Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 106-S.F.No. 472
An act relating to taxation; recodifying sales taxes
on cigarettes and tobacco products; providing criminal
and civil penalties; appropriating money; amending
Minnesota Statutes 1996, sections 16A.26; 16A.661,
subdivision 3; 16A.6701, subdivision 1; 116P.13,
subdivision 1; 325D.32, subdivision 4; and 325D.415;
proposing coding for new law as Minnesota Statutes,
chapter 297F; repealing Minnesota Statutes 1996,
sections 297.01; 297.02; 297.03; 297.031; 297.032;
297.04; 297.041; 297.05; 297.06; 297.07; 297.075;
297.08; 297.09; 297.10; 297.11; 297.12; 297.13;
297.21; 297.22; 297.23; 297.24; 297.25; 297.26;
297.31; 297.32; 297.321; 297.33; 297.335; 297.34;
297.35; 297.36; 297.37; 297.38; 297.385; 297.39;
297.40; 297.41; 297.42; 297.43; and 297.44.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
RECODIFICATION
Section 1. [297F.01] [DEFINITIONS.]
Subdivision 1. [APPLICABILITY.] Unless the language or
context clearly indicates that a different meaning is intended,
the following terms for the purposes of this chapter, have the
following meanings.
Subd. 2. [BUSINESS.] "Business" means any trade,
occupation, activity, or enterprise engaged in selling or
distributing cigarettes or tobacco products in this state.
Subd. 3. [CIGARETTE.] "Cigarette" means any roll for
smoking made wholly or in part of tobacco, the wrapper or cover
of which is made of paper or another substance or material
except tobacco.
Subd. 4. [CIGARETTE DISTRIBUTOR.] "Cigarette distributor"
means any of the following:
(1) a person engaged in the business of selling cigarettes
in this state and who manufactures or who brings, or causes to
be brought, into this state from outside the state any packages
of cigarettes for sale to subjobbers or retailers;
(2) a person engaged in the business outside this state who
ships or transports cigarettes to retailers in this state, to be
sold by those retailers;
(3) a person who is on direct purchase from a cigarette
manufacturer and applies cigarette stamps on at least 50 percent
of cigarettes sold by that person.
Subd. 5. [CIGARETTE SUBJOBBER.] "Cigarette subjobber"
means any person who acquires stamped cigarettes or other
state's stamped cigarettes for the primary purpose of resale to
retailers, and any licensed distributor who delivers, sells, or
distributes stamped cigarettes from a place of business other
than that licensed in the distributor's license.
"Cigarette subjobber" also means a person who is a vending
machine operator. A vending machine operator is a person whose
principal business is operating, or owning and leasing to
operators, machines for the vending of merchandise or service.
Subd. 6. [COMMISSIONER.] "Commissioner" means the state
commissioner of revenue.
Subd. 7. [CONSUMER.] "Consumer" means any person who has
title to or possession of cigarettes or tobacco products in
storage, for use or other consumption in this state.
Subd. 8. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 1996.
Subd. 9. [LICENSING PERIOD.] "Licensing period" means a
two-year period during which licenses are issued. A licensing
period begins on January 1 of each even-numbered year and ends
on December 31 of the following odd-numbered year.
Subd. 10. [MANUFACTURER.] "Manufacturer" means a person
who produces and sells cigarettes or tobacco products.
Subd. 11. [PACKAGE.] "Package" means the individual
packet, box, or other container used to contain and convey
cigarettes to the consumer.
Subd. 12. [PERSON.] "Person" means an individual or any
entity engaged in the sale of cigarettes or tobacco products.
Subd. 13. [PLACE OF BUSINESS.] "Place of business" means a
place where cigarettes or tobacco products are sold or where
cigarettes or tobacco products are manufactured, stored, or kept
for the purpose of sale or consumption, including any vessel,
vehicle, airplane, train, or vending machine.
Subd. 14. [RETAILER.] "Retailer" means a person engaged in
this state in the business of selling, or offering to sell,
cigarettes or tobacco products to consumers.
Subd. 15. [RETAIL OUTLET.] "Retail outlet" means each
place of business from which cigarettes or tobacco products are
sold to consumers.
Subd. 16. [SALE.] "Sale" means a transfer, exchange, or
barter, in any manner or by any means, for consideration, and
includes all sales made by any person. It also includes gifts
or samples provided for advertising or promotional purposes,
made by a person engaged in the selling of cigarettes or tobacco
products.
Subd. 17. [STAMP.] "Stamp" means the adhesive stamp
supplied by the commissioner of revenue for use on cigarette
packages.
Subd. 18. [STORAGE.] "Storage" means any keeping or
retention of cigarettes or tobacco products for use or
consumption in this state.
Subd. 19. [TOBACCO PRODUCTS.] "Tobacco products" means
cigars; little 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, and other kinds and forms of
tobacco, prepared in such manner as to be suitable for chewing
or smoking in a pipe or otherwise, or both for chewing and
smoking; but does not include cigarettes as defined in this
section.
Subd. 20. [TOBACCO PRODUCTS DISTRIBUTOR.] "Tobacco
products distributor" means any of the following:
(1) a person engaged in the business of selling tobacco
products in this state who brings, or causes to be brought, into
this state from outside the state any tobacco products for sale;
(2) a person who makes, manufactures, or fabricates tobacco
products in this state for sale in this state;
(3) a person engaged in the business of selling tobacco
products outside this state who ships or transports tobacco
products to retailers in this state, to be sold by those
retailers.
