13 Subd. 4. [ADDITIONAL ASSESSMENTS.] When a taxpayer is 33.14 liable for additional taxes because of a redetermination by the 33.15 commissioner, or for any other reason, the additional taxes bear 33.16 interest from the time the tax should have been paid, without 33.17 regard to an extension allowed, until the date the tax is paid. 33.18 Subd. 5. [ERRONEOUS REFUNDS.] In the case of an erroneous 33.19 refund, interest begins to accrue from the date the refund was 33.20 paid unless the erroneous refund results from a mistake of the 33.21 department, in which case no interest or penalty is imposed, 33.22 unless the deficiency assessment is not satisfied within 60 days 33.23 of the order. 33.24 Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section 33.25 549.09, if judgment is entered in favor of the commissioner with 33.26 regard to any tax under this chapter, the judgment bears 33.27 interest at the rate given in section 270.75 from the date the 33.28 judgment is entered until the date of payment. 33.29 Subd. 7. [INTEREST ON PENALTIES.] (a) A penalty imposed 33.30 under section 297F.19, subdivisions 2 to 7, bears interest from 33.31 the date the return or payment was required to be filed or paid, 33.32 including any extensions, to the date of payment of the penalty. 33.33 (b) A penalty not included in paragraph (a) bears interest 33.34 only if it is not paid within ten days from the date of the 33.35 notice. In that case interest is imposed from the date of 33.36 notice to the date of payment. 34.1 Sec. 19. [297F.19] [CIVIL PENALTIES.] 34.2 Subdivision 1. [CIVIL ACTION; GENERAL RULE.] The 34.3 commissioner may recover the amount of any tax due and unpaid 34.4 under this chapter, as well as interest, and any penalty in a 34.5 civil action. The collection of the tax, interest, or penalty 34.6 is not a bar to any prosecution under this chapter. 34.7 Subd. 2. [PENALTY FOR FAILURE TO PAY TAX.] If a tax 34.8 imposed by this chapter is not paid within the time specified 34.9 for payment, a penalty is added to the amount required to be 34.10 shown as tax. The penalty is five percent of the tax not paid 34.11 on or before the date specified for payment of the tax if the 34.12 failure is for not more than 30 days, with an additional penalty 34.13 of five percent of the amount of tax remaining unpaid during 34.14 each additional 30 days or fraction of 30 days during which the 34.15 failure continues, not exceeding 15 percent in the aggregate. 34.16 Subd. 3. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 34.17 a taxpayer fails to make and file a return within the time 34.18 prescribed, including an extension, a penalty of five percent of 34.19 the amount of tax not timely paid is added to the tax. 34.20 Subd. 4. [COMBINED PENALTIES.] When penalties are imposed 34.21 under subdivisions 2 and 3, the penalties imposed under both 34.22 subdivisions combined must not exceed 38 percent in the 34.23 aggregate. 34.24 Subd. 5. [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR 34.25 RULES.] If part of an additional assessment is due to negligence 34.26 or intentional disregard of the provisions of the applicable tax 34.27 laws or rules of the commissioner, but without intent to 34.28 defraud, there must be added to the tax an amount equal to ten 34.29 percent of the additional assessment. 34.30 Subd. 6. [PENALTY FOR REPEATED FAILURES TO FILE RETURNS OR 34.31 PAY TAXES.] If there is a pattern by a person of repeated 34.32 failures to timely file returns or timely pay taxes, and written 34.33 notice is given that a penalty will be imposed if such failures 34.34 continue, a penalty of 25 percent of the amount of the tax not 34.35 timely paid as a result of each such subsequent failure is added 34.36 to the tax. The penalty can be abated under the abatement 35.1 authority in section 270.07, subdivisions 1, paragraph (e), and 35.2 6. 35.3 Subd. 7. [PENALTY FOR FALSE OR FRAUDULENT RETURN; 35.4 EVASION.] If a person files a false or fraudulent return, or 35.5 attempts in any manner to evade or defeat a tax or payment of 35.6 tax, there is imposed on the person a penalty equal to 50 35.7 percent of the tax due for the period to which the return 35.8 related, less amounts paid by the person on the basis of the 35.9 false or fraudulent return. 35.10 Subd. 8. [PAYMENT OF PENALTIES.] The penalties imposed by 35.11 this section are collected and paid in the same manner as taxes. 35.12 Subd. 9. [PENALTIES ARE ADDITIONAL.] The civil penalties 35.13 imposed by this section are in addition to the criminal 35.14 penalties imposed by this chapter. 