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SF 144

as introduced - 88th Legislature (2013 - 2014) Posted on 02/08/2013 08:49am

KEY: stricken = removed, old language. underscored = added, new language.

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Current Version - as introduced

1.1A bill for an act
1.2relating to state finance; increasing the rate of taxes on cigarettes and other
1.3tobacco products; providing for use of the proceeds;amending Minnesota
1.4Statutes 2012, sections 275.025, subdivision 1; 297F.05, subdivisions 1, 3, 4.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6    Section 1. Minnesota Statutes 2012, section 275.025, subdivision 1, is amended to read:
1.7    Subdivision 1. Levy amount. The state general levy is levied against
1.8commercial-industrial property and seasonal residential recreational property, as defined
1.9in this section. The state general levy base amount is $592,000,000 for taxes payable in
1.102002. For taxes payable in subsequent years, the levy base amount is increased each year
1.11by multiplying the levy base amount for the prior year by the sum of one plus the rate of
1.12increase, if any, in the implicit price deflator for government consumption expenditures
1.13and gross investment for state and local governments prepared by the Bureau of Economic
1.14Analysts of the United States Department of Commerce for the 12-month period ending
1.15March 31 of the year prior to the year the taxes are payable. The commissioner shall
1.16reduce the state general levy base amount under this section for any year that the current
1.17year aid percentage for the current fiscal year, under section 16A.152, subdivision 2, is
1.18equal to or greater than 70. The amount of the levy reduction is equal to the increase in
1.19cigarette and tobacco tax collections generated by:
1.20(1) increasing the cigarette tax rate under section 297F.05, subdivision 1, from 24 to
1.2188.5 mills on cigarettes weighing not more than three pounds per thousand;
1.22(2) increasing the tax rate under section 297F.05, subdivision 1, from 48 to 177 mills
1.23on cigarettes weighing more than three pounds per thousand; and
2.1(3) increasing the tax rate on tobacco products under section 297F.05, subdivision 3,
2.2from 35 to 47.5 percent of the wholesale price of the tobacco products.
2.3The tax under this section is not treated as a local tax rate under section 469.177 and
2.4is not the levy of a governmental unit under chapters 276A and 473F.
2.5The commissioner shall increase or decrease the preliminary or final rate for a year
2.6as necessary to account for errors and tax base changes that affected a preliminary or final
2.7rate for either of the two preceding years. Adjustments are allowed to the extent that the
2.8necessary information is available to the commissioner at the time the rates for a year must
2.9be certified, and for the following reasons:
2.10(1) an erroneous report of taxable value by a local official;
2.11(2) an erroneous calculation by the commissioner; and
2.12(3) an increase or decrease in taxable value for commercial-industrial or seasonal
2.13residential recreational property reported on the abstracts of tax lists submitted under
2.14section 275.29 that was not reported on the abstracts of assessment submitted under
2.15section 270C.89 for the same year.
2.16The commissioner may, but need not, make adjustments if the total difference in the tax
2.17levied for the year would be less than $100,000.
2.18EFFECTIVE DATE.This section is effective July 1, 2013.

2.19    Sec. 2. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read:
2.20    Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in
2.21this state, upon having cigarettes in possession in this state with intent to sell, upon any
2.22person engaged in business as a distributor, and upon the use or storage by consumers, at
2.23the following rates:
2.24(1) on cigarettes weighing not more than three pounds per thousand, 24 88.5 mills
2.25on each such cigarette; and
2.26(2) on cigarettes weighing more than three pounds per thousand, 48 177 mills on
2.27each such cigarette.
2.28EFFECTIVE DATE.This section is effective July 1, 2013.