Subd. 21. [TOBACCO PRODUCTS SUBJOBBER.] "Tobacco products
subjobber" means a person, other than a manufacturer or
distributor, who buys from a distributor tobacco products upon
which the tax imposed by this chapter has been paid and sells
them to persons other than the ultimate consumers, and any
licensed distributor who delivers, sells, or distributes tobacco
products upon which the tax imposed by this chapter has been
paid from a place of business other than that licensed in the
distributor's license.
Subd. 22. [USE.] "Use" means the exercise of a right or
power incidental to the ownership of cigarettes or tobacco
products.
Subd. 23. [WHOLESALE PRICE.] "Wholesale price" means the
established price for which a manufacturer sells a tobacco
product to a distributor, exclusive of any discount or other
reduction.
Sec. 2. [297F.02] [ADMINISTRATION.]
Subdivision 1. [DUTIES OF COMMISSIONER.] The commissioner
shall enforce the provisions of this chapter and may prescribe
rules consistent with the provisions of this chapter for its
detailed and efficient administration.
In the enforcement of this chapter, the commissioner may
call any county attorney or any peace officer for assistance and
may appoint such additional employees as may be required to
administer this chapter. The commissioner may bring injunction
proceedings to restrain any person from acting as a distributor
without complying with the provisions of this chapter.
Subd. 2. [POWERS OF COMMISSIONER.] The commissioner, or
duly authorized agents, may conduct investigations, inquiries,
and hearings under this chapter and, in connection with such
investigations, inquiries, and hearings, the commissioner and
the duly authorized agents shall have all the powers conferred
upon the commissioner and the commissioner's examiners by
section 270.06, and the provisions of that section shall apply
to all such investigations, inquiries, and hearings.
Subd. 3. [EXPENSES OF ADMINISTRATION.] Expenses for the
administration of this chapter shall be paid out of
appropriations to the commissioner for the administration of
this chapter and shall include fees and expenses incurred by the
attorney general and any county attorney in litigation in
connection with the enforcement of this chapter. Expenses also
include all court costs and expenses.
Sec. 3. [297F.03] [LICENSES; CIGARETTE AND TOBACCO
PRODUCTS DISTRIBUTOR AND SUBJOBBER.]
Subdivision 1. [SELLING WITHOUT LICENSE ILLEGAL.] No
person shall engage in the business of a distributor or
subjobber at any place of business without first having received
a license from the commissioner to engage in that business at
that place of business.
Subd. 2. [FORM OF APPLICATION.] Every application for a
cigarette or tobacco products license shall be made on a form
prescribed by the commissioner and shall state the name and
address of the applicant; if the applicant is a firm,
partnership, or association, the name and address of each of its
members; if the applicant is a corporation, the name and address
of each of its officers; the address of its principal place of
business; the place where the business to be licensed is to be
conducted; and any other information the commissioner may
require for the administration of this chapter.
Subd. 3. [PLACE OF APPLICATION.] A separate application
for a distributor's license shall be made for each place of
business at which a distributor proposes to engage in business.
A separate application for a subjobber's license may be
made by a licensed distributor for each place of business, other
than that licensed in the distributor's license, to which the
distributor sells or distributes stamped cigarettes or tobacco
products.
Subd. 4. [NONRESIDENT APPLICATION.] A person outside this
state who ships or transports cigarettes or tobacco products to
retailers in this state, to be sold by those retailers, shall
make an application for a distributor's license, be granted such
a license by the commissioner, and thereafter be subject to all
the provisions of this chapter.
Subd. 5. [LICENSE FEES; CIGARETTES.] Each application for
a cigarette distributor's license must be accompanied by a fee
of $300. Each application for a cigarette subjobber's license
must be accompanied by a fee of $24. A distributor or subjobber
applying for a license during the second year of a two-year
licensing period is required to pay only one-half of the license
fee.
Subd. 6. [LICENSE FEES; TOBACCO PRODUCTS.] Each
application for a tobacco products distributor's license must be
accompanied by a fee of $75. Each application for a tobacco
products subjobber's license must be accompanied by a fee of
$20. A distributor or subjobber applying for a license during
the second year of a two-year licensing period is required to
pay only one-half of the license fee.
Subd. 7. [ISSUANCE OF LICENSE.] The commissioner, upon
receipt of the application in proper form, and payment of the
license fee required by this chapter, shall, unless otherwise
provided by this chapter, issue the applicant a license in the
form prescribed by the commissioner. The license permits the
applicant to engage in business as a distributor or subjobber at
the place of business shown in the application.
Subd. 8. [LICENSING PERIOD; EXPIRATION.] The licensing
period begins January 1 of an even-numbered year and ends on
December 31 of the following year. Each license issued shall
expire on December 31 of the second year of the licensing period
unless sooner revoked by the commissioner or unless the business
with respect to which the license was issued is transferred. In
either case the holder of the license shall immediately
surrender it to the commissioner.
Subd. 9. [DISPLAY.] Each license must be prominently
displayed on the premises covered by the license.
Subd. 10. [TRANSFER.] Licenses are not transferable to any
other person.
Sec. 4. [297F.04] [LICENSE SUSPENSION OR REVOCATION.]
Subdivision 1. [POWERS OF COMMISSIONER.] The commissioner
may revoke or suspend the license or licenses of any distributor
or subjobber for violation of this chapter, any other act
applicable to the sale of cigarettes or tobacco products, or any
rule promulgated by the commissioner, in furtherance of this
chapter. The commissioner may also revoke, cancel, or suspend
the license or licenses of any distributor or subjobber for
violation of sections 325D.30 to 325D.42.
