3rd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; recodifying taxes on liquor; 1.3 providing civil and criminal penalties; appropriating 1.4 money; amending Minnesota Statutes 1996, sections 1.5 16A.26; 340A.301, subdivision 8; 340A.302, subdivision 1.6 1; 340A.414, subdivision 7; 340A.417; and 340A.7035; 1.7 proposing coding for new law as Minnesota Statutes, 1.8 chapter 297G; repealing Minnesota Statutes 1996, 1.9 sections 297C.01; 297C.02; 297C.03; 297C.04; 297C.045; 1.10 297C.05; 297C.06; 297C.07; 297C.08; 297C.09; 297C.10; 1.11 297C.11; 297C.12; 297C.13; 297C.14; 297C.16; and 1.12 297C.17. 1.13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.14 ARTICLE 1 1.15 RECODIFICATION 1.16 Section 1. [297G.01] [DEFINITIONS.] 1.17 Subdivision 1. [TERMS.] For purposes of this chapter, the 1.18 following terms have the meaning given them unless the language 1.19 or context clearly indicates that a different meaning is 1.20 intended. 1.21 Subd. 2. [ALCOHOLIC BEVERAGE.] "Alcoholic beverage" is any 1.22 beverage containing more than one-half of one percent alcohol by 1.23 volume. 1.24 Subd. 3. [BREWER.] "Brewer" is a person who manufactures 1.25 malt liquor for sale. 1.26 Subd. 4. [COLLECTOR.] "Collector" is a person who collects 1.27 commemorative bottles for their use and enjoyment as collector's 1.28 items and not for the consumption of the beverage contained in 1.29 them. The term does not include licensed wholesalers or 2.1 retailers of alcoholic beverages. 2.2 Subd. 5. [COMMEMORATIVE BOTTLES.] "Commemorative bottles" 2.3 are ceramic commemorative bottles or other specially designed 2.4 decanters which have value as collector's items and which 2.5 contain an alcoholic beverage. 2.6 Subd. 6. [COMMISSIONER.] "Commissioner" is the 2.7 commissioner of revenue. 2.8 Subd. 7. [DISTILLED SPIRITS.] "Distilled spirits" is 2.9 intoxicating liquors, including ethyl alcohol, hydrated oxide of 2.10 ethyl, spirits of wine, whiskey, rum, brandy, gin, and other 2.11 distilled spirits, including all dilutions and mixtures, for 2.12 nonindustrial use. 2.13 Subd. 8. [FERMENTED MALT BEVERAGES.] "Fermented malt 2.14 beverages" is any beer, ale, or other beverage made from malt by 2.15 fermentation and containing not less than one-half of one 2.16 percent alcohol by volume. 2.17 Subd. 9. [INTERNAL REVENUE CODE.] Unless specifically 2.18 defined otherwise, "Internal Revenue Code" means the Internal 2.19 Revenue Code of 1986, as amended through December 31, 1996. 2.20 Subd. 10. [INTOXICATING LIQUOR.] "Intoxicating liquor" is 2.21 ethyl alcohol, distilled spirits, fermented, spirituous, vinous, 2.22 and fermented malt beverages containing more than 3.2 percent of 2.23 alcohol by weight. 2.24 Subd. 11. [LIQUEUR-FILLED CANDY.] "Liqueur-filled candy" 2.25 is any confectionery containing more than one-half of one 2.26 percent alcohol by volume in liquid form that is intended for or 2.27 capable of beverage use. 2.28 Subd. 12. [LIQUOR ACT.] For purposes of this chapter, the 2.29 terms defined in section 340A.101, have the meanings given them 2.30 in that section except as provided in this section. 2.31 Subd. 13. [MANUFACTURER.] "Manufacturer" is a person who, 2.32 by a process of manufacturing, fermenting, brewing, distilling, 2.33 refining, rectifying, blending, or by the combination of 2.34 different materials, prepares or produces intoxicating liquor 2.35 for sale. 2.36 Subd. 14. [MINIATURES.] "Miniatures" are containers of 3.1 distilled spirits of two fluid ounces or less or 50 milliliters 3.2 or less. 3.3 Subd. 15. [PERSON.] "Person" means an individual or any 3.4 entity engaged in the sale of distilled spirits, wine, or 3.5 fermented malt beverages. 3.6 Subd. 16. [RETAILER.] "Retailer" means a person engaged in 3.7 this state in the business of selling, or offering to sell, 3.8 distilled spirits, wine, or fermented malt beverages. 3.9 Subd. 17. [TABLE OR SPARKLING WINE.] "Table or sparkling 3.10 wine" is a beverage made without rectification or fortification 3.11 and containing not more than 25 percent alcohol by volume and 3.12 made by the fermentation of grapes, grape juice, other fruits, 3.13 or honey. 3.14 Subd. 18. [3.2 PERCENT MALT LIQUOR.] "3.2 percent malt 3.15 liquor" is a fermented malt beverage containing not less than 3.16 one-half of one percent alcohol by volume nor more than 3.2 3.17 percent alcohol by weight. 3.18 Subd. 19. [WHOLESALER.] "Wholesaler" is a person who sells 3.19 alcoholic beverages to persons to whom sale is permitted under 3.20 section 340A.310, from a stock maintained in a warehouse in the 3.21 state. 3.22 Subd. 20. [WINE.] "Wine" is the product made from the 3.23 normal alcoholic fermentation of grapes, including still wine, 3.24 sparkling and carbonated wine, wine made from condensed grape 3.25 must, wine made from other agricultural products than sound ripe 3.26 grapes, imitation wine, compounds sold as wine, vermouth, cider, 3.27 perry, and sake, in each instance containing not less than 3.28 one-half of one percent nor more than 24 percent alcohol by 3.29 volume for nonindustrial use. Wine does not include distilled 3.30 spirits as defined in subdivision 7. 3.31 Sec. 2. [297G.02] [ADMINISTRATION.] 3.32 Subdivision 1. [ENFORCEMENT RESPONSIBILITY.] The 3.33 commissioners of public safety and revenue shall enforce and 3.34 administer the provisions of this chapter. 3.35 Subd. 2. [NONAPPLICABILITY.] This chapter does not apply 3.36 to: 4.1 (1) medicines intended for therapeutic purposes and not 4.2 intended as a beverage; 4.3 (2) industrial alcohol designed for mechanical, chemical, 4.4 scientific, pharmaceutical, or industrial purposes; or 4.5 (3) nonpotable compounds or preparations containing alcohol. 4.6 Subd. 3. [POWERS OF COMMISSIONER OF REVENUE.] The 4.7 commissioner, or duly authorized agents, may conduct 4.8 investigations, inquiries, and hearings under this chapter and, 4.9 in connection with such investigations, inquiries, and hearings, 4.10 the commissioner and the duly authorized agents shall have all 4.11 the powers conferred upon the commissioner and the 4.12 commissioner's examiners by section 270.06, and the provisions 4.13 of that section shall apply to all such investigations, 4.14 inquiries, and hearings. 4.15 Subd. 4. [EXPENSES OF ADMINISTRATION.] Expenses for the 4.16 administration of this chapter shall be paid out of 4.17 appropriations to the commissioner for the administration of 4.18 this chapter and shall include fees and expenses incurred by the 4.19 attorney general and any county attorney in litigation in 4.20 connection with the enforcement of this chapter. Expenses also 4.21 include all court costs and expenses. 4.22 Sec. 3. [297G.03] [DISTILLED SPIRITS AND WINE; RATE OF 4.23 TAX.] 4.24 Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 4.25 The following excise tax is imposed on all distilled spirits and 4.26 wine manufactured, imported, sold, or possessed in this state: 4.27 Standard Metric 4.28 (a) Distilled spirits, $5.03 per gallon $1.33 per liter 4.29 liqueurs, cordials, 4.30 and specialties regardless 4.31 of alcohol content 4.32 (excluding ethyl alcohol) 4.33 (b) Wine containing $ .30 per gallon $ .08 per liter 4.34 14 percent or less 4.35 alcohol by volume 4.36 (c) Wine containing $ .95 per gallon $ .25 per liter 5.1 more than 14 percent 5.2 but not more than 21 5.3 percent alcohol by volume 5.4 (d) Wine containing more $1.82 per gallon $ .48 per liter 5.5 than 21 percent but not 5.6 more than 24 percent 5.7 alcohol by volume 5.8 (e) Wine containing more $3.52 per gallon $ .93 per liter 5.9 than 24 percent alcohol 5.10 by volume 5.11 (f) Natural and $1.82 per gallon $ .48 per liter 5.12 artificial sparkling wines 5.13 containing alcohol 5.14 In computing the tax on a package of distilled spirits or 5.15 wine, a proportional tax at a like rate on all fractional parts 5.16 of a gallon or liter must be paid, except that the tax on a 5.17 fractional part of a gallon less than 1/16 of a gallon is the 5.18 same as for 1/16 of a gallon. 5.19 Subd. 2. [TAX ON MINIATURES; DISTILLED SPIRITS.] The tax 5.20 on miniatures is 14 cents per bottle. 5.21 Subd. 3. [TAX IS METRIC.] The metric tax is imposed on all 5.22 products taxable under this section when the net contents are 5.23 stated in metric units of measure. The commissioner may 5.24 establish by rule a date and procedure for the conversion of 5.25 excise tax computation and reporting from rates expressed in 5.26 gallons to rates expressed in metric volumes. The official 5.27 conversion factor is one liter equals 0.264172 United States 5.28 gallons. 5.29 Subd. 4. [BOTTLE TAX.] A tax of one cent is imposed on 5.30 each bottle or container of distilled spirits and wine except as 5.31 provided in 297G.07, subdivision 3. The wholesaler is 5.32 responsible for the payment of this tax when the bottles of 5.33 distilled spirits and wine are removed from inventory for sale, 5.34 delivery, or shipment. 5.35 Sec. 4. [297G.04] [FERMENTED MALT BEVERAGES; RATE OF TAX.] 5.36 Subdivision 1. [TAX IMPOSED.] The following excise tax is 6.1 imposed on all fermented malt beverages that are imported, 6.2 directly or indirectly sold, or possessed in this state: 6.3 (1) on fermented malt beverages containing not more than 6.4 3.2 percent alcohol by weight, $2.40 per 31-gallon barrel; 6.5 (2) on fermented malt beverages containing more than 3.2 6.6 percent alcohol by weight, $4.60 per 31-gallon barrel. 