SF 2195

as introduced - 90th Legislature (2017 - 2018) Posted on 03/21/2017 09:27am

A bill for an act
relating to taxation; tobacco; providing definitions and a tax rate for vapor products;
amending Minnesota Statutes 2016, sections 297F.01, subdivision 19, by adding
subdivisions; 297F.05, by adding subdivisions.

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

Section 1.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision
to read:

new text begin Subd. 6a. new text end

new text begin Bulk nicotine. new text end

new text begin "Bulk nicotine" means any vapor product that contains a
solution having a concentration of 50 milligrams of nicotine per milliliter or greater.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 6b. new text end

new text begin Consumable material. new text end

new text begin "Consumable material" means any vapor product that
contains nicotine in a solution having a concentration of less than 50 milligrams of nicotine
per milliliter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 297F.01, subdivision 19, is amended to read:

Subd. 19.

Tobacco products.

(a) "Tobacco products" means any product containing,
made, or derived from tobacco that is intended for human consumption, whether chewed,
smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or
any component, part, or accessory of a tobacco product, including, but not limited to, cigars;
cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking
tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing
tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, new text begin vapor products, new text end
and other kinds and forms of tobacco; but does not include cigarettes as defined in this
section. Tobacco products excludes any tobacco product that has been approved by the
United States Food and Drug Administration for sale as a tobacco cessation product, as a
tobacco dependence product, or for other medical purposes, and is being marketed and sold
solely for such an approved purpose.

(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4, tobacco
products includes a premium cigar, as defined in subdivision 13a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to
read:

new text begin Subd. 24. new text end

new text begin Vapor products. new text end

new text begin "Vapor products" means any noncombustible product that
employs a heating element, power source, electronic circuit, or other electronic, chemical,
or mechanical means, regardless of shape or size, that can be used to produce vapor from
nicotine in a solution or other form. Vapor products includes any electronic cigarette,
electronic cigar, electronic cigarillo, electronic pipe, or similar product or device and any
vapor cartridge or other container of bulk nicotine or consumable material in a solution or
other form that is intended to be used with or in an electronic cigarette, electronic cigar,
electronic cigarillo, electronic pipe, or similar product or device.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 297F.05, is amended by adding a subdivision to
read:

new text begin Subd. 3b. new text end

new text begin Rates; vapor products. new text end

new text begin (a) A tax is imposed upon all vapor products in this
state and upon any person engaged in business as a tobacco product distributor. The tax
imposed under this subdivision is imposed at the time the tobacco products distributor:
new text end

new text begin (1) brings, or causes to be brought, into this state vapor products for sale;
new text end

new text begin (2) makes, manufactures, or fabricates vapor products in this state, not otherwise taxed
under this subdivision, for sale in this state; or
new text end

new text begin (3) ships or transports vapor products to retailers in this state to be sold by those retailers.
new text end

new text begin (b) For vapor products that contain bulk nicotine, the rate of tax is 95 percent of the
wholesale sales price of the vapor product.
new text end

new text begin (c) For vapor products that contain consumable material, the rate of tax is 25 percent of
the wholesale sales price of the vapor product.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 297F.05, is amended by adding a subdivision to
read:

new text begin Subd. 4b. new text end

new text begin Use tax; vapor products. new text end

new text begin A tax is imposed upon the use or storage by
consumers of all vapor products in this state, and upon such consumers, at the rate of 95
percent of the wholesale sales price of a vapor product containing bulk nicotine, and 25
percent of the wholesale sales price of a vapor product containing consumable material.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end