Subd. 2. [REFUSAL TO ISSUE OR RENEW; REVOCATION.] The
commissioner must not issue or renew a license under this
chapter, and may revoke a license under this chapter, if the
applicant or licensee:
(1) owes $500 or more in delinquent taxes as defined in
section 270.72, subdivision 2;
(2) after demand, has not filed tax returns required by the
commissioner;
(3) had a cigarette or tobacco license revoked by the
commissioner within the past two years;
(4) had a sales and use tax permit revoked by the
commissioner within the past two years; or
(5) has been convicted of a crime involving cigarettes,
including but not limited to: selling stolen cigarettes or
tobacco products, receiving stolen cigarettes or tobacco
products, or involvement in the smuggling of cigarettes or
tobacco products.
Subd. 3. [NOTICE.] No license may be revoked or suspended
under this chapter, and no application for a license may be
denied under this chapter, except after 20 days' notice. In
that notice the commissioner shall specify the allegations
against the licensee or applicant, and provide the licensee or
applicant the right to request in writing within 20 days a
contested case hearing as provided in chapter 14.
If a written request for a hearing is received by the
department of revenue within 20 days of the date of the initial
notice, the hearing must be held within 45 days after referral
to the office of administrative hearings, and no earlier than 20
days after notice to the licensee or applicant of the hearing
time and place. A license is revoked or suspended, and an
application is denied, when the commissioner serves notice of
revocation, suspension, or denial after 20 days have passed
following the initial notice under this paragraph without a
request for hearing being made, or if a hearing is held, after
the commissioner serves an order of revocation, suspension, or
denial under section 14.62, subdivision 1. All notices under
this paragraph may be served personally or by mail.
Sec. 5. [297F.05] [RATES OF TAX; PERSONAL DEBT.]
Subdivision 1. [RATES; CIGARETTES.] A tax is imposed upon
the sale of cigarettes in this state, upon having cigarettes in
possession in this state with intent to sell, upon any person
engaged in business as a distributor, and upon the use or
storage by consumers, at the following rates, subject to the
discount provided in this chapter:
(1) on cigarettes weighing not more than three pounds per
thousand, 24 mills on each such cigarette; and
(2) on cigarettes weighing more than three pounds per
thousand, 48 mills on each such cigarette.
Subd. 2. [DISTRIBUTION OF FREE SAMPLE PACKAGES.] A person
who distributes free packages of cigarettes is liable for the
payment of tax under this chapter.
Subd. 3. [RATES; TOBACCO PRODUCTS.] A tax is imposed upon
all tobacco products in this state and upon any person engaged
in business as a distributor, at the rate of 35 percent of the
wholesale sales price of the tobacco products. The tax is
imposed at the time the distributor:
(1) brings, or causes to be brought, into this state from
outside the state tobacco products for sale;
(2) makes, manufactures, or fabricates tobacco products in
this state for sale in this state; or
(3) ships or transports tobacco products to retailers in
this state, to be sold by those retailers.
Subd. 4. [USE TAX; TOBACCO PRODUCTS.] A tax is imposed
upon the use or storage by consumers of tobacco products in this
state, and upon such consumers, at the rate of 35 percent of the
cost to the consumer of the tobacco products.
Subd. 5. [TAX AS PERSONAL DEBT.] The tax imposed by this
chapter, and interest and penalties imposed with respect to it,
is a personal debt of the person required to file a return from
the time the liability for it arises, regardless of when the
time for payment of the liability occurs. In the case of the
executor or administrator of the estate of a decedent and in the
case of any fiduciary, the debt is that of the person in the
person's official or fiduciary capacity only, unless the person
has voluntarily distributed the assets held in that capacity
without reserving sufficient assets to pay the tax, interest,
and penalties. In that case, the person is personally liable
for the deficiency.
Subd. 6. [TAX CONSTRUCTION.] The tax imposed by this
section is not a cost of doing business or an overhead expense
under section 325D.01, subdivision 7.
Subd. 7. [TAX; SALES BY STATE.] The state of Minnesota or
any of its agencies, instrumentalities, or governmental
subdivisions is subject to the tax imposed by this chapter on
all cigarettes or tobacco products sold, in the same manner as
distributors, if such unit is engaged in the purchase and sale
of cigarettes or tobacco products.
Sec. 6. [297F.06] [EXEMPTIONS FROM TAX.]
Subdivision 1. [FEDERAL LAWS.] The tax imposed by this
section does not apply with respect to any sale of cigarettes or
tobacco products which under the constitution and laws of the
United States may not be subject to taxation by the state.
Subd. 2. [USE TAX.] The use tax does not apply if the tax
imposed on cigarettes or tobacco products has been paid.
Subd. 3. [CIGARETTE USE TAX.] The cigarette use tax does
not apply to the use or storage of cigarettes in quantities of
200 or fewer in the possession of any one consumer, provided
that the cigarettes were carried into this state by that
consumer.
Subd. 4. [TOBACCO PRODUCTS USE TAX.] The tobacco products
use tax does not apply to the use or storage of tobacco products
in quantities of:
(1) not more than 50 cigars;
(2) not more than ten ounces snuff or snuff powder;
(3) not more than one pound smoking or chewing tobacco or
any other tobacco product in the possession of any one consumer.