6.7 For fractions of a 31-gallon barrel, the tax rate is 6.8 calculated proportionally. 6.9 Subd. 2. [TAX CREDIT.] A qualified brewer producing 6.10 fermented malt beverages is entitled to a tax credit of $4.60 6.11 per barrel on 25,000 barrels sold in any fiscal year beginning 6.12 July 1, regardless of the alcohol content of the product. 6.13 Qualified brewers may take the credit on the 18th day of each 6.14 month, but the total credit allowed may not exceed in any fiscal 6.15 year the lesser of: 6.16 (1) the liability for tax; or 6.17 (2) $115,000. 6.18 For purposes of this subdivision, a "qualified brewer" 6.19 means a brewer, whether or not located in this state, 6.20 manufacturing less than 100,000 barrels of fermented malt 6.21 beverages in the calendar year immediately preceding the 6.22 calendar year for which the credit under this subdivision is 6.23 claimed. In determining the number of barrels, all brands or 6.24 labels of a brewer must be combined. All facilities for the 6.25 manufacture of fermented malt beverages owned or controlled by 6.26 the same person, corporation, or other entity must be treated as 6.27 a single brewer. 6.28 Sec. 5. [297G.05] [USE TAX; RATE OF TAX.] 6.29 Subdivision 1. [WINE AND DISTILLED SPIRITS.] A tax is 6.30 imposed on the use or storage by consumers of wine and distilled 6.31 spirits in this state, and on such consumers, at the rates 6.32 specified in section 297G.03, subdivision 1. 6.33 Subd. 2. [FERMENTED MALT BEVERAGES.] A tax is imposed on 6.34 the use or storage by consumers of fermented malt beverages in 6.35 this state, and on such consumers, at the rates specified in 6.36 section 297G.04, subdivision 1. 7.1 Subd. 3. [TAX PROVISIONS APPLICABLE TO CONSUMERS.] All of 7.2 the provisions of this chapter relating to the correction of 7.3 returns, deficiency assessments, protests, hearings, interest 7.4 and penalties, and collection of taxes, apply to consumers. 7.5 Sec. 6. [297G.06] [TAX AS PERSONAL DEBT.] 7.6 The tax imposed by this chapter, and interest and penalties 7.7 imposed with respect to it, is a personal debt of the person 7.8 required to file a return from the time the liability for it 7.9 arises, regardless of when the time for payment of the liability 7.10 occurs. In the case of the executor or administrator of the 7.11 estate of a decedent and in the case of any fiduciary, the debt 7.12 is that of the person in the person's official or fiduciary 7.13 capacity only, unless the person has voluntarily distributed the 7.14 assets held in that capacity without reserving sufficient assets 7.15 to pay the tax, interest, and penalties. In that case, the 7.16 person is personally liable for the deficiency. 7.17 Sec. 7. [297G.07] [EXEMPTIONS FROM TAX.] 7.18 Subdivision 1. [EXEMPTIONS.] The following are not subject 7.19 to the excise tax: 7.20 (1) Sales by a manufacturer, brewer, or wholesaler for 7.21 shipment outside the state in interstate commerce. 7.22 (2) Alcoholic beverages sold or transferred between 7.23 Minnesota wholesalers. 7.24 (3) Sales to common carriers engaged in interstate 7.25 transportation of passengers, except as provided in this chapter. 7.26 (4) Malt beverages served by a brewery for on-premise 7.27 consumption at no charge, or distributed to brewery employees 7.28 for on-premise consumption under a labor contract. 7.29 (5) Shipments of wine to Minnesota residents under section 7.30 340A.417. 7.31 (6) Fruit juices naturally fermented or beer naturally 7.32 brewed in the home for family use. 7.33 (7) Sales of wine for sacramental purposes under section 7.34 340A.316. 7.35 (8) Alcoholic beverages sold to authorized manufacturers of 7.36 food products or pharmaceutical firms. The alcoholic beverage 8.1 must be used exclusively in the manufacture of food products or 8.2 medicines. For purposes of this clause, "manufacturer" means a 8.3 person who manufactures food products intended for sale to 8.4 wholesalers or retailers for ultimate sale to the consumer. 8.5 (9) Liqueur-filled candy. 8.6 (10) Sales to a federal agency, that the state of Minnesota 8.7 is prohibited from taxing under the constitution or laws of the 8.8 United States or under the constitution of Minnesota. 8.9 (11) Sales to Indian tribes as defined in section 297G.08. 8.10 Subd. 2. [IMPORTATION BY INDIVIDUALS.] (a) A person, other 8.11 than a person under the age of 21 years, entering Minnesota from 8.12 another state may have in possession one liter of intoxicating 8.13 liquor or 288 ounces of fermented malt beverages without the 8.14 required payment of the Minnesota excise tax, provided the 8.15 alcoholic beverages accompany the person into this state and 8.16 will not be offered for sale or used for any commercial purposes. 8.17 (b) A person, other than a person under the age of 21 8.18 years, entering Minnesota from a foreign country may have in 8.19 possession four liters of intoxicating liquor or ten quarts (320 8.20 ounces) of fermented malt beverages without the required payment 8.21 of the Minnesota excise tax, provided the alcoholic beverages 8.22 accompany the person into this state and will not be offered for 8.23 sale or used for any commercial purposes. 8.24 (c) A collector of commemorative bottles, other than a 8.25 person under the age of 21 years, entering Minnesota from 8.26 another state may have in possession 12 or fewer commemorative 8.27 bottles without the required payment of the Minnesota excise tax. 8.28 (d) This subdivision does not apply to consignments of 8.29 alcoholic beverages shipped into this state by holders of 8.30 Minnesota import licenses or Minnesota manufacturers and 8.31 wholesalers when licensed by the commissioner of public safety 8.32 or to common carriers with licenses to sell intoxicating liquor 8.33 in more than one state. 8.34 Subd. 3. [EXEMPTIONS FROM BOTTLE TAX.] The following are 8.35 exempt from the bottle tax: 8.36 (1) miniatures of distilled spirits and wines; 9.1 (2) containers of fermented malt beverage; 9.2 (3) containers of intoxicating liquor or wine holding less 9.3 than 200 milliliters; 9.4 (4) containers of alcoholic beverages sold and shipped to 9.5 dealers, wineries, or distillers in other states; 9.6 (5) containers of alcoholic beverages sold to other 9.7 Minnesota wholesalers; 9.8 (6) containers of alcoholic beverages sold to common 9.9 carriers engaged in interstate commerce; 9.10 (7) containers of wine intended exclusively for sacramental 9.11 purposes; 9.12 (8) containers of alcoholic beverages sold to authorized 9.13 food processors or pharmaceutical firms for use exclusively in 9.14 the manufacturing of food products or medicines; and 9.15 (9) sales to a federal agency, that the state of Minnesota 9.16 is prohibited from taxing under the constitution or laws of the 9.17 United States or under the constitution of Minnesota. 9.18 Sec. 8. [297G.08] [SALES TO INDIAN TRIBES.] 9.19 Subdivision 1. [WHOLESALERS.] A wholesaler may set aside 9.20 the part of the wholesaler's stock necessary to make sales to 9.21 the established governing body of an Indian tribe recognized by 9.22 the United States Department of the Interior, without paying the 9.23 tax required by this chapter. The amount of untaxed stock that 9.24 wholesalers may deliver to an Indian reservation is limited to 9.25 amounts necessary to meet the personal consumption needs of 9.26 qualified purchasers. When shipping or delivering untaxed stock 9.27 to an Indian tribal organization, the wholesaler shall make a 9.28 true duplicate invoice. The invoice must show the complete 9.29 details of the sale or delivery. The wholesaler shall send the 9.30 duplicate to the commissioner not later than the 18th day of the 9.31 following calendar month. If a wholesaler fails to comply with 9.32 the requirements of this section, the commissioner shall revoke 9.33 the permission granted to the wholesaler to keep a stock of 9.34 untaxed goods. 9.35 Subd. 2. [RETAILERS.] Retailers who are Indian tribal 9.36 organizations may keep untaxed stock intended for sale to 10.1 qualified purchasers. 10.2 Subd. 3. [QUALIFIED PURCHASERS.] A qualified purchaser of 10.3 untaxed liquor means only an enrolled member of the Indian tribe 10.4 that is offering the liquor for sale. 10.5 Subd. 4. [SALES TO NONQUALIFIED BUYERS.] A retailer who 10.6 sells or otherwise disposes of untaxed liquor other than to a 10.7 qualified purchaser shall collect from the buyer or transferee 10.8 the tax imposed by this chapter and remit the tax to the 10.9 department of revenue at the same time and manner as required by 10.10 this chapter. If the retailer fails to collect the tax from the 10.11 buyer or transferee, or fails to remit the tax, the retailer is 10.12 personally responsible for the tax and the commissioner may 10.13 seize any liquor destined to be delivered to the retailer. The 10.14 procedures outlined in section 297G.20 apply to the seized 10.15 liquor. The proceeds of the sale of the liquor may be applied 10.16 to any tax liability owed by the retailer after deducting all 10.17 costs and expenses. 