35.15 Sec. 20. [297F.20] [CRIMINAL PENALTIES.] 35.16 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 35.17 A person required to file a return, report, or other document 35.18 with the commissioner who fails to do so is guilty of a 35.19 misdemeanor. 35.20 (b) A person required to pay or to collect and remit a tax 35.21 under this chapter, who fails to do so when required, is guilty 35.22 of a misdemeanor. 35.23 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY; 35.24 WILLFUL EVASION.] (a) A person required to file a return, 35.25 report, or other document with the commissioner, who knowingly, 35.26 rather than accidentally, inadvertently, or negligently, fails 35.27 to file it when required, is guilty of a gross misdemeanor. A 35.28 person required to file a return, report, or other document who 35.29 willfully attempts in any manner to evade or defeat a tax by 35.30 failing to file it when required, is guilty of a felony. 35.31 (b) A person required to pay or to collect and remit a tax 35.32 under this chapter, who knowingly, rather than accidentally, 35.33 inadvertently, or negligently, fails to file it when required, 35.34 is guilty of a gross misdemeanor. A person required to pay or 35.35 to collect and remit a tax, who willfully attempts to evade or 35.36 defeat tax law by failing to do so when required, is guilty of a 36.1 felony. 36.2 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 36.3 person who files with the commissioner a return, report, or 36.4 other document, known by the person to be fraudulent or false 36.5 concerning a material matter, is guilty of a felony. 36.6 (b) A person who knowingly aids or assists in, or advises 36.7 in the preparation or presentation of a return, report, or other 36.8 document that is fraudulent or false concerning a material 36.9 matter, whether or not the falsity or fraud is committed with 36.10 the knowledge or consent of the person authorized or required to 36.11 present the return, report, or other document, is guilty of a 36.12 felony. 36.13 Subd. 4. [COUNTERFEITING.] Any person who makes, alters, 36.14 forges, or counterfeits a stamp, or who possesses an altered, 36.15 forged, or counterfeit stamp is guilty of a felony. 36.16 Subd. 5. [UNSTAMPED CIGARETTES; PRESUMPTION.] (a) Except 36.17 as provided in paragraph (b), whenever a package of cigarettes 36.18 is found in the place of business or in the possession of any 36.19 person without a proper stamp affixed as required by this 36.20 chapter, it is presumed that those cigarettes are kept there or 36.21 held by that person illegally. 36.22 (b) This presumption does not apply to: 36.23 (1) cigarettes in the place of business or in the 36.24 possession of a licensed distributor; 36.25 (2) cigarettes in the possession of a common carrier or 36.26 sleeping car company engaged in interstate commerce; 36.27 (3) cigarettes held in a public warehouse of first 36.28 destination in this state, in the unbroken, original shipping 36.29 containers, subject to delivery or shipping instructions from 36.30 the manufacturer or a distributor; 36.31 (4) cigarettes in the possession of a person other than a 36.32 distributor in quantities of 200 cigarettes or less, when those 36.33 cigarettes have had the individual packages or seals broken, and 36.34 when they are intended for personal use and not to be sold or 36.35 offered for sale; 36.36 (5) cigarettes sold under circumstances in which the tax 37.1 cannot legally be imposed because of the laws or constitution of 37.2 the United States. 37.3 Subd. 6. [UNSTAMPED CIGARETTES; UNTAXED TOBACCO 37.4 PRODUCTS.] (a) A person who possesses, receives, or transports 37.5 200 or more, but fewer than 5,000 unstamped cigarettes, or up to 37.6 $100 worth of untaxed tobacco products is guilty of a 37.7 misdemeanor. 37.8 (b) A person who possesses, receives, or transports 5,000 37.9 or more, but fewer than 20,000 unstamped cigarettes, or up to 37.10 $500 worth of untaxed tobacco products is guilty of a gross 37.11 misdemeanor. 37.12 (c) A person who possesses, receives, or transports 20,000 37.13 or more unstamped cigarettes, or $500 or more worth of untaxed 37.14 tobacco products is guilty of a felony. 37.15 Subd. 7. [SALE OF CIGARETTE PACKAGES WITH INDIAN 37.16 STAMP.] (a) A retailer doing business off of an Indian 37.17 reservation who sells or offers to sell 200 or more, but fewer 37.18 than 5,000 cigarettes with Indian stamps is guilty of a 37.19 misdemeanor. 