Subd. 5. [OCEAN-GOING VESSELS.] The commissioner may adopt
rules for the sale by licensed distributors of tax free
cigarettes to the masters of ocean-going vessels for use aboard
ship outside the continental limits of the United States,
provided the cigarettes are also exempt from the taxes imposed
on cigarettes by the United States government.
Sec. 7. [297F.07] [SALES TO INDIAN TRIBES.]
Subdivision 1. [WHOLESALERS.] A wholesaler may set aside
the part of the wholesaler's cigarette and tobacco product stock
necessary to make sales to the established governing body of an
Indian tribe recognized by the United States Department of
Interior without paying the tax required by this chapter. The
amount of unstamped or untaxed stock that wholesalers may
deliver to an Indian reservation is limited to amounts necessary
to meet the personal consumption needs of qualified purchasers.
The unstamped stock must be kept separate and apart from stamped
stock. When shipping or delivering unstamped or untaxed stock
to an Indian tribal organization, the wholesaler shall make a
true duplicate invoice. The invoice must show the complete
details of the sale or delivery. The wholesaler shall send the
duplicate to the commissioner not later than the 18th day of the
following calendar month. If the wholesaler fails to comply
with this section, the commissioner shall revoke the permission
granted to the wholesaler to keep a stock of unstamped goods.
Subd. 2. [RETAILERS.] Retailers who are Indian tribal
organizations may keep unstamped or untaxed stock intended for
sale to qualified purchasers.
Subd. 3. [QUALIFIED PURCHASERS.] A qualified purchaser of
unstamped or untaxed stock means only an enrolled member of the
Indian tribe which is offering the stock for sale.
Subd. 4. [SALES TO NONQUALIFIED BUYERS.] A retailer who
sells or otherwise disposes of unstamped or untaxed stock other
than to a qualified purchaser shall collect from the buyer or
transferee the tax imposed by section 297F.05, and remit the tax
to the department of revenue at the same time and manner as
required by section 297F.09. If the retailer fails to collect
the tax from the buyer or transferee, or fails to remit the tax,
the retailer is personally responsible for the tax and the
commissioner may seize any product destined to be delivered to
the retailer. The product so seized shall be considered
contraband and be subject to the procedures outlined in section
297F.21, subdivision 3. The proceeds of the sale of the stock
may be applied to any tax liability owed by the retailer after
deducting all costs and expenses.
This section does not relieve the buyer or possessor of
unstamped or untaxed stock from personal liability for the tax.
Sec. 8. [297F.08] [CIGARETTE STAMPS.]
Subdivision 1. [STAMP PUT ON BY DISTRIBUTOR.] Except as
otherwise provided in this chapter, payment of the tax imposed
by this chapter must be evidenced by stamps affixed to each
package. Before delivering, or causing to be delivered, a
package to any person in this state, a distributor shall firmly
affix to each package of cigarettes appropriate stamps in
amounts equal to the tax on those cigarettes as provided in this
chapter.
Subd. 2. [TAX DUE; CIGARETTES.] Notwithstanding any other
provisions of this chapter, the tax due on the return is based
upon actual heat-applied stamps purchased during the reporting
period.
Subd. 3. [TIME OF AFFIXING STAMP.] In all cases where
cigarettes are shipped into this state by any licensed
distributor from outside this state, the appropriate stamps must
be affixed to packages at the time the package enters the state.
Subd. 4. [STAMPS; DESIGN, PRINTING.] The commissioner
shall adopt the design of two stamps. One stamp must be
designed for application to cigarette packages destined for
retail sale on an Indian reservation which is a party to an
agreement under section 270.60, subdivision 2, and only to those
packages. A second stamp must be designed for all other
cigarette packages subject to the provisions of this chapter.
The commissioner shall arrange for the printing of stamps in
such amounts and denominations as the commissioner deems
necessary.
Subd. 5. [DEPOSIT OF PROCEEDS.] The commissioner shall use
the amounts appropriated by law to purchase heat-applied stamps
for resale. The commissioner shall charge the purchasers for
the costs of the stamps along with the tax value plus shipping
costs. The costs recovered along with shipping costs must be
deposited into the general fund.
Subd. 6. [SECTION 16A.56 SUPERSEDED.] The provisions of
this chapter prescribing the powers and duties of the
commissioner with relation to stamps supersede all the
provisions of section 16A.56 in conflict.
Subd. 7. [PRICE OF STAMPS.] The commissioner shall sell
stamps to any person licensed as a distributor at a discount of
1.0 percent from the face amount of the stamps for the first
$1,500,000 of such stamps purchased in any fiscal year; and at a
discount of 0.6 percent on the remainder of such stamps
purchased in any fiscal year. The commissioner shall not sell
stamps to any other person. The commissioner may prescribe the
method of shipment of the stamps to the distributor as well as
the quantities of stamps purchased.
Subd. 8. [SALE OF STAMPS.] The commissioner may sell
heat-applied stamps on a credit basis under conditions
prescribed by the commissioner. The commissioner shall sell the
stamps at a price which includes the tax after giving effect to
the discount provided in subdivision 7. The commissioner shall
recover the actual costs of the stamps from the distributor.
The commissioner shall annually establish the maximum amount of
heat-applied stamps that may be purchased each month.