10.18 This section does not relieve the buyer or possessor of 10.19 untaxed liquor from personal liability for the tax. 10.20 Sec. 9. [297G.09] [RETURNS; PAYMENT OF TAX.] 10.21 Subdivision 1. [MONTHLY RETURNS; MANUFACTURERS, 10.22 WHOLESALERS, BREWERS, OR IMPORTERS.] On or before the 18th day 10.23 of each calendar month following the month in which a licensed 10.24 manufacturer or wholesaler first sells wine and distilled 10.25 spirits within the state, or a brewer or importer first sells or 10.26 imports fermented malt beverages, or a wholesaler knowingly 10.27 acquires title to or possession of untaxed fermented malt 10.28 beverages, the licensed manufacturer, wholesaler, brewer, or 10.29 importer liable for the excise tax must file a return with the 10.30 commissioner, and in addition must keep records and render 10.31 reports as required by the commissioner. Returns must be made 10.32 in a form and manner prescribed by the commissioner, and must 10.33 contain any other information required by the commissioner. 10.34 Returns must be accompanied by a remittance for the full unpaid 10.35 tax liability. Returns must be filed regardless of whether a 10.36 tax is due. 11.1 Subd. 2. [MONTHLY USE TAX RETURNS; CONSUMERS.] On or 11.2 before the 18th day of each calendar month, a consumer who has 11.3 acquired title to or possession of wine, distilled spirits, or 11.4 fermented malt beverages for use or storage in this state, upon 11.5 which wine, distilled spirits, or fermented malt beverages the 11.6 tax imposed by this chapter has not been paid, shall file a 11.7 return with the commissioner in the month following the month in 11.8 which the consumer obtains title to or possession of the wine, 11.9 distilled spirits, or fermented malt beverages. Returns must be 11.10 made in a form and manner prescribed by the commissioner and 11.11 must contain any other information required by the commissioner. 11.12 Returns must be accompanied by a remittance for the full unpaid 11.13 tax liability. 11.14 Subd. 3. [COMMON CARRIER RETURNS.] A common carrier 11.15 engaged in interstate transportation of passengers must file 11.16 monthly reports together with the tax payment on the sale of 11.17 alcoholic beverages sold in Minnesota. The report and payment 11.18 must be filed by the 18th day of the month following the month 11.19 in which the sale took place. A common carrier is permitted to 11.20 use a formula for the allocation of the total sales of alcoholic 11.21 beverages among states on the basis of passenger miles in each 11.22 state or some other method of allocation if written approval is 11.23 received from the commissioner. 11.24 Subd. 4. [EXTENSIONS.] When in the commissioner's 11.25 judgment, good cause exists, the commissioner may extend the 11.26 time for filing liquor tax returns for not more than six 11.27 months. The commissioner may require the taxpayer to file a 11.28 tentative return when the regularly required return is due, and 11.29 pay a tax on the basis of the tentative return at the times 11.30 required for the payment of taxes on the basis of the regularly 11.31 required return. 11.32 Subd. 5. [ACCELERATED TAX PAYMENT; PENALTY.] A person 11.33 liable for tax under this chapter having a liability of $120,000 11.34 or more during a fiscal year ending June 30, shall remit the 11.35 June liability for the next year in the following manner: 11.36 (a) Two business days before June 30 of the year, the 12.1 taxpayer shall remit the actual May liability and 75 percent of 12.2 the estimated June liability to the commissioner and file the 12.3 return in the form and manner prescribed by the commissioner. 12.4 (b) On or before August 18 of the year, the taxpayer shall 12.5 submit a return showing the actual June liability and pay any 12.6 additional amount of tax not remitted in June. A penalty is 12.7 imposed equal to ten percent of the amount of June liability 12.8 required to be paid in June less the amount remitted in June. 12.9 However, the penalty is not imposed if the amount remitted in 12.10 June equals the lesser of: 12.11 (1) 70 percent of the actual June liability; or 12.12 (2) 75 percent of the preceding May liability. 12.13 Subd. 6. [ELECTRONIC FUNDS TRANSFER.] A licensed brewer, 12.14 importer, or wholesaler having an excise tax liability of 12.15 $120,000 or more during a fiscal year ending June 30 must remit 12.16 all excise tax liabilities in the subsequent calendar year by 12.17 means of a funds transfer as defined in section 336.4A-104, 12.18 paragraph (a). The funds transfer payment date, as defined in 12.19 section 336.4A-401, must be on or before the date the excise tax 12.20 is due. If the date the excise tax is due is not a funds 12.21 transfer business day, as defined in section 336.4A-105, 12.22 paragraph (a), clause (4), the payment date must be on or before 12.23 the funds transfer business day next following the date the 12.24 excise tax is due. 12.25 Subd. 7. [ORDER PAYMENTS CREDITED.] All payments received 12.26 may, in the discretion of the commissioner, be credited first to 12.27 the oldest liability not secured by a judgment or lien, but in 12.28 all cases must be credited first to penalties, next to interest, 12.29 and then to the tax due. 12.30 Subd. 8. [INTEREST.] The amount of tax not timely paid, 12.31 together with any penalty imposed by this chapter, bears 12.32 interest at the rate specified in section 270.75 from the time 12.33 the tax should have been paid until paid. Any interest and 12.34 penalty is added to the tax and collected as a part of it. 12.35 Sec. 10. [297G.10] [DEPOSIT OF PROCEEDS.] 12.36 All tax revenues and other receipts payable to the state 13.1 under this chapter must be paid into the state treasury and 13.2 credited to the general fund. 13.3 Sec. 11. [297G.11] [INFORMATIONAL REPORTS.] 13.4 The following persons shall file with the commissioner a 13.5 monthly informational report in the form and manner prescribed 13.6 by the commissioner: 13.7 (1) a manufacturer, wholesaler, and importer licensed to 13.8 ship distilled spirits or wine into Minnesota; 13.9 (2) a person who manufactures distilled spirits or wine in 13.10 Minnesota; 13.11 (3) any other person who imports distilled spirits or wine 13.12 into Minnesota; 13.13 (4) a person who possesses, receives, stores, or warehouses 13.14 distilled spirits or wine in Minnesota, upon which the tax 13.15 imposed by this chapter has not been paid; and 13.16 (5) a person who possesses, receives, stores, or warehouses 13.17 distilled spirits or wine in Minnesota, which are required to 13.18 give bond as required by the Internal Revenue Code, subtitle E, 13.19 chapter 51. 13.20 No payment of any tax is required to be remitted with this 13.21 report. The report must be filed on or before the tenth day 13.22 following the end of each calendar month, regardless of whether 13.23 or not the person shipped, manufactured, possessed, received, 13.24 stored, or warehoused any distilled spirits or wine into or 13.25 within Minnesota during the previous month, unless the 13.26 commissioner determines that a longer filing period is 13.27 appropriate for a particular person. A person failing to file 13.28 this report is subject to the civil or criminal penalties 13.29 imposed by this chapter. 13.30 This section does not apply to the lawful importation of 13.31 wine and distilled spirits under section 297G.07, subdivision 2, 13.32 nor to any lawful manufacture of wine or distilled spirits 13.33 within the state for personal consumption. 13.34 Sec. 12. [297G.12] [REFUNDS.] 13.35 Subdivision 1. [OVERPAYMENT OF TAX.] An overpayment of the 13.36 tax imposed under this chapter may be refunded to the taxpayer, 14.1 provided that the claim for refund is filed within the time 14.2 prescribed under section 297G.16. 14.3 Subd. 2. [PRODUCTS DESTROYED.] The commissioner may refund 14.4 to a taxpayer the amount of tax paid under this chapter on 14.5 intoxicating liquor or fermented malt beverages which become 14.6 unfit for human consumption and are destroyed under an order by 14.7 a federal, state, or local agency while being held for sale by a 14.8 licensed retailer. The destruction must meet the requirements 14.9 of the environmental laws of this state. 14.10 Subd. 3. [WHOLESALER REFUND FOR BREAKAGE OF 14.11 INVENTORY.] The commissioner may refund to a wholesaler the 14.12 amount of tax paid under this chapter for the breakage of 14.13 inventory not subject to reimbursement from any insurance 14.14 proceeds. The commissioner may prescribe the method of proof 14.15 for obtaining the refund. 14.16 Subd. 4. [RETAILER REFUND FOR BREAKAGE OF INVENTORY.] 14.17 Refunds for breakage of inventory may be made to retailers only 14.18 if satisfactory proof is presented to the commissioner by the 14.19 wholesaler and the licensed retailer that the retailer was not 14.20 indemnified by insurance for the tax. The commissioner may 14.21 prescribe the method of proof required for obtaining the refund. 14.22 Subd. 5. [BAD DEBTS.] The commissioner may adopt rules 14.23 providing a refund of the tax paid under this chapter on 14.24 intoxicating liquor or wine if the tax paid qualifies as a bad 14.25 debt under section 166(a) of the Internal Revenue Code. 14.26 Subd. 6. [CREDIT AGAINST TAX.] The commissioner may credit 14.27 the amount determined under this section against taxes otherwise 14.28 payable under this chapter by the taxpayer. 14.29 Subd. 7. [SOURCE OF REFUND.] There is appropriated 14.30 annually from the general fund to the commissioner the sums 14.31 necessary to make the refunds provided by this section. 