37.20 (b) A retailer doing business off of an Indian reservation 37.21 who sells or offers to sell 5,000 or more, but fewer than 20,000 37.22 cigarettes with Indian stamps is guilty of a gross misdemeanor. 37.23 (c) A retailer doing business off of an Indian reservation 37.24 who sells or offers to sell 20,000 or more cigarettes with 37.25 Indian stamps is guilty of a felony. 37.26 Subd. 8. [SALES AFTER LICENSE REVOCATION.] A person 37.27 selling cigarettes or tobacco products after the person's 37.28 license has been revoked is guilty of a felony. 37.29 Subd. 9. [PURCHASES FROM UNLICENSED SELLERS.] (a) A 37.30 retailer, subjobber, or consumer who purchases from an 37.31 unlicensed seller 200 or more, but fewer than 5,000 cigarettes 37.32 or up to $100 worth of tobacco products is guilty of a 37.33 misdemeanor. 37.34 (b) A retailer, subjobber, or consumer who purchases from 37.35 an unlicensed seller 5,000 or more, but fewer than 20,000 37.36 cigarettes or up to $500 worth of untaxed tobacco products is 38.1 guilty of a gross misdemeanor. 38.2 (c) A retailer, subjobber, or consumer who purchases from 38.3 an unlicensed seller 20,000 or more cigarettes or $500 or more 38.4 worth of tobacco products is guilty of a felony. 38.5 Subd. 10. [PENALTIES ARE ADDITIONAL.] Criminal penalties 38.6 imposed by this section are in addition to any civil penalties 38.7 imposed by this chapter. 38.8 Subd. 11. [STATUTE OF LIMITATIONS.] Notwithstanding 38.9 section 628.26, or any other provision of the criminal laws of 38.10 this state, an indictment may be found and filed, or a complaint 38.11 filed, upon a criminal offense named in this section, in the 38.12 proper court within six years after the offense is committed. 38.13 Subd. 12. [OTHER PENALTIES.] A violation of this chapter 38.14 unless otherwise specified is a misdemeanor. 38.15 Sec. 21. [297F.21] [CONTRABAND.] 38.16 Subdivision 1. [CONTRABAND DEFINED.] The following are 38.17 declared to be contraband and therefore subject to civil and 38.18 criminal penalties under this chapter: 38.19 (a) Cigarette packages which do not have stamps affixed to 38.20 them as provided in this chapter, including but not limited to 38.21 (i) packages with illegible stamps and packages with stamps that 38.22 are not complete or whole even if the stamps are legible, and 38.23 (ii) all devices for the vending of cigarettes in which packages 38.24 as defined in item (i) are found, including all contents 38.25 contained within the devices. 38.26 (b) A device for the vending of cigarettes and all packages 38.27 of cigarettes, where the device does not afford at least partial 38.28 visibility of contents. Where any package exposed to view does 38.29 not carry the stamp required by this chapter, it shall be 38.30 presumed that all packages contained in the device are unstamped 38.31 and contraband. 38.32 (c) A device for the vending of cigarettes to which the 38.33 commissioner or authorized agents have been denied access for 38.34 the inspection of contents. In lieu of seizure, the 38.35 commissioner or an agent may seal the device to prevent its use 38.36 until inspection of contents is permitted. 39.1 (d) A device for the vending of cigarettes which does not 39.2 carry the name and address of the owner, plainly marked and 39.3 visible from the front of the machine. 39.4 (e) A device including, but not limited to, motor vehicles, 39.5 trailers, snowmobiles, airplanes, and boats used with the 39.6 knowledge of the owner or of a person operating with the consent 39.7 of the owner for the storage or transportation of more than 39.8 5,000 cigarettes which are contraband under this subdivision. 39.9 When cigarettes are being transported in the course of 39.10 interstate commerce, or are in movement from either a public 39.11 warehouse to a distributor upon orders from a manufacturer or 39.12 distributor, or from one distributor to another, the cigarettes 39.13 are not contraband, notwithstanding the provisions of clause (a). 39.14 (f) Cigarette packages or tobacco products obtained from an 39.15 unlicensed seller. 39.16 (g) Cigarette packages offered for sale or held as 39.17 inventory in violation of section 297F.20, subdivision 7. 39.18 (h) Tobacco products on which the tax has not been paid by 39.19 a licensed distributor. 39.20 Subd. 2. [SEIZURE.] Cigarettes, tobacco products, or other 39.21 property made contraband by subdivision 1 may be seized by the 39.22 commissioner or authorized agents or by any sheriff or other 39.23 police officer, with or without process, and are subject to 39.24 forfeiture as provided in subdivisions 3 and 4. 