Subd. 9. [TAX STAMPING MACHINES.] The commissioner shall
require any person licensed as a distributor to stamp packages
with a heat-applied tax stamping machine, approved by the
commissioner, which shall be provided by the distributor. The
commissioner shall also supervise and check the operation of the
machines and shall provide for the payment of the tax on any
package so stamped, subject to the discount provided in
subdivision 7. If the commissioner finds that a stamping
machine is not affixing a legible stamp on the package, the
commissioner may order the distributor to immediately cease the
stamping process until the machine is functioning properly.
Subd. 10. [RESALE OR TRANSFER OF STAMPS PROHIBITED.] No
distributor shall resell or transfer any stamps purchased by the
distributor from the commissioner. A distributor may transfer
another state's stamped cigarettes to another distributor for
the purpose of resale in the other state. A distributor who has
on hand any uncanceled stamps at the time of discontinuing the
business of selling cigarettes may return them to the
commissioner and receive a refund of the amount paid for the
stamps. Stamps which have become mutilated or unfit for use, or
are affixed to cigarettes being returned to the manufacturer, or
are affixed to packages which, or the contents of which, have
become damaged and unfit for sale, shall be replaced by the
commissioner, upon application by the distributor owning the
stamps or cigarettes if an investigation discloses that the
stamps have not evidenced a taxable transaction, after
compliance with rules or orders of the commissioner designed to
prevent use of the stamps replaced.
Subd. 11. [RAILROAD OR SLEEPING CAR COMPANY AS A
DISTRIBUTOR.] The commissioner may authorize a railroad or
sleeping car company licensed as a distributor to sell
cigarettes on its cars without affixing stamps to the packages,
provided that monthly reports and payments of the tax due
subject to the discount in subdivision 7 must be made directly
to the commissioner in the manner and under the terms provided
for by the commissioner. Only one distributor's license need be
obtained by each railroad or sleeping car company to permit it
to sell cigarettes on any or all of its cars within the state.
Sec. 9. [297F.09] [RETURNS; PAYMENT OF TAX.]
Subdivision 1. [MONTHLY RETURN; CIGARETTE DISTRIBUTOR.] On
or before the 18th day of each calendar month, a distributor
with a place of business in this state shall file a return with
the commissioner showing the quantity of cigarettes manufactured
or brought in from outside the state or purchased during the
preceding calendar month and the quantity of cigarettes sold or
otherwise disposed of in this state and outside this state
during that month. A licensed distributor outside this state
shall in like manner file a return showing the quantity of
cigarettes shipped or transported into this state during the
preceding calendar month. Returns must be made in the form and
manner prescribed by the commissioner and must contain any other
information required by the commissioner. The return must be
accompanied by a remittance for the full unpaid tax liability
shown by it. The return for the May liability and 75 percent of
the estimated June liability is due on the date payment of the
tax is due.
Subd. 2. [MONTHLY RETURN; TOBACCO PRODUCTS
DISTRIBUTOR.] On or before the 18th day of each calendar month,
a distributor with a place of business in this state shall file
a return with the commissioner showing the quantity and
wholesale sales price of each tobacco product:
(1) brought, or caused to be brought, into this state for
sale; and
(2) made, manufactured, or fabricated in this state for
sale in this state, during the preceding calendar month.
Every licensed distributor outside this state shall in like
manner file a return showing the quantity and wholesale sales
price of each tobacco product shipped or transported to
retailers in this state to be sold by those retailers, during
the preceding calendar month. Returns must be made in the form
and manner prescribed by the commissioner and must contain any
other information required by the commissioner. The return must
be accompanied by a remittance for the full tax liability shown,
less 1.5 percent of the liability as compensation to reimburse
the distributor for expenses incurred in the administration of
this chapter. The return for the May liability and 75 percent
of the estimated June liability is due on the date payment of
the tax is due.
Subd. 3. [USE TAX RETURN; CIGARETTE OR TOBACCO PRODUCTS
CONSUMER.] On or before the 18th day of each calendar month, a
consumer who, during the preceding calendar month, has acquired
title to or possession of cigarettes or tobacco products for use
or storage in this state, upon which cigarettes or tobacco
products the tax imposed by this chapter has not been paid,
shall file a return with the commissioner showing the quantity
of cigarettes or tobacco products so acquired. The return must
be made in the form and manner prescribed by the commissioner,
and must contain any other information required by the
commissioner. The return must be accompanied by a remittance
for the full unpaid tax liability shown by it.
Subd. 4. [TAX PROVISIONS APPLICABLE TO CONSUMERS.] All of
the provisions of this chapter relating to corrections of
returns, deficiency assessments, protests, hearings, interest
and penalties, and collection of taxes, apply to consumers.
Subd. 5. [EXTENSION OF TIME.] The commissioner may extend
the time for filing returns and remittance of tax, deficiencies,
and penalties for not more than 60 days. The commissioner may
require that a tentative return be filed at the time for filing
the regularly required return and that payment of the tax be
made with it on the basis of the tentative return. When an
extension of time for payment has been granted under this
section, interest is payable at the rate provided in section
270.75 from the date when the payment should have been made, if
no extension had been granted, until the tax is paid.
Subd. 6. [ACCELERATED TAX PAYMENT; CIGARETTE OR TOBACCO
PRODUCTS DISTRIBUTOR.] A cigarette or tobacco products
distributor having a liability of $120,000 or more during a
fiscal year ending June 30, shall remit the June liability for
the next year in the following manner:
(a) Two business days before June 30 of the year, the
distributor shall remit the actual May liability and 75 percent
of the estimated June liability to the commissioner and file the
return in the form and manner prescribed by the commissioner.