14.32 Sec. 13. [297G.13] [INSPECTION RIGHTS.] 14.33 The commissioner of public safety or the commissioner of 14.34 revenue, or their duly authorized employees, may, at any 14.35 reasonable time, without notice and without a search warrant, 14.36 enter in and upon a licensed premises, and examine the books, 15.1 papers, and records of a brewer, manufacturer, wholesaler, or 15.2 retailer for the purpose of determining whether the excise tax 15.3 has been paid, and may in addition inspect any premises where 15.4 fermented malt beverages are manufactured, sold, offered for 15.5 sale, possessed, or stored for the purpose of determining 15.6 whether the party is in full compliance with the provisions of 15.7 this chapter. 15.8 Sec. 14. [297G.14] [EXAMINATIONS AND AUDITS.] 15.9 Subdivision 1. [EXAMINATION OF THE TAXPAYER.] To determine 15.10 the accuracy of a return or report, or for the purpose of 15.11 collection, or in fixing liability or verifying information 15.12 regarding any tax under this chapter, the commissioner may make 15.13 reasonable examinations or investigations of a taxpayer's place 15.14 of business, tangible personal property, equipment, computer 15.15 systems and facilities, pertinent books, records, papers, 15.16 vouchers, computer printouts, accounts, and documents. 15.17 Subd. 2. [ACCESS TO RECORDS OF OTHER PERSONS IN CONNECTION 15.18 WITH THE EXAMINATION OF TAXPAYER.] When conducting an 15.19 investigation or an audit of a taxpayer, or for the purpose of 15.20 collection, or in fixing liability or verifying information 15.21 regarding any tax under this chapter, the commissioner may 15.22 examine, except where privileged by law, the relevant records 15.23 and files of a person, business, institution, financial 15.24 institution, state agency, agency of the United States 15.25 government, or agency of any other state where permitted by 15.26 statute, agreement, or reciprocity. The commissioner may compel 15.27 production of these records by subpoena. A subpoena may be 15.28 served directly by the commissioner. 15.29 Subd. 3. [POWER TO COMPEL TESTIMONY.] In the 15.30 administration of any tax under this chapter, the commissioner 15.31 may: 15.32 (1) administer oaths or affirmations and compel by subpoena 15.33 the attendance of witnesses, testimony, and the production of a 15.34 person's pertinent books, records, papers, and other data for 15.35 inspection and copying; 15.36 (2) examine under oath or affirmation any person regarding 16.1 the business of a taxpayer concerning any relevant matter 16.2 incident to the administration of any tax under this chapter. 16.3 The fees of witnesses required by the commissioner to attend a 16.4 hearing are equal to those allowed to witnesses appearing before 16.5 courts of this state. The fees must be paid in the manner 16.6 provided for the payment of other expenses incident to the 16.7 administration of any tax under this chapter; and 16.8 (3) in addition to other remedies that may be available, 16.9 bring an action in equity by the state against a taxpayer for an 16.10 injunction ordering the taxpayer to file a complete and proper 16.11 return or amended return. The district courts of this state 16.12 have jurisdiction over the action and disobedience of an 16.13 injunction issued under this clause may be punished as a 16.14 contempt of district court. 16.15 Subd. 4. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 16.16 IS KNOWN.] An investigation may extend to a person that the 16.17 commissioner determines has access to information that may be 16.18 relevant to the examination or investigation. When a subpoena 16.19 requiring the production of records as described in subdivision 16.20 4 is served on a third-party recordkeeper, written notice of the 16.21 subpoena must be mailed to the taxpayer and to any other person 16.22 who is identified in the subpoena. The notices must be given 16.23 within three days of the day on which the subpoena is served. 16.24 Notice to the taxpayer required by this section is sufficient if 16.25 it is mailed to the last address on record with the commissioner. 16.26 The provisions of this subdivision relating to notice to 16.27 the taxpayer or other parties identified in the subpoena do not 16.28 apply if there is reasonable cause to believe that the giving of 16.29 notice may lead to attempts to conceal, destroy, or alter 16.30 records relevant to the examination, to prevent the 16.31 communication of information from other persons through 16.32 intimidation, bribery, or collusion, or to flee to avoid 16.33 prosecution, testifying, or production of records. 16.34 Subd. 5. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 16.35 IS NOT KNOWN.] A subpoena that does not identify the person or 16.36 persons whose tax liability is investigated may be served only 17.1 if: 17.2 (1) the subpoena relates to the investigation of a 17.3 particular person or an ascertainable group or class of persons; 17.4 (2) there is reasonable basis for believing that the person 17.5 or group or class of persons may fail or may have failed to 17.6 comply with the tax laws administered by the commissioner; 17.7 (3) the information sought to be obtained from the 17.8 examination of the records, and the identity of the person or 17.9 persons with respect to whose liability the subpoena is issued, 17.10 is not readily available from other sources; 17.11 (4) the subpoena is clear and specific concerning the 17.12 information sought to be obtained; and 17.13 (5) the information sought to be obtained is limited solely 17.14 to the scope of the investigation. 17.15 The party served with a subpoena that does not identify the 17.16 person or persons with respect to whose tax liability the 17.17 subpoena is issued may, within 20 days after service of the 17.18 subpoena, petition the district court in the judicial district 17.19 in which that party is located for a determination concerning 17.20 whether the commissioner has complied with all the requirements 17.21 in clauses (1) to (5), and thus, whether the subpoena is 17.22 enforceable. If no petition is made by the party served within 17.23 the time prescribed, the subpoena has the effect of a court 17.24 order. 17.25 Subd. 6. [REQUEST BY TAXPAYER FOR SUBPOENA.] When the 17.26 commissioner has the power to issue a subpoena for investigative 17.27 or auditing purposes, the commissioner shall honor a reasonable 17.28 request by the taxpayer to issue a subpoena on the taxpayer's 17.29 behalf, if in connection with the investigation or audit. 17.30 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 17.31 SUBPOENA.] Disobedience of subpoenas issued under this section 17.32 shall be punished by the district court of the district in which 17.33 the party served with the subpoena is located, in the same 17.34 manner as contempt of the district court. 17.35 Subd. 8. [COST OF PRODUCTION OF RECORDS.] The cost of 17.36 producing records of a third party required by a subpoena must 18.1 be paid by the taxpayer, if the taxpayer requests the subpoena 18.2 to be issued, or if the taxpayer has the records available but 18.3 has refused to provide them to the commissioner. In other cases 18.4 when the taxpayer cannot produce records and the commissioner 18.5 then initiates a subpoena for third-party records, the 18.6 commissioner shall pay the reasonable cost of producing the 18.7 records. The commissioner may later assess the reasonable costs 18.8 against the taxpayer if the records contribute to the 18.9 determination of an assessment of tax against the taxpayer. 18.10 Subd. 9. [PHYSICAL INVENTORY.] The commissioner or the 18.11 commissioner's authorized agents may, as considered necessary, 18.12 require a manufacturer, wholesaler, or retailer to furnish a 18.13 physical inventory of all wine and distilled spirits in stock. 18.14 The inventory must contain the information that the commissioner 18.15 requests and must be certified by an officer of the corporation. 18.16 Sec. 15. [297G.15] [ASSESSMENTS.] 18.17 Subdivision 1. [GENERAL RULE.] The commissioner shall make 18.18 determinations, corrections, and assessments with respect to any 18.19 tax under this chapter, including interest, additions to taxes, 18.20 and assessable penalties. The commissioner may use statistical 18.21 or other sampling techniques consistent with generally accepted 18.22 auditing standards in examining returns or records and making 18.23 assessments. 18.24 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails 18.25 to file a required return, the commissioner, from information in 18.26 the commissioner's possession or obtainable by the commissioner, 18.27 may make a return for the taxpayer. The return is prima facie 18.28 correct and valid. 18.29 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 18.30 TAXPAYER.] (a) When a return has been filed and the commissioner 18.31 determines that the tax disclosed by the return is different 18.32 than the tax determined by the examination, the commissioner 18.33 shall send an order of assessment to the taxpayer. When no 18.34 return has been filed, the commissioner may make a return for 18.35 the taxpayer under subdivision 2 or may send an order of 18.36 assessment under this subdivision. The order must explain the 19.1 basis for the assessment and must explain the taxpayer's appeal 19.2 rights. An order of assessment is final when made but may be 19.3 reconsidered by the commissioner under this chapter. 