2.29    Sec. 3. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read:
2.30    Subd. 3. Rates; tobacco products. A tax is imposed upon all tobacco products
2.31in this state and upon any person engaged in business as a distributor, at the rate of 35
2.32 47.5 percent of the wholesale sales price of the tobacco products. The tax is imposed at
2.33the time the distributor:
3.1(1) brings, or causes to be brought, into this state from outside the state tobacco
3.2products for sale;
3.3(2) makes, manufactures, or fabricates tobacco products in this state for sale in
3.4this state; or
3.5(3) ships or transports tobacco products to retailers in this state, to be sold by those
3.6retailers.
3.7EFFECTIVE DATE.This section is effective July 1, 2013.

3.8    Sec. 4. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read:
3.9    Subd. 4. Use tax; tobacco products. A tax is imposed upon the use or storage by
3.10consumers of tobacco products in this state, and upon such consumers, at the rate of 35
3.11 47.5 percent of the cost to the consumer of the tobacco products.
3.12EFFECTIVE DATE.This section is effective July 1, 2013.

3.13    Sec. 5. FLOOR STOCKS TAXES.
3.14    Subdivision 1. Cigarettes. (a) A floor stocks tax is imposed on every person
3.15engaged in business in this state as a distributor, retailer, subjobber, vendor, manufacturer,
3.16or manufacturer's representative of cigarettes, on the stamped cigarettes and unaffixed
3.17stamps in the person's possession or under the person's control at 12:01 a.m. on July 1,
3.182013. The tax is imposed at the following rates:
3.19    (1) on cigarettes weighing not more than three pounds per thousand, 64.5 mills on
3.20each cigarette; and
3.21    (2) on cigarettes weighing more than three pounds per thousand, 129 mills on each
3.22cigarette.
3.23    (b) Each distributor, on or before July 8, 2013, shall file a return with the
3.24commissioner of revenue, in the form the commissioner prescribes, showing the stamped
3.25cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount
3.26of tax due on the cigarettes and unaffixed stamps. The tax imposed by this section is
3.27due and payable by August 1, 2013, and after that date bears interest at the rate of one
3.28percent per month.
3.29(c) Each retailer, subjobber, vendor, manufacturer, or manufacturer's representative,
3.30on or before July 8, 2013, shall file a return with the commissioner in the form the
3.31commissioner prescribes, showing the cigarettes on hand at 12:01 a.m. on July 1, 2013, and
3.32the amount of tax due on the cigarettes. The tax imposed by this section is due and payable
3.33by August 1, 2013, and after that date bears interest at the rate of one percent per month.
4.1    Subd. 2. Tobacco products. (a) A floor stocks tax is imposed on every person
4.2engaged in business in this state as a distributor, retailer, subjobber, vendor, manufacturer,
4.3or manufacturer's representative of tobacco products, on the tobacco products in the
4.4person's possession or under the person's control at 12:01 a.m. on July 1, 2013. The tax is
4.5imposed at the rate of 12.5 percent of the wholesale sales price of the tobacco products.
4.6    (b) On or before July 8, 2013, each distributor, retailer, subjobber, vendor,
4.7manufacturer, or manufacturer's representative shall file a return with the commissioner of
4.8revenue, in the form the commissioner prescribes, showing the tobacco products on hand
4.9at 12:01 a.m. on July 1, 2013, and the amount of tax due on the tobacco products. The tax
4.10imposed by this section is due and payable by August 1, 2013, and after that date bears
4.11interest at the rate of one percent per month.
4.12    Subd. 3. Audit and enforcement. The taxes imposed by this section are subject
4.13to the audit, assessment, and collection provisions applicable to the taxes imposed under
4.14Minnesota Statutes, chapter 297F. The commissioner may require a distributor to receive
4.15and maintain copies of floor stock tax returns filed by all persons requesting a credit for
4.16returned cigarettes.
4.17    Subd. 4. Deposit of proceeds. The revenue from the taxes imposed under this
4.18section must be deposited by the commissioner in the state treasury and credited as
4.19provided in Minnesota Statutes, section 297F.10.
4.20EFFECTIVE DATE.This section is effective the day following final enactment.

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