(b) On or before August 18 of the year, the distributor
shall submit a return showing the actual June liability and pay
any additional amount of tax not remitted in June. A penalty is
imposed equal to ten percent of the amount of June liability
required to be paid in June, less the amount remitted in June.
However, the penalty is not imposed if the amount remitted in
June equals the lesser of:
(1) 70 percent of the actual June liability; or
(2) 75 percent of the preceding May's liability.
Subd. 7. [ELECTRONIC FUNDS TRANSFER.] A cigarette or
tobacco products distributor having a liability of $120,000 or
more during a fiscal year ending June 30 must remit all
liabilities in the subsequent calendar year by means of a fund
transfer as defined in section 336.4A-104, paragraph (a). The
funds transfer payment date, as defined in section 336.4A-401,
must be on or before the date the tax is due. If the date the
tax is due is not a funds transfer business day, as defined in
section 336.4A-105, paragraph (a), clause (4), the payment date
must be on or before the funds transfer day immediately
following the date the tax is due.
Subd. 8. [ORDER PAYMENTS CREDITED.] All payments received
may, in the discretion of the commissioner, be credited first to
the oldest liability not secured by a judgment or lien, but in
all cases must be credited first to penalties, next to interest,
and then to the tax due.
Subd. 9. [INTEREST.] The amount of tax not timely paid,
together with any penalty imposed in this section, bears
interest at the rate specified in section 270.75 from the time
such tax should have been paid until paid. Any interest and
penalty is added to the tax and collected as a part of it.
Sec. 10. [297F.10] [DEPOSIT OF PROCEEDS.]
Subdivision 1. [TAX AND USE TAX ON CIGARETTES.] Revenue
received from cigarette taxes, as well as related penalties,
interest, license fees, and miscellaneous sources of revenue
shall be deposited by the commissioner in the state treasury and
credited as follows:
(a) first to the general obligation special tax bond debt
service account in each fiscal year the amount required to
increase the balance on hand in the account on each December 1
to an amount equal to the full amount of principal and interest
to come due on all outstanding bonds whose debt service is
payable primarily from the proceeds of the tax to and including
the second following July 1; and
(b) after the requirements of paragraph (a) have been met:
(1) the revenue produced by one mill of the tax on
cigarettes weighing not more than three pounds a thousand and
two mills of the tax on cigarettes weighing more than three
pounds a thousand must be credited to the Minnesota future
resources fund; and
(2) the balance of the revenues derived from taxes,
penalties, and interest (under this chapter) and from license
fees and miscellaneous sources of revenue shall be credited to
the general fund.
Subd. 2. [TAX AND USE TAX ON TOBACCO PRODUCTS.] Revenue
received from taxes on tobacco products, as well as related
penalties, interest, and license fees shall be deposited by the
commissioner in the state treasury and credited to the general
fund.
Sec. 11. [297F.11] [INFORMATIONAL REPORTS; CIGARETTES.]
Subdivision 1. [GENERAL RULE.] The following persons shall
file with the commissioner a monthly informational report in the
form and manner prescribed by the commissioner:
(1) a distributor licensed to ship cigarettes into
Minnesota;
(2) a person who manufactures cigarettes within the state;
(3) any other person who imports cigarettes into Minnesota;
and
(4) a person who possesses, receives, stores, or warehouses
cigarettes in Minnesota, upon which the tax imposed by this
chapter has not been paid.
The requirement of filing an informational report does not
apply to a person conveying or possessing cigarettes described
in this chapter, nor to any lawful manufacture of cigarettes
within the state for personal consumption.
Subd. 2. [FILING DATES; FAILURE TO FILE.] No payment of
any tax is required to be remitted with the report required
under subdivision 1. The report must be filed on or before the
tenth day following the end of each calendar month, regardless
of whether or not the person shipped, manufactured, possessed,
received, stored, or warehoused any cigarettes into or within
Minnesota during the previous month, unless the commissioner
determines that a longer filing period is appropriate for a
particular person.
Subd. 3. [COMMON CARRIERS.] Common carriers and contract
carriers transporting cigarettes into this state shall file with
the commissioner reports of all such shipments other than those
which are delivered to public warehouses of first destination in
this state, licensed under the provisions of chapter 231. The
reports must be filed monthly on or before the tenth day of each
month and must show with respect to deliveries made in the
preceding month: the date, point of origin, point of delivery,
name of consignee, the quantity of cigarettes delivered, and any
other information the commissioner requires.
A common carrier or a contract carrier transporting
cigarettes into Minnesota shall permit examination by the
commissioner of its records relating to the shipment of
cigarettes.
Subd. 4. [CIGARETTE CONSUMERS.] A person who files a
cigarette consumer return as required by this chapter may
fulfill the requirements of this section by indicating on the
cigarette consumer's return which of the items reported on the
return were transported into the state by the consumer. The
requirement of filing an informational report does not apply to
consumers who import fewer than 200 cigarettes into this state.
Sec. 12. [297F.12] [INFORMATIONAL REPORTS; TOBACCO
PRODUCTS.]
Subdivision 1. [GENERAL RULE.] The transportation of
tobacco products into this state by means other than common
carrier must be reported to the commissioner within 30 days with
the following exceptions:
(1) transportation of not more than 50 cigars, not more
then ten ounces of snuff or snuff powder, or not more than one
pound of smoking or chewing tobacco or other tobacco products
not specifically mentioned;
(2) transportation by a person with a place of business
outside the state, who is licensed as a distributor under this
chapter, of tobacco products sold by the person to a retailer in
this state.