19.4 (b) The taxes are considered assessed when the commissioner 19.5 has prepared a notice of tax assessment and mailed it to the 19.6 person required to file a return to the post office address 19.7 given in the return. The notice of tax assessment must be sent 19.8 by mail to the post office address given in the return and the 19.9 record of the mailing is presumptive evidence of the giving of 19.10 notice, and such records must be preserved by the commissioner. 19.11 (c) No collection action can be taken, including the filing 19.12 of liens under section 270.69, and no late payment penalty under 19.13 this chapter is imposed when a return has been filed for the 19.14 taxable period upon which the order is based, if the amount 19.15 shown on the order is paid to the commissioner: 19.16 (1) within 60 days after the order has been mailed to the 19.17 taxpayer by the commissioner; or 19.18 (2) if an administrative appeal is filed under this 19.19 chapter, or a tax court appeal is filed under chapter 271, 19.20 within 60 days following final determination of the appeal if 19.21 the appeal is based upon a constitutional challenge to the tax, 19.22 and if not, when the decision of the tax court is made. 19.23 Subd. 4. [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 19.24 refund or credit is considered an underpayment of tax on the 19.25 date made. An assessment of a deficiency arising out of an 19.26 erroneous refund or credit must be made within 3-1/2 years from 19.27 the date prescribed for filing the return, plus any extension of 19.28 time granted for filing the return, but only if filed within the 19.29 extended time, or two years from the time the tax is paid in 19.30 full, whichever period expires later. 19.31 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or 19.32 assessment of tax made by the commissioner is prima facie 19.33 correct and valid. The taxpayer has the burden of establishing 19.34 its incorrectness or invalidity in any related action or 19.35 proceeding. 19.36 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The 20.1 commissioner, on examining returns of a taxpayer for more than 20.2 one year or period, may issue one order covering the period 20.3 under examination that reflects the aggregate refund or 20.4 additional tax due. 20.5 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment, 20.6 sent postage prepaid by United States mail to the taxpayer at 20.7 the taxpayer's last known address, is sufficient even if the 20.8 taxpayer is deceased or is under a legal disability, or, in the 20.9 case of a corporation, has terminated its existence, unless the 20.10 department has been provided with a new address by a party 20.11 authorized to receive notices of assessment. 20.12 Sec. 16. [297G.16] [STATUTES OF LIMITATIONS.] 20.13 Subdivision 1. [GENERAL RULE.] Except as otherwise 20.14 provided in this chapter, the amount of any tax due must be 20.15 assessed within 3-1/2 years after a return is filed. 20.16 Subd. 2. [DATE OF FILING.] For the purposes of this 20.17 section, a return filed before the last day prescribed by law 20.18 for filing is considered filed on the last day. 20.19 Subd. 3. [FALSE OR FRAUDULENT RETURN OR CLAIM FOR REFUND; 20.20 NO RETURN.] When a person required to file a return under this 20.21 chapter files a false or fraudulent return or claim for refund, 20.22 or fails to file a return, the tax may be assessed, and a 20.23 proceeding in court for the collection of such tax may be begun 20.24 at any time. 20.25 Subd. 4. [OMISSION IN EXCESS OF 25 PERCENT.] If a person 20.26 required to file a return omits from the return an amount 20.27 properly includable in it that is in excess of 25 percent of the 20.28 amount of tax reported in the return, the tax may be assessed, 20.29 or a proceeding in court for the collection of the tax may be 20.30 begun, at any time within 6-1/2 years after the return was filed. 20.31 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise 20.32 provided in this chapter, a claim for a refund of an overpayment 20.33 of tax must be filed within 3-1/2 years from the date prescribed 20.34 for filing the return, plus any extension of time granted for 20.35 filing the return, but only if filed within the extended time, 20.36 or two years from the time the tax is paid in full, whichever 21.1 period expires later. Claimants under this section are subject 21.2 to the notice requirements of section 289A.38, subdivision 7. 21.3 Subd. 6. [TIME LIMIT FOR A DESTRUCTION ORDER REFUND.] 21.4 Claims for refund under section 297G.12, subdivision 2, must be 21.5 filed with the commissioner within one year from the date of the 21.6 breakage or destruction order. 21.7 Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 21.8 refund must be filed with the commissioner within one year of 21.9 the filing of the taxpayer's income tax return containing the 21.10 bad debt deduction that is being claimed. 21.11 Subd. 8. [CONSENT TO EXTEND TIME.] If, before the 21.12 expiration of the time prescribed in this chapter for the 21.13 assessment of the tax, the commissioner and the person filing 21.14 the return consent in writing to an extension of time for the 21.15 assessment of the tax, the tax may be assessed at any time 21.16 before the expiration of the period agreed upon. The period so 21.17 agreed upon may be extended by subsequent agreements in writing 21.18 made before the expiration of the period previously agreed upon. 21.19 Subd. 9. [BANKRUPTCY; SUSPENSION OF TIME.] The running of 21.20 the period during which a tax must be assessed or collection 21.21 proceedings commenced is suspended during the period from the 21.22 date of a filing of a petition in bankruptcy until 30 days after 21.23 either notice to the commissioner that the bankruptcy 21.24 proceedings have been closed or dismissed, or the automatic stay 21.25 has been terminated or has expired, whichever occurs first. 21.26 The suspension of the statute of limitations under this 21.27 section applies to the person the petition in bankruptcy is 21.28 filed against and other persons who may also be wholly or 21.29 partially liable for the tax. 21.30 Sec. 17. [297G.17] [INTEREST.] 21.31 Subdivision 1. [INTEREST RATE.] When interest is required 21.32 under this section, interest is computed at the rate specified 21.33 in section 270.75. 21.34 Subd. 2. [LATE PAYMENT.] If a tax under this chapter is 21.35 not paid within the time named by law for payment, the unpaid 21.36 tax bears interest from the date the tax should have been paid 22.1 until the date the tax is paid. 22.2 Subd. 3. [EXTENSIONS.] When an extension of time for 22.3 payment has been granted, interest must be paid from the date 22.4 the payment should have been made, if no extension had been 22.5 granted, until the date the tax is paid. 22.6 Subd. 4. [ADDITIONAL ASSESSMENTS.] When a taxpayer is 22.7 liable for additional taxes because of a redetermination by the 22.8 commissioner, or for any other reason, the additional taxes bear 22.9 interest from the time the tax should have been paid, without 22.10 regard to an extension allowed, until the date the tax is paid. 22.11 Subd. 5. [ERRONEOUS REFUNDS OR CREDITS.] In the case of an 22.12 erroneous refund or credit, interest begins to accrue from the 22.13 date the refund or credit was paid unless the erroneous refund 22.14 or credit results from a mistake of the department, in which 22.15 case no interest or penalty is imposed, unless the deficiency 22.16 assessment is not satisfied within 60 days of the order. 22.17 Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section 22.18 549.09, if judgment is entered in favor of the commissioner with 22.19 regard to any tax under this chapter, the judgment bears 22.20 interest at the rate given in section 270.75 from the date the 22.21 judgment is entered until the date of payment. 22.22 Subd. 7. [INTEREST ON PENALTIES.] (a) A penalty imposed 22.23 under section 297G.18, subdivisions 2 to 7, bears interest from 22.24 the date the return or payment was required to be filed or paid, 22.25 including any extensions, to the date of payment of the penalty. 22.26 (b) A penalty not included in paragraph (a) bears interest 22.27 only if it is not paid within ten days from the date of the 22.28 notice. In that case interest is imposed from the date of 22.29 notice to the date of payment. 22.30 Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid 22.31 on an overpayment refunded or credited to the taxpayer from the 22.32 date of payment of the tax until the date the refund is paid or 22.33 credited. 22.34 Sec. 18. [297G.18] [CIVIL PENALTIES.] 22.35 Subdivision 1. [GENERAL RULE.] The commissioner may 22.36 recover the amount of any tax due under this chapter, as well as 23.1 any interest and penalty in a civil action. The collection of a 23.2 tax, interest, or penalty does not bar any prosecution under 23.3 this chapter. 