39.25 Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 39.26 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 39.27 seizure of any alleged contraband, the person making the seizure 39.28 shall make available an inventory of the property seized to the 39.29 person from whom the seizure was made, if known, and file a copy 39.30 with the commissioner. Within ten days after the date of 39.31 service of the inventory, the person from whom the property was 39.32 seized or any person claiming an interest in the property may 39.33 file with the commissioner a demand for a judicial determination 39.34 of the question as to whether the property was lawfully subject 39.35 to seizure and forfeiture. The commissioner, within 60 days, 39.36 shall institute an action in the district court of the county 40.1 where the seizure was made to determine the issue of forfeiture. 40.2 (b) The action must be brought in the name of the state and 40.3 must be prosecuted by the county attorney or by the attorney 40.4 general. The court shall hear the action without a jury and 40.5 shall try and determine the issues of fact and law involved. 40.6 (c) When a judgment of forfeiture is entered, the 40.7 commissioner may, unless the judgment is stayed pending an 40.8 appeal, either: 40.9 (1) deliver the forfeited property to the commissioner of 40.10 human services for use by patients in state institutions; 40.11 (2) cause it to be destroyed; or 40.12 (3) cause it to be sold at public auction as provided by 40.13 law. 40.14 (d) If a demand for judicial determination is made and no 40.15 action commenced as provided in this subdivision, the property 40.16 must be released by the commissioner and returned to the person 40.17 entitled to it. If no demand is made, the property seized is 40.18 considered forfeited to the state by operation of law and may be 40.19 disposed of by the commissioner as provided in the case of a 40.20 judgment of forfeiture. When the commissioner is satisfied that 40.21 a person from whom property is seized was acting in good faith 40.22 and without intent to evade the tax imposed by this chapter, the 40.23 commissioner shall release the property seized without further 40.24 legal proceedings. 40.25 Subd. 4. [DISPOSAL OF OTHER PROPERTY.] (a) The property 40.26 described in subdivision 1, clause (e), must be confiscated 40.27 after conviction of the person from whom it was seized, upon 40.28 compliance with the following procedure: the commissioner or 40.29 agents shall file with the court a separate complaint against 40.30 the property, describing it and charging its use in the 40.31 specified violation, and specifying substantially the time and 40.32 place of the unlawful use. A copy of the complaint must be 40.33 served upon the defendant or person in charge of the property at 40.34 the time of seizure, if any. 40.35 (b) If the person arrested is acquitted, the court shall 40.36 dismiss the complaint against the property and order it returned 41.1 to the persons legally entitled to it. Upon conviction of the 41.2 person arrested, the court shall issue an order directed to any 41.3 person known or believed to have any right or title or interest 41.4 in, or lien upon, any of the property, and to persons unknown 41.5 claiming any right, title, interest, or lien in it, describing 41.6 the property; and 41.7 (1) stating that it was seized and that a complaint against 41.8 it, charging the specified violation, has been filed with the 41.9 court, 41.10 (2) requiring the persons to file with the court 41.11 administrator their answer to the complaint, setting forth any 41.12 claim they may have to any right or title to, interest in, or 41.13 lien upon the property, within 30 days after the service of the 41.14 order, and 41.15 (3) notifying them in substance that if they fail to file 41.16 their answer within the prescribed time, the property will be 41.17 ordered sold by the commissioner or the commissioner's agents. 