The report must be made in the form and manner prescribed
by the commissioner.
Subd. 2. [COMMON CARRIERS.] Common carriers transporting
tobacco products into this state shall file with the
commissioner reports of all such shipments other than those
which are delivered to public warehouses of first destination in
this state, licensed under the provisions of chapter 231. The
reports must be filed monthly on or before the tenth day of each
month and shall show with respect to deliveries made in the
preceding month: the date, point of origin, point of delivery,
name of consignee, description and quantity of tobacco products
delivered, and any other information required by the
commissioner.
A common carrier transporting tobacco products into
Minnesota shall permit examination by the commissioner of its
records relating to the shipment of tobacco products.
Subd. 3. [MANUFACTURERS.] A manufacturer of tobacco
products as defined by this chapter shall report in the form and
manner prescribed by the commissioner all sales of tobacco
products to Minnesota licensed distributors, subjobbers,
retailers, or to any locations within the state. The report is
due on the 18th day of the month following the reporting period.
Sec. 13. [297F.13] [REQUIRED RECORDS.]
Subdivision 1. [CIGARETTE DISTRIBUTOR.] (a) A distributor
shall keep at each licensed place of business complete and
accurate records for that place of business. The records must
include: itemized invoices of cigarettes held, purchased,
manufactured, or brought in or caused to be brought in from
outside the state, and all sales of cigarettes made, except
sales to the ultimate consumer. These records must show the
names and addresses of purchasers, the inventory of all stamps
affixed and unaffixed and all cigarettes on hand at the close of
each period for which a return is required, and any other
pertinent papers and documents relating to the purchase, sale,
or disposition of cigarettes.
(b) A distributor or subjobber who sells cigarettes at
retail must maintain a separate inventory, substantiated with
invoices for cigarettes that were acquired for retail sale.
(c) When a licensed distributor sells cigarettes
exclusively to the ultimate consumer at the address given in the
license, no invoice of those sales is required, but itemized
invoices must be made of all cigarettes transferred to other
retail outlets owned or controlled by that licensed distributor.
(d) All books, records, and other documents required by
this chapter shall be preserved for a period of at least 3-1/2
years after the date of the documents or the date of the entries
appearing in the records, unless the commissioner in writing
authorizes their destruction or disposal at an earlier date.
(e) To determine whether the distributor is in compliance
with the provisions of this chapter, at any time during usual
business hours the commissioner, or duly authorized agents or
employees, may enter a place of business of a distributor,
without a search warrant, and inspect the premises, the records
required to be kept under this chapter, and the packages of
cigarettes and the vending devices in that place of business.
If the commissioner, or an agent or employee of the
commissioner, is denied free access or is hindered or interfered
with in making the examination, the commissioner may revoke the
distributor's license.
Subd. 2. [TOBACCO PRODUCTS DISTRIBUTOR.] (a) A distributor
shall keep at each licensed place of business complete and
accurate records for that place of business, including itemized
invoices of tobacco products held, purchased, manufactured,
brought in or caused to be brought in from outside the state, or
shipped or transported to retailers in this state, and all sales
of tobacco products made, except sales to the ultimate consumer.
(b) When a licensed distributor sells tobacco products
exclusively to the ultimate consumer at the address given in the
license, no invoice of those sales is required, but itemized
invoices must be made of all tobacco products transferred to
other retail outlets owned or controlled by that licensed
distributor.
(c) All books, records, and other documents required by
this chapter must be preserved for a period of at least 3-1/2
years after the date of the documents or the date of the entries
appearing in the records, unless the commissioner authorizes in
writing their destruction or disposal at an earlier date.
(d) To determine whether the distributor is in compliance
with the provisions of this chapter, at any time during usual
business hours the commissioner, or duly authorized agents or
employees, may enter a place of business of a distributor,
without a search warrant, and inspect the premises, the records
required to be kept under this chapter, and the tobacco products
in that place of business. If the commissioner, or an agent or
employee of the commissioner, is denied free access or is
hindered or interfered with in making the examination, the
commissioner may revoke the distributor's license.
Subd. 3. [DISTRIBUTOR TO PRESERVE COPIES OF INVOICES.] A
person who sells cigarettes or tobacco products to persons other
than the ultimate consumer shall render with each sale itemized
invoices showing the seller's name and address, the purchaser's
name and address, the date of sale, and all prices and
discounts, and shall preserve legible copies of all such
invoices for 3-1/2 years from the date of the sale.
Subd. 4. [RETAILER AND SUBJOBBER TO PRESERVE PURCHASE
INVOICES.] Every retailer and subjobber shall procure itemized
invoices of all cigarettes or tobacco products purchased. The
invoices shall show the name and address of the seller and the
date of purchase.
The retailer and subjobber shall preserve a legible copy of
each invoice for one year from the date of purchase. Copies
should be numbered and kept in chronological order.
To determine whether the business is in compliance with the
provisions of this chapter and sections 325D.30 to 325D.42, at
any time during usual business hours, the commissioner, or duly
authorized agents and employees, may enter any place of business
of a retailer or subjobber without a search warrant and inspect
the premises, the records required to be kept under this
chapter, and the packages of cigarettes, tobacco products, and
vending devices contained on the premises.