23.4 Subd. 2. [PENALTY FOR FAILURE TO PAY TAX.] If a tax 23.5 imposed by this chapter is not paid within the time specified 23.6 for payment, a penalty is added to the amount required to be 23.7 shown as tax. The penalty is five percent of the tax not paid 23.8 on or before the date specified for payment of the tax if the 23.9 failure is for not more than 30 days, with an additional penalty 23.10 of five percent of the amount of tax remaining unpaid during 23.11 each additional 30 days or fraction of 30 days during which the 23.12 failure continues, not exceeding 15 percent in the aggregate. 23.13 Subd. 3. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 23.14 a taxpayer fails to make and file a return within the time 23.15 prescribed, including any extension, a penalty of five percent 23.16 of the amount of tax not timely paid is added to the tax. If no 23.17 tax is due, a penalty of $25 is assessed for each unfiled return. 23.18 Subd. 4. [COMBINED PENALTIES.] When penalties are imposed 23.19 under subdivisions 2 and 3, the penalties combined must not 23.20 exceed 38 percent in the aggregate. 23.21 Subd. 5. [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR 23.22 RULES.] If part of an additional assessment is due to negligence 23.23 or intentional disregard of the provisions of the applicable tax 23.24 laws or rules of the commissioner, but without an intent to 23.25 defraud, there must be added to the tax an amount equal to ten 23.26 percent of the additional assessment. 23.27 Subd. 6. [PENALTY FOR REPEATED FAILURES TO FILE OR PAY 23.28 TAXES.] If there is a pattern by a person of repeated failures 23.29 to timely file returns or timely pay taxes, and written notice 23.30 is given that a penalty will be imposed if such failures 23.31 continue, a penalty of 25 percent of the amount of tax not 23.32 timely paid as a result of each such subsequent failure is added 23.33 to the tax. The penalty can be abated under the abatement 23.34 authority in section 270.07, subdivisions 1, paragraph (e), and 23.35 6. 23.36 Subd. 7. [PENALTY FOR FALSE OR FRAUDULENT RETURN; 24.1 EVASION.] If a person files a false or fraudulent return, or 24.2 attempts in any manner to evade or defeat a tax or payment of 24.3 tax, there is imposed on the person a penalty equal to 50 24.4 percent of the tax due for the period to which the return 24.5 related, less amounts paid by the person on the basis of the 24.6 false or fraudulent return. 24.7 Subd. 8. [REVOCATION OR SUSPENSION OF LICENSE.] The 24.8 commissioner may certify to the commissioner of public safety 24.9 any failure to pay taxes when due as a violation of the statute 24.10 relating to the sale of intoxicating liquor for possible 24.11 revocation or suspension of license. 24.12 Subd. 9. [FAILURE TO FILE INFORMATIONAL RETURNS.] A person 24.13 required to file informational returns or reports that fails to 24.14 do so as required by this chapter is assessed a $25 penalty for 24.15 each month the return remains unfiled. 24.16 Subd. 10. [PAYMENT OF PENALTIES.] The penalties imposed by 24.17 this section are collected and paid in the same manner as taxes. 24.18 Subd. 11. [PENALTIES ARE ADDITIONAL.] The civil penalties 24.19 imposed by this section are in addition to the criminal 24.20 penalties imposed by this chapter. 24.21 Sec. 19. [297G.19] [CRIMINAL PENALTIES.] 24.22 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 24.23 A person required to file a return, report, or other document 24.24 with the commissioner who fails to do so is guilty of a 24.25 misdemeanor. 24.26 (b) A person required to pay or to collect and remit a tax 24.27 under this chapter, who fails to do so when required, is guilty 24.28 of a misdemeanor. 24.29 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR 24.30 PAY.] (a) A person required to file a return, report, or other 24.31 document with the commissioner, who knowingly, rather than 24.32 accidentally, inadvertently, or negligently, fails to file it 24.33 when required, is guilty of a gross misdemeanor. 24.34 (b) A person required to pay or to collect and remit a tax 24.35 under this chapter, who knowingly, rather than accidentally, 24.36 inadvertently, or negligently, fails to file it when required, 25.1 is guilty of a gross misdemeanor. 25.2 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 25.3 person who files with the commissioner a return, report, or 25.4 other document, known by the person to be fraudulent or false 25.5 concerning a material matter, is guilty of a felony. 25.6 (b) A person who knowingly aids or assists in, or advises 25.7 in the preparation or presentation of a return, report, or other 25.8 document that is fraudulent or false concerning a material 25.9 matter, whether or not the falsity or fraud is committed with 25.10 the knowledge or consent of the person authorized or required to 25.11 present the return, report, or other document, is guilty of a 25.12 felony. 25.13 Subd. 4. [IMPORTATION FROM ANOTHER STATE.] (a) A person 25.14 entering Minnesota from another state who imports or possesses 25.15 more than one liter, but fewer than 25 liters of untaxed 25.16 intoxicating liquor, or more than 288 ounces (nine quarts), but 25.17 fewer than 6,800 ounces (225 quarts) of untaxed fermented malt 25.18 beverages is guilty of a misdemeanor. 25.19 (b) A person entering Minnesota from another state who 25.20 imports or possesses 25 liters or more, but fewer than 225 25.21 liters of untaxed intoxicating liquor, or 6,800 ounces (225 25.22 quarts) or more, but fewer than 34,000 ounces (1,225 quarts) of 25.23 untaxed fermented malt beverages is guilty of a gross 25.24 misdemeanor. 25.25 (c) A person entering Minnesota from another state who 25.26 imports or possesses 225 liters or more of untaxed intoxicating 25.27 liquor, or 34,000 ounces (1,225 quarts) or more of untaxed 25.28 fermented malt beverages is guilty of a felony. 25.29 Subd. 5. [IMPORTATION FROM A FOREIGN COUNTRY.] (a) A 25.30 person entering Minnesota from a foreign country who imports or 25.31 possesses more than four liters, but fewer than 100 liters of 25.32 untaxed intoxicating liquor, or more than 320 ounces (ten 25.33 quarts), but fewer than 8,000 ounces (250 quarts) of untaxed 25.34 fermented malt beverages is guilty of a misdemeanor. 25.35 (b) A person entering Minnesota from a foreign country who 25.36 imports or possesses 100 liters or more, but fewer than 500 26.1 liters of untaxed intoxicating liquor, or 8,000 ounces (250 26.2 quarts) or more, but fewer than 40,000 ounces (1,250 quarts) of 26.3 untaxed fermented malt beverages is guilty of a gross 26.4 misdemeanor. 26.5 (c) A person entering Minnesota from a foreign country who 26.6 imports or possesses 500 liters or more of untaxed intoxicating 26.7 liquor, or 40,000 ounces (1,250 quarts) or more of untaxed 26.8 fermented malt beverages is guilty of a felony. 26.9 Subd. 6. [PENALTIES ARE ADDITIONAL.] Criminal penalties 26.10 imposed by this section are in addition to any civil penalties 26.11 imposed by this chapter. 26.12 Subd. 7. [OTHER PENALTIES.] Any violation of this chapter 26.13 unless otherwise specified is a misdemeanor. 26.14 Subd. 8. [STATUTE OF LIMITATIONS.] Notwithstanding section 26.15 628.26, or any other provision of the criminal laws of this 26.16 state, an indictment may be found and filed, or a complaint 26.17 filed, upon a criminal offense named in this section, in the 26.18 proper court within six years after the offense is committed. 26.19 Sec. 20. [297G.20] [CONTRABAND.] 26.20 Subdivision 1. [CONTRABAND DEFINED.] The following are 26.21 declared to be contraband and therefore subject to civil and 26.22 criminal penalties and seizure under this chapter: 26.23 (1) All distilled spirits, wine, and fermented malt 26.24 beverages possessed or held with intent to sell without payment 26.25 of an excise tax. 26.26 (2) All distilled spirits, wine, and fermented malt 26.27 beverages sold without payment of an excise tax. 26.28 (3) All distilled spirits, wine, and fermented malt 26.29 beverages transported without payment of an excise tax. 26.30 (4) Devices including, but not limited to, motor vehicles, 26.31 trailers, snowmobiles, airplanes, and boats used with the 26.32 knowledge of the owner, or of a person operating with the 26.33 consent of the owner, for the storage or transportation of 26.34 distilled spirits, wine, and fermented malt beverages which are 26.35 contraband under this subdivision. 26.36 Subd. 2. [EXCEPTION.] When distilled spirits, wine, and 27.1 fermented malt beverages are being transported in the course of 27.2 interstate commerce, or are in movement from either a public 27.3 warehouse to a wholesaler upon orders from a manufacturer or 27.4 wholesaler, or from one wholesaler to another, the distilled 27.5 spirits, wine, and fermented malt beverages are not contraband, 27.6 notwithstanding the provisions of subdivision 1. 27.7 Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented 27.8 malt beverages, or other property made contraband by subdivision 27.9 1 may be seized by the commissioner of revenue or public safety 27.10 and their authorized agents or by any sheriff or other police 27.11 officer, with or without process, and are subject to forfeiture 27.12 as provided in subdivisions 4 and 5. 27.13 Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 27.14 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 27.15 seizure of alleged contraband, the person making the seizure 27.16 shall make available an inventory of the property seized to the 27.17 person from whom the the property was seized, if known, and file 27.18 a copy with both the commissioners of revenue and public safety. 