41.18 (c) The court shall cause the order to be served on any 41.19 person known or believed to have any right, title, interest, or 41.20 lien as in the case of a summons in a civil action, and on 41.21 unknown persons by publication, as provided for service of 41.22 summons in a civil action. If an answer is filed within the 41.23 time provided, the court shall fix a time for hearing, which 41.24 shall be not less than ten nor more than 30 days after the time 41.25 for filing answer expires. If no answer is filed within the 41.26 time prescribed, the court shall, upon affidavit by the court 41.27 administrator, setting forth the fact, order the property sold 41.28 by the commissioner or agents. Seventy-five percent of the 41.29 proceeds of the sale of forfeited property, after payment of 41.30 seizure, storage, forfeiture, and sale expenses, must be 41.31 forwarded to the commissioner for deposit as a supplement to its 41.32 operating fund or similar fund for official use, and 25 percent 41.33 must be forwarded to the county attorney or other prosecuting 41.34 agency that handled the forfeiture for deposit as a supplement 41.35 to its operating fund or similar fund for prosecutorial purposes. 41.36 (d) At the time fixed for hearing, unless continued for 42.1 cause, the matter must be heard and determined by the court 42.2 without a jury as in other civil actions. If the court finds 42.3 that the property, or any part of it, was used in the violation 42.4 specified in the complaint, it shall order the property 42.5 unlawfully used, and sold as provided by law, unless the owner 42.6 shows to the satisfaction of the court that the owner had no 42.7 notice or knowledge or reason to believe that the property was 42.8 used or intended to be used in the violation. The officer 42.9 making a sale, after deducting the expense of keeping the 42.10 property, the fee for seizure, and the costs of the sale, shall 42.11 pay all liens according to their priority, which are established 42.12 at the hearing as being bona fide, and as existing without the 42.13 lienor having any notice or knowledge that the property was 42.14 being used or was intended to be used for or in connection with 42.15 the violation specified in the order of the court, and shall pay 42.16 the balance of the proceeds to the commissioner for official use 42.17 and sharing in the manner provided in paragraph (c). A sale 42.18 under the provisions of this section operates to free the 42.19 property sold from any and all liens on it. An appeal from the 42.20 order of the district court lies as in other civil cases. 42.21 (e) At any time after seizure of the articles specified in 42.22 this subdivision, and before the hearing provided for, the 42.23 property must be returned to the owner or person having a legal 42.24 right to its possession, upon execution of a good and valid bond 42.25 to the state, with corporate surety, in the sum of not less than 42.26 $100 and not more than double the value of the property seized, 42.27 to be approved by the court in which the case is triable, or a 42.28 judge of it, conditioned to abide any order and the judgment of 42.29 the court, and to pay the full value of the property at the time 42.30 of seizure. The commissioner may dismiss the proceedings 42.31 outlined in this subdivision when the commissioner considers it 42.32 in the best interests of the state to do so. 42.33 Sec. 22. [297F.22] [ADMINISTRATIVE REVIEW.] 42.34 Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] A 42.35 taxpayer may obtain reconsideration by the commissioner of an 42.36 order assessing any tax imposed by this chapter, a denial of a 43.1 request for abatement of penalty, or a denial of a claim for 43.2 refund by filing an administrative appeal under subdivision 3. 43.3 A taxpayer cannot obtain reconsideration under this section if 43.4 the action taken by the commissioner is the outcome of an 43.5 administrative appeal. 43.6 Subd. 2. [NOTICE DATE.] For purposes of this section, the 43.7 term "notice date" means the date of the order adjusting the tax 43.8 or order denying a request for abatement, or, in the case of a 43.9 denied refund, the date of the notice of denial. 43.10 Subd. 3. [TIME AND CONTENT FOR ADMINISTRATIVE 43.11 APPEAL.] Within 60 days after the notice date, the taxpayer must 43.12 file a written appeal with the commissioner. The appeal need 43.13 not be in any particular form but must contain the following 43.14 information: 43.15 (1) the name and address of the taxpayer; 43.16 (2) if a corporation, the state of incorporation of the 43.17 taxpayer, and the principal place of business of the 43.18 corporation; 43.19 (3) the Minnesota identification number or social security 43.20 number of the taxpayer; 43.21 (4) the type of tax involved; 43.22 (5) the date; 43.23 (6) the tax years or period involved and the amount of tax 43.24 involved for each year or period; 43.25 (7) the findings in the notice that the taxpayer disputes; 43.26 (8) a summary statement that the taxpayer relies on for 43.27 each exception; and 43.28 (9) the taxpayer's signature or signature of the taxpayer's 43.29 duly authorized agent. 43.30 Subd. 4. [EXTENSIONS.] When requested in writing and 43.31 within the time allowed for filing an administrative appeal, the 43.32 commissioner may extend the time for filing an appeal for a 43.33 period of not more than 30 days from the expiration of the 60 43.34 days from the notice date. 43.35 Subd. 5. [DETERMINATION OF APPEAL.] On the basis of 43.36 applicable law and available information, the commissioner shall 44.1 determine the validity, if any, in whole or part of the appeal 44.2 and notify the taxpayer of the decision. This notice must be in 44.3 writing and contain the basis for the determination. 44.4 Subd. 6. [AGREEMENT DETERMINING TAX LIABILITY.] When it 44.5 appears to be in the best interests of the state, the 44.6 commissioner may settle any taxes, penalties, or interest that 44.7 the commissioner has under consideration by virtue of an appeal 44.8 filed under this section. An agreement must be in writing and 44.9 signed by the commissioner and the taxpayer, or the taxpayer's 44.10 representative authorized by the taxpayer to enter into an 44.11 agreement. The agreement must be filed in the office of the 44.12 commissioner. 44.13 Subd. 7. [APPEAL OF AN ADMINISTRATIVE 44.14 DETERMINATION.] Following the determination or settlement of an 44.15 appeal and notwithstanding any period of limitations for making 44.16 assessments or other determinations to the contrary, the 44.17 commissioner must issue an order reflecting that disposition. 44.18 If the statute of limitations for making assessments or other 44.19 determinations would have expired before the issuance of this 44.20 order, except for this section, the order is limited to issues 44.21 or matters contained in the appealed determination. Except in 44.22 the case of an agreement determining tax under this section, the 44.23 order is appealable to the Minnesota tax court under section 44.24 271.06. 44.25 Subd. 8. [APPEAL WHERE NO DETERMINATION.] If the 44.26 commissioner does not make a determination within six months of 44.27 the filing of an administrative appeal, the taxpayer may appeal 44.28 to tax court. 44.29 Subd. 9. [EXEMPTION FROM ADMINISTRATIVE PROCEDURE 44.30 ACT.] This section is not subject to chapter 14. 44.31 Sec. 23. [297F.23] [JUDICIAL REVIEW.] 44.32 In lieu of an administrative appeal under this chapter, a 44.33 person aggrieved by an order of the commissioner fixing a tax, 44.34 penalty, or interest under this chapter may, within 60 days from 44.35 the date of the notice of the order, appeal to the tax court in 44.36 the manner provided under section 271.06. 45.1 Sec. 24. [PURPOSE.] 45.2 It is the intent of the legislature to simplify Minnesota's 45.3 cigarette and tobacco products tax laws by consolidating and 45.4 recodifying tax administration and compliance provisions now 45.5 contained throughout Minnesota Statutes, chapter 297. Due to 45.6 the complexity of the recodification, prior provisions are 45.7 repealed on the effective date of the new provisions. The 45.8 repealed provisions, however, continue to remain in effect until 45.9 superseded by the analogous provision in the new law. 45.10 Sec. 25. [REPEALER.] 45.11 Minnesota Statutes 1996, sections 297.01; 297.02; 297.03; 45.12 297.031; 297.032; 297.04; 297.041; 297.05; 297.06; 297.07; 45.13 297.075; 297.08; 297.09; 297.10; 297.11; 297.12; 297.13; 297.21; 45.14 297.22; 297.23; 297.24; 297.25; 297.26; 297.31; 297.32; 297.321; 45.15 297.33; 297.335; 297.34; 297.35; 297.36; 297.37; 297.38; 45.16 297.385; 297.39; 297.40; 297.41; 297.42; 297.43; and 297.44, are 45.17 repealed. 45.18 Sec. 26. [EFFECTIVE DATE.] 45.19 Sections 1, 7, and 24 are effective the day following final 45.20 enactment. 45.21 Sections 2 to 6 and 8 to 12, 14, 19, 22, and 23 are 45.22 effective for returns, reports, taxes, or other payments first 45.23 becoming due on or after August 1, 1997. 45.24 Sections 13, 21, and 25 are effective August 1, 1997. 45.25 Sections 15 and 16 are effective for audits or 45.26 investigations initiated on or after August 1, 1997. 45.27 Section 17 is effective for returns becoming due on or 45.28 after August 1, 1997. 45.29 Section 18 is effective for interest on amounts first 45.30 becoming due to the commissioner on or after August 1, 1997. 45.31 Section 20 is effective for crimes committed on or after 45.32 August 1, 1997. 