27.19 Within ten days after the date of service of the inventory, the 27.20 person from whom the property was seized or any person claiming 27.21 an interest in the property may file with the seizing authority 27.22 a demand for judicial determination of whether the property was 27.23 lawfully subject to seizure and forfeiture. Within 60 days 27.24 after the date of the filing of the demand, the seizing 27.25 authority must bring an action in the district court of the 27.26 county where seizure was made to determine the issue of 27.27 forfeiture. 27.28 (b) The action must be brought in the name of the state and 27.29 must be prosecuted by the county attorney or by the attorney 27.30 general. The court shall hear the action without a jury and 27.31 determine the issues of fact and law involved. 27.32 (c) If a judgment of forfeiture is entered, the seizing 27.33 authority may, unless the judgment is stayed pending an appeal, 27.34 either: 27.35 (1) cause the forfeited property to be destroyed; or 27.36 (2) cause it to be sold at a public auction as provided by 28.1 law. 28.2 (d) If demand for judicial determination is made and no 28.3 action is commenced by the seizing authority as provided in this 28.4 subdivision, the property must be released by the seizing 28.5 authority and delivered to the person entitled to it. If no 28.6 demand is made, the property seized is considered forfeited to 28.7 the seizing authority by operation of law and may be disposed of 28.8 by the seizing authority as provided for a judgment of 28.9 forfeiture. When the seizing authority is satisfied that a 28.10 person from whom property is seized was acting in good faith and 28.11 without intent to evade the tax imposed by this chapter, the 28.12 seizing authority shall release the property seized without 28.13 further legal proceedings. 28.14 Subd. 5. [DISPOSAL.] (a) The property described in 28.15 subdivision 1, clause (4), must be confiscated after conviction 28.16 of the person from whom it was seized, upon compliance with the 28.17 following procedure: the seizing authority shall file with the 28.18 court a separate complaint against the property, describing it 28.19 and charging its use in the specific violation, and specifying 28.20 substantially the time and place of the unlawful use. A copy of 28.21 the complaint must be served upon the defendant or person in 28.22 charge of the seizure, if any. 28.23 (b) If the person arrested is acquitted, the court shall 28.24 dismiss the complaint against the property and order it returned 28.25 to the persons legally entitled to it. Upon conviction of the 28.26 person arrested, the court shall issue an order directed to any 28.27 person known or believed to have any right, title, or interest 28.28 in, or lien upon, any of the property, and to persons unknown 28.29 claiming any right, title, interest, or lien in it, describing 28.30 the property and (1) stating that it was seized and that a 28.31 complaint against it, charging the specified violation, has been 28.32 filed with the court, (2) requiring the persons to file with the 28.33 court administrator their answer to the complaint, setting forth 28.34 any claim they may have to any right or title to, interest in, 28.35 or lien upon the property, within 30 days after the service of 28.36 the order, and (3) notifying them in substance that if they fail 29.1 to file their answer within the time, the property will be 29.2 ordered sold by the seizing authority. 29.3 (c) The court shall cause the order to be served upon any 29.4 person known or believed to have any right, title, interest, or 29.5 lien as in the case of a summons in a civil action, and upon 29.6 unknown persons by publication, as provided for service of 29.7 summons in a civil action. If an answer is filed within the 29.8 time provided, the court shall fix a time for hearing, which 29.9 must not be less than ten nor more than 30 days after the time 29.10 for filing the answer expires. If no answer is filed within the 29.11 time prescribed, upon affidavit by the court administrator, 29.12 setting forth the fact, the court shall order the property sold 29.13 by the seizing authority. Seventy-five percent of the proceeds 29.14 of the sale of forfeited property, after payment of seizure, 29.15 storage, forfeiture, and sale expenses, must be forwarded to the 29.16 seizing authority for deposit as a supplement to its operating 29.17 fund or similar fund for official use, and 25 percent must be 29.18 forwarded to the county attorney or other prosecuting agency 29.19 that handled the forfeiture for deposit as a supplement to its 29.20 operating fund or similar fund for prosecutorial purposes. 29.21 (d) At the time fixed for hearing, unless continued for 29.22 cause, the matter must be heard and determined by the court, 29.23 without a jury as in other civil actions. If the court finds 29.24 that the property, or any part of it, was used in the violation 29.25 specified in the complaint, it shall order the unlawfully used 29.26 property sold as provided by law, unless the owner shows to the 29.27 satisfaction of the court that the owner had no notice or 29.28 knowledge or reason to believe that the property was used or 29.29 intended to be used in the violation. The officer making a 29.30 sale, after deducting the expense of keeping the property, the 29.31 fee for seizure, and the costs of the sale, shall pay all liens 29.32 according to their priority, which are established at the 29.33 hearing as being bona fide and as existing without the lienor 29.34 having any notice or knowledge that the property was being used 29.35 or was intended to be used for or in connection with the 29.36 violation specified in the order of the court, and shall pay the 30.1 balance of the proceeds to the seizing authority for official 30.2 use and sharing in the manner provided in paragraph (a). A sale 30.3 under this section frees the property from all liens on it. 30.4 Appeal from the order of the district is available as in other 30.5 civil cases. 30.6 (e) At any time after seizure of the articles specified in 30.7 this subdivision, and before the hearing provided for, the 30.8 property must be returned to the owner or person having a legal 30.9 right to its possession, upon execution of a good and valid bond 30.10 to the state, with corporate surety, in the sum of at least $100 30.11 and not more than double of the value of the property seized, to 30.12 be approved by the court in which the case is triable, or a 30.13 judge of it, conditioned to abide any order and the judgment of 30.14 the court, and to pay the full value of the property at the time 30.15 of the seizure. The seizing authority may dismiss the 30.16 proceedings outlined in this subdivision when the seizing 30.17 authority considers it in the public interest to do so. 30.18 Sec. 21. [297G.21] [ADMINISTRATIVE REVIEW.] 30.19 Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] A 30.20 taxpayer may obtain reconsideration by the commissioner of an 30.21 order assessing any tax imposed by this chapter, a denial of a 30.22 request for abatement of penalty, or a denial of a claim for 30.23 refund by filing an administrative appeal under subdivision 3. 30.24 A taxpayer cannot obtain reconsideration under this section if 30.25 the action taken by the commissioner is the outcome of an 30.26 administrative appeal. 30.27 Subd. 2. [NOTICE DATE.] For purposes of this section, the 30.28 term "notice date" means the date of the order adjusting the tax 30.29 or order denying a request for abatement, or, in the case of a 30.30 denied refund, the date of the notice of denial. 30.31 Subd. 3. [TIME AND CONTENT FOR ADMINISTRATIVE APPEAL.] 30.32 Within 60 days after the notice date, the taxpayer must file a 30.33 written appeal with the commissioner. The appeal need not be in 30.34 any particular form but must contain the following information: 30.35 (1) the name and address of the taxpayer; 30.36 (2) if a corporation, the state of incorporation of the 31.1 taxpayer, and the principal place of business of the 31.2 corporation; 31.3 (3) the Minnesota identification number or social security 31.4 number of the taxpayer; 31.5 (4) the type of tax involved; 31.6 (5) the date; 31.7 (6) the tax years or periods involved and the amount of tax 31.8 involved for each year or period; 31.9 (7) the findings in the notice that the taxpayer disputes; 31.10 (8) a summary statement that the taxpayer relies on for 31.11 each exception; and 31.12 (9) the taxpayer's signature or signature of the taxpayer's 31.13 duly authorized agent. 31.14 Subd. 4. [EXTENSIONS.] When requested in writing and 31.15 within the time allowed for filing an administrative appeal, the 31.16 commissioner may extend the time for filing an appeal for a 31.17 period of not more than 30 days from the expiration of the 60 31.18 days from the notice date. 31.19 Subd. 5. [DETERMINATION OF APPEAL.] On the basis of 31.20 applicable law and available information, the commissioner shall 31.21 determine the validity, if any, in whole or part of the appeal 31.22 and notify the taxpayer of the decision. This notice must be in 31.23 writing and contain the basis for the determination. 