45.33 ARTICLE 2 45.34 CROSS-REFERENCE CORRECTIONS 45.35 Section 1. Minnesota Statutes 1996, section 16A.26, is 45.36 amended to read: 46.1 16A.26 [ONE DEPOSITORY ACCOUNT FOR EACH TAX.] 46.2 Notwithstanding sections297.13297F.10, 298.17, 298.282, 46.3 298.39, 298.396, 297C.02 to 297C.08 and similar laws to the 46.4 contrary relating to the depositing, disposition, or 46.5 apportionment of tax receipts, the commissioner may use one 46.6 depository account for each tax. To do so, there must be enough 46.7 information to identify and dispose of or apportion the tax 46.8 under law. The commissioner shall ask the appropriate officials 46.9 for the transfers and necessary certifications. The 46.10 commissioner may issue directives to carry out this section. 46.11 Sec. 2. Minnesota Statutes 1996, section 16A.661, 46.12 subdivision 3, is amended to read: 46.13 Subd. 3. [ESTABLISHMENT OF DEBT SERVICE FUND; 46.14 APPROPRIATION OF DEBT SERVICE FUND MONEY.] (a) There is 46.15 established within the state bond fund a separate and special 46.16 account designated as a general obligation special tax bond debt 46.17 service account. There must be credited to this debt service 46.18 account in each fiscal year from the tobacco tax revenue fund 46.19 established in section297.13297F.10 an amount sufficient to 46.20 increase the balance on hand in the debt service account on each 46.21 December 1 to an amount equal to the full amount of principal 46.22 and interest to come due on all outstanding bonds whose debt 46.23 service is payable primarily from proceeds of the tax to and 46.24 including the second following July 1. The money on hand in the 46.25 debt service account must be used solely for the payment of the 46.26 principal of, and interest on, the bonds, and is appropriated 46.27 for this purpose. This appropriation does not cancel as long as 46.28 any of the bonds remain outstanding. 46.29 (b) There is established within the state bond fund a 46.30 separate and special account designated as a general obligation 46.31 special tax bond debt service account. There must be credited 46.32 to this debt service account in each fiscal year from the sports 46.33 and health club sales tax revenue fund established in section 46.34 297A.44 an amount sufficient to increase the balance on hand in 46.35 the debt service account on each December 1 to an amount equal 46.36 to the full amount of principal and interest to come due on all 47.1 outstanding bonds whose debt service is payable primarily from 47.2 proceeds of the tax to and including the second following July 47.3 1. The money on hand in the debt service account must be used 47.4 solely for the payment of the principal of, and interest on, the 47.5 bonds, and is appropriated for this purpose. This appropriation 47.6 does not cancel as long as any of the bonds remain outstanding. 47.7 Sec. 3. Minnesota Statutes 1996, section 16A.6701, 47.8 subdivision 1, is amended to read: 47.9 Subdivision 1. [STATE LICENSE AND SERVICE FEES.] For 47.10 purposes of section 16A.67, subdivision 3, and this section, the 47.11 term "state license and service fees" means, and refers to, all 47.12 license fees, service fees, and charges imposed by law and 47.13 collected by any state officer, agency, or employee, which are 47.14 listed below or which are defined as departmental earnings under 47.15 section 16A.1285, subdivision 1, and the use of which is not 47.16 otherwise restricted by law, and which are not required to be 47.17 credited or transferred to a fund other than the general fund: 47.18 Minnesota Statutes 1994, sections 3.9221; 5.12; 5.14; 5.16; 47.19 5A.04; 6.58; 13.03, subdivision 10; 16A.155; 16A.48; 16A.54; 47.20 16A.72; 16B.59; 16B.70; 17A.04; 18.51, subdivision 2; 18.53; 47.21 18.54; 18C.551; 19.58; 19.64; 27.041, subdivision 2, clauses (d) 47.22 and (e); 27.07, subdivision 5; 28A.08; 32.071; 32.075; 32.392; 47.23 35.71; 35.824; 35.95; 41C.12; 45.027, subdivisions 3 and 6; 47.24 46.041, subdivision 1; 46.131, subdivisions 2, 7, 8, 9, and 10; 47.25 47.101, subdivision 2; 47.54, subdivisions 1 and 4; 47.62, 47.26 subdivision 4; 47.65; 48.475, subdivision 1; 48.61, subdivision 47.27 7; 48.93; 49.36, subdivision 1; 52.01; 52.203; 53.03, 47.28 subdivisions 1, 5, and 6; 53.09, subdivision 1; 53A.03; 53A.05, 47.29 subdivision 1; 53A.081, subdivision 3; 54.294, subdivision 1; 47.30 55.04, subdivision 2; 55.095; 56.02; 56.04; 56.10; 59A.03, 47.31 subdivision 2; 59A.06, subdivision 3; 60A.14, subdivisions 1 and 47.32 2; 60A.23, subdivision 8; 60K.19, subdivision 5; 65B.48, 47.33 subdivision 3; 70A.14, subdivision 4; 72B.04, subdivision 10; 47.34 79.251, subdivision 5; 80A.28, subdivisions 1, 2, 3, 4, 5, 6, 7, 47.35 7a, 8, and 9; 80C.04, subdivision 1; 80C.07; 80C.08, subdivision 47.36 1; 80C.16, subdivisions 2 and 3; 80C.18, subdivision 2; 82.20, 48.1 subdivision 8 and 9; 82A.04, subdivision 1; 82A.08, subdivision 48.2 2; 82A.16, subdivisions 2 and 6; 82B.09, subdivision 1; 83.23, 48.3 subdivisions 2, 3, and 4; 83.25, subdivisions 1 and 2; 83.26, 48.4 subdivision 2; 83.30, subdivision 2; 83.31, subdivision 2; 48.5 83.38, subdivision 2; 85.052; 85.053; 85.055; 88.79, subdivision 48.6 2; 89.035; 89.21; 115.073; 115.77, subdivisions 1 and 2; 116.41, 48.7 subdivision 2; 116C.69; 116C.712; 116J.9673; 125.08; 136C.04, 48.8 subdivision 9; 155A.045; 155A.16; 168.27, subdivision 11; 48.9 168.33, subdivisions 3 and 7; 168.54; 168.67; 168.705; 168A.152; 48.10 168A.29; 169.345; 171.06, subdivision 2a; 171.29, subdivision 2; 48.11 176.102; 176.1351; 176.181, subdivision 2a; 177.30; 181A.12; 48.12 183.545; 183.57; 184.28; 184.29; 184A.09; 201.091, subdivision 48.13 5; 204B.11; 207A.02; 214.06; 216C.261; 221.0355; 239.101; 48.14 240.06; 240.07; 240.08; 240.09; 240.10; 246.51; 270.69, 48.15 subdivision 2; 270A.07; 272.484; 296.06; 296.12; 296.17; 48.16297.04297F.03; 297.33; 299C.46; 299C.62; 299K.09; 299K.095; 48.17 299L.07; 299M.04; 300.49; 318.02; 323.44, subdivision 3; 48.18 325D.415; 326.22; 326.3331; 326.47; 326.50; 326.92, subdivisions 48.19 1 and 3; 327.33; 331A.02; 332.15, subdivisions 2 and 3; 332.17; 48.20 332.22, subdivision 1; 332.33, subdivisions 3 and 4; 332.54, 48.21 subdivision 7; 333.055; 333.20; 333.23; 336.9-413; 336A.04; 48.22 336A.05; 336A.09; 345.35; 345.43, subdivision 2a; 345.44; 48.23 345.55, subdivision 3; 347.33; 349.151; 349.161; 349.162; 48.24 349.163; 349.164; 349.165; 349.166; 349.167; 357.08; 359.01, 48.25 subdivision 3; 360.018; 360.63; 386.68; and 414.01, subdivision 48.26 11; Minnesota Statutes 1994, chapters 154; 216B; 237; 302A; 303; 48.27 308A; 317A; 322A; and 322B; Laws 1990, chapter 593; Laws 1993, 48.28 chapter 254, section 7; and Laws 1994, chapter 573, section 4; 48.29 Minnesota Rules, parts 1800.0500; 1950.1070; 2100.9300; 48.30 7515.0210; and 9545.2000 to 9545.2040. 48.31 Sec. 4. Minnesota Statutes 1996, section 116P.13, 48.32 subdivision 1, is amended to read: 48.33 Subdivision 1. [REVENUE SOURCES.] The money in the 48.34 Minnesota future resources fund consists of revenue credited 48.35 under section297.13297F.10, subdivision 1, paragraph (b), 48.36 clause (1). 49.1 Sec. 5. Minnesota Statutes 1996, section 325D.32, 49.2 subdivision 4, is amended to read: 49.3 Subd. 4. "Wholesaler" means and includes any person who 49.4 acquires cigarettes for the purpose of sale to retailers or to 49.5 other persons for resale, and who maintains an established place 49.6 of business when any part of the business is the sale of 49.7 cigarettes at wholesale to persons licensed to sell cigarettes 49.8 by the state or any municipality, and where at all times a stock 49.9 of cigarettes is available to retailers for resale, or any 49.10 cigarette manufacturer or manufacturer's representative who 49.11 sells to retailers or to other persons for resale, and any 49.12 person defined as a "distributor" under section297.01297F.01, 49.13 subdivision76. The term "wholesaler" shall also include a 49.14 "subjobber" as defined by section297.01297F.01, subdivision1449.15 19. This subdivision does not prohibit any person from engaging 49.16 in business as a retailer as defined in subdivision 5. 49.17 Sec. 6. Minnesota Statutes 1996, section 325D.415, is 49.18 amended to read: 49.19 325D.415 [CIGARETTE DISTRIBUTOR FEES.] 49.20 A cigarette distributor as defined in section297.0149.21 297F.01, subdivision76, shall pay to the commissioner an 49.22 annual fee as follows: 49.23 (1) a fee of $2,500 is due from those distributors whose 49.24 annual cigarette tax collections exceed $2,000,000; and 49.25 (2) a fee of $1,200 is due from those distributors whose 49.26 annual cigarette tax collections are $2,000,000 or less. 49.27 The annual fee must be paid by December 31 of each year. 49.28 If the fee is not paid when due, the commissioner shall revoke 49.29 or refuse to issue or renew the license under chapter 297. The 49.30 annual fee must be deposited into the general fund. 49.31 Sec. 7. [EFFECTIVE DATE.] 49.32 Sections 1 to 6 are effective August 1, 1997.