31.24 Subd. 6. [AGREEMENT DETERMINING TAX LIABILITY.] When it 31.25 appears to be in the best interests of the state, the 31.26 commissioner may settle any taxes, penalties, or interest that 31.27 the commissioner has under consideration by virtue of an appeal 31.28 filed under this section. An agreement must be in writing and 31.29 signed by the commissioner and the taxpayer, or the taxpayer's 31.30 representative authorized by the taxpayer to enter into an 31.31 agreement. The agreement must be filed in the office of the 31.32 commissioner. 31.33 Subd. 7. [APPEAL OF AN ADMINISTRATIVE DETERMINATION.] 31.34 Following the determination or settlement of an appeal and 31.35 notwithstanding any period of limitations for making assessments 31.36 or other determinations to the contrary, the commissioner shall 32.1 issue an order reflecting that disposition. If the statute of 32.2 limitations for making assessments or other determinations would 32.3 have expired before the issuance of this order, except for this 32.4 section, the order is limited to issues or matters contained in 32.5 the appealed determination. Except in the case of an agreement 32.6 determining tax under this section, the order is appealable to 32.7 the Minnesota tax court under section 271.06. 32.8 Subd. 8. [APPEAL WHERE NO DETERMINATION.] If the 32.9 commissioner does not make a determination within six months of 32.10 the filing of an administrative appeal, the taxpayer may elect 32.11 to appeal to tax court. 32.12 Subd. 9. [INAPPLICABILITY OF ADMINISTRATIVE PROCEDURE 32.13 ACT.] An appeal under this section is not a contested case 32.14 governed by chapter 14. 32.15 Sec. 22. [297G.22] [JUDICIAL REVIEW.] 32.16 In lieu of an administrative appeal under this chapter, a 32.17 person aggrieved by an order of the commissioner fixing a tax, 32.18 penalty, or interest under this chapter may, within 60 days from 32.19 the date of the notice of the order, appeal to the tax court in 32.20 the manner provided under section 271.06. 32.21 Sec. 23. [PURPOSE.] 32.22 It is the intent of the legislature to simplify Minnesota's 32.23 liquor tax laws by consolidating and recodifying tax 32.24 administration and compliance provisions now contained 32.25 throughout Minnesota Statutes, chapter 297C. Due to the 32.26 complexity of the recodification, prior provisions are repealed 32.27 on the effective date of the new provisions. The repealed 32.28 provisions, however, continue to remain in effect until 32.29 superseded by the analogous provision in the new law. 32.30 Sec. 24. [REPEALER.] 32.31 Minnesota Statutes 1996, sections 297C.01; 297C.02; 32.32 297C.03; 297C.04; 297C.045; 297C.05; 297C.06; 297C.07; 297C.08; 32.33 297C.09; 297C.10; 297C.11; 297C.12; 297C.13; 297C.14; 297C.16; 32.34 and 297C.17, are repealed. 32.35 Sec. 25. [EFFECTIVE DATE.] 32.36 Sections 1 and 23 are effective the day following final 33.1 enactment. Sections 2 to 12, 18, 21, and 22 are effective for 33.2 returns, reports, taxes, or other payments first becoming due on 33.3 or after August 1, 1997. Sections 13, 20, and 24 are effective 33.4 August 1, 1997. Sections 14 and 15 are effective for audits or 33.5 investigations initiated on or after August 1, 1997. Section 16 33.6 is effective for returns becoming due on or after August 1, 33.7 1997. Section 17 is effective for interest on amounts first 33.8 becoming due to the commissioner on or after August 1, 1997. 33.9 Section 19 is effective for crimes committed on or after August 33.10 1, 1997. 33.11 ARTICLE 2 33.12 TECHNICAL CHANGES 33.13 Section 1. Minnesota Statutes 1996, section 16A.26, is 33.14 amended to read: 33.15 16A.26 [ONE DEPOSITORY ACCOUNT FOR EACH TAX.] 33.16 Notwithstanding sections 297.13, 298.17, 298.282, 298.39, 33.17 298.396,297C.02 to 297C.08297G.10, and similar laws to the 33.18 contrary relating to the depositing, disposition, or 33.19 apportionment of tax receipts, the commissioner may use one 33.20 depository account for each tax. To do so, there must be enough 33.21 information to identify and dispose of or apportion the tax 33.22 under law. The commissioner shall ask the appropriate officials 33.23 for the transfers and necessary certifications. The 33.24 commissioner may issue directives to carry out this section. 33.25 Sec. 2. Minnesota Statutes 1996, section 340A.301, 33.26 subdivision 8, is amended to read: 33.27 Subd. 8. [SALES WITHOUT LICENSE.] A licensed brewer may 33.28 without an additional license sell malt liquor to employees or 33.29 retired former employees, in amounts of not more than 768 fluid 33.30 ounces in a week for off-premise consumption only. A collector 33.31 of commemorative bottles, those terms are as defined in 33.32 section297C.01297G.01, subdivisions 4 and 5, may sell them to 33.33 another collector without a license. It is also lawful for a 33.34 collector of beer cans to sell unopened cans of a brand which 33.35 has not been sold commercially for at least two years to another 33.36 collector without obtaining a license. The amount sold to any 34.1 one collector in any one month shall not exceed 768 fluid 34.2 ounces. A licensed manufacturer of wine containing not more than 34.3 25 percent alcohol by volume nor less than 51 percent wine made 34.4 from Minnesota-grown agricultural products may sell at on-sale 34.5 or off-sale wine made on the licensed premises without a further 34.6 license. 34.7 Sec. 3. Minnesota Statutes 1996, section 340A.302, 34.8 subdivision 1, is amended to read: 34.9 Subdivision 1. [LICENSES REQUIRED.] Except as provided in 34.10 sections297C.09297G.07, subdivision 2, and 340A.301, 34.11 subdivision 1, no retailer or other person may ship or cause to 34.12 be shipped alcoholic beverages or ethyl alcohol for personal use 34.13 or to a licensed manufacturer or wholesaler without obtaining an 34.14 importer's license from the commissioner. 34.15 Sec. 4. Minnesota Statutes 1996, section 340A.414, 34.16 subdivision 7, is amended to read: 34.17 Subd. 7. [INSPECTION.] An establishment holding a permit 34.18 under this section is open for inspection by the commissioner 34.19 and the commissioner's representative and by peace officers, who 34.20 may enter and inspect during reasonable hours. Intoxicating 34.21 liquor sold, served, or displayed in violation of law may be 34.22 seized and may be disposed of under section297C.12297G.20. 34.23 Sec. 5. Minnesota Statutes 1996, section 340A.417, is 34.24 amended to read: 34.25 340A.417 [SHIPMENTS INTO MINNESOTA.] 34.26 (a) Notwithstanding section297C.09297G.07, subdivision 2, 34.27 or any provision of this chapter, a winery licensed in a state 34.28 which affords Minnesota wineries an equal reciprocal shipping 34.29 privilege may ship, for personal use and not for resale, not 34.30 more than two cases of wine, containing a maximum of nine liters 34.31 per case, in any calendar year to any resident of Minnesota age 34.32 21 or over. Delivery of a shipment under this section may not 34.33 be deemed a sale in this state. 34.34 (b) The shipping container of any wine sent into or out of 34.35 Minnesota under this section must be clearly labeled to indicate 34.36 that the package cannot be delivered to a person under the age 35.1 of 21 years. 35.2 (c) No person may (1) advertise shipments authorized under 35.3 this section, or (2) by advertisement or otherwise, solicit 35.4 shipments authorized by this section. No shipper located 35.5 outside Minnesota may advertise such interstate reciprocal wine 35.6 shipments in Minnesota. 35.7 (d) It is not the intent of this section to impair the 35.8 distribution of wine through distributors or importing 35.9 distributors, but only to permit shipments of wine for personal 35.10 use. 35.11 Sec. 6. Minnesota Statutes 1996, section 340A.7035, is 35.12 amended to read: 35.13 340A.7035 [CONSUMER IMPORTATION; ILLEGAL ACTS.] 35.14 A person who enters Minnesota from another state and who 35.15 imports or possesses alcoholic beverages in excess of the 35.16 tax-exempt quantities provided for in section297C.07,35.17paragraphs (10), (11), and (12),297G.07, subdivision 2, 35.18 paragraphs (a), (b), and (c), is guilty of a misdemeanor. A 35.19 person who enters Minnesota from a foreign country who imports 35.20 or possesses alcoholic beverages on which the excise tax imposed 35.21 bysections 297C.02 and 297C.09chapter 297G has not been paid, 35.22 other than the tax-exempt quantities provided for in 35.23 section297C.07, paragraphs (10), (11), and (12),297G.07, 35.24 subdivision 2, paragraphs (a), (b), and (c), is guilty of a 35.25 misdemeanor. A peace officer, the commissioner of public 35.26 safety, and employees designated by the commissioner of public 35.27 safety may seize alcoholic beverages imported or possessed in 35.28 violation of this section. This section does not apply to the 35.29 consignments of alcoholic beverages shipped into this state by 35.30 holders of Minnesota import licenses or Minnesota manufacturers 35.31 and wholesalers when licensed by the commissioner of public 35.32 safety or to common carriers with licenses to sell alcoholic 35.33 beverages in more than one state when licensed by the 35.34 commissioner of public safety to sell alcoholic beverages in 35.35 this state. 35.36 Sec. 7. [EFFECTIVE DATE.] 36.1 Sections 1 to 6 are effective August 1, 1997.