Subd. 5. [CIGARETTES AND TOBACCO PRODUCTS; RECORDS OF
DELIVERY AND SHIPMENT.] Records of all deliveries or shipments
of cigarettes or tobacco products from any public warehouse of
first destination in this state (which is subject to the
provisions of and licensed under chapter 231), must be kept by
the warehouse and made available to the commissioner for
inspection. The records must show the name and address of the
consignee, the date, the quantity of cigarettes or tobacco
products delivered, and any other information required by the
commissioner. These records must be preserved for one year from
the date of delivery of the cigarettes or tobacco products.
Sec. 14. [297F.14] [REFUNDS.]
Subdivision 1. [GENERAL RIGHT TO REFUND.] If cigarettes or
tobacco products, upon which the tax imposed by this chapter has
been reported and paid, are shipped or transported by the
distributor to consumers to be consumed outside the state, or to
retailers or subjobbers outside the state to be sold by those
retailers or subjobbers outside the state, or are returned to
the manufacturer by the distributor, or destroyed by the
distributor, refund of the tax or credit may be made to the
distributor.
Subd. 2. [OVERPAYMENT OF TAX.] An overpayment of the tax
imposed under this chapter may be refunded to the taxpayer.
Subd. 3. [CREDIT AGAINST TAX.] The commissioner may credit
the amount determined under this section against taxes otherwise
payable under this chapter by the taxpayer.
Subd. 4. [BAD DEBT.] The commissioner may adopt rules
providing a refund of the tax paid under this chapter if the tax
paid qualifies as a bad debt under section 166(a) of the
Internal Revenue Code.
Subd. 5. [SOURCE OF REFUND; CIGARETTES.] The commissioner
of finance shall pay the cigarette tax refund out of the general
fund. The refunds are apportioned to the same accounts and
funds in the general fund to which the tax payments were
deposited, except no refunds may be apportioned to the general
obligation special tax bond debt service account.
Subd. 6. [SOURCE OF REFUND; TOBACCO PRODUCTS.] The
commissioner of finance shall pay the tobacco products tax
refund out of the general fund.
Subd. 7. [ANNUAL APPROPRIATION.] There is appropriated
annually from the general fund to the commissioner of finance
the amount necessary to make the refunds provided by this
section.
Sec. 15. [297F.15] [EXAMINATIONS AND AUDITS.]
Subdivision 1. [EXAMINATION OF TAXPAYER.] To determine the
accuracy of a return or a report, or for the purpose of
collection, or in fixing liability or verifying information
under any tax under this chapter, the commissioner may make
reasonable examinations or investigations of a taxpayer's place
of business, tangible personal property, equipment, computer
systems and facilities, pertinent books, records, papers,
vouchers, computer printouts, accounts, and documents.
Subd. 2. [ACCESS TO RECORDS.] When conducting an
investigation or an audit of a taxpayer, or for the purpose of
collection, or in fixing liability or verifying information
under any tax under this chapter, the commissioner may examine,
except where privileged by law, the relevant records and files
of any person, business, institution, financial institution,
state agency, agency of the United States government, or agency
of any other state where permitted by statute, agreement, or
reciprocity. The commissioner may compel production of these
records by subpoena. A subpoena may be served directly by the
commissioner.
Subd. 3. [POWER TO COMPEL TESTIMONY.] In the
administration of any tax under this chapter, the commissioner
may:
(1) administer oaths or affirmations and compel by subpoena
the attendance of witnesses, testimony, and the production of a
person's pertinent books, records, papers, and other data for
inspection and copying;
(2) examine under oath or affirmation any person regarding
the business of any taxpayer concerning any relevant matter
incident to the administration of any tax under this chapter.
The fees of witnesses required by the commissioner to attend a
hearing are equal to those allowed to witnesses appearing before
courts of this state. The fees must be paid in the manner
provided for the payment of other expenses incident to the
administration of any tax under this chapter; and
(3) in addition to other remedies that may be available,
bring an action in equity by the state against a taxpayer for an
injunction ordering the taxpayer to file a complete and proper
return or amended return. The district courts of this state
have jurisdiction over the action and disobedience of an
injunction issued under this clause may be punished as a
contempt of district court.
Subd. 4. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY
IS KNOWN.] An investigation may extend to a person that the
commissioner determines has access to information that may be
relevant to the examination or investigation. When a subpoena
requiring the production of records as described in subdivision
2 is served on a third-party recordkeeper, written notice of the
subpoena must be mailed to the taxpayer and to any other person
who is identified on the subpoena. The notices must be given
within three days of the day on which the subpoena is served.
Notice to the taxpayer required by this section is sufficient if
it is mailed to the last address on record with the
commissioner. The provisions of this subdivision relating to
notice to the taxpayer or other parties identified in the
subpoena do not apply if there is reasonable cause to believe
that the giving of notice may lead to attempts to conceal,
destroy, or alter records relevant to the examination, to
prevent the communication of information from other persons
through intimidation, bribery, or collusion, or to flee to avoid
prosecution, testifying, or production of records.
Subd. 5. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY
IS NOT KNOWN.] A subpoena that does not identify the person or
persons whose tax liability is investigated may be served only
if:
(1) the subpoena relates to the investigation of a
particular person or an ascertainable group or class of persons;
(2) there is reasonable basis for believing that the person
or group or class of persons may fail or may have failed to
comply with the tax laws administered by the commissioner;
(3) the information sought to be obtained from the
examination of the records, and the identity of the person or
persons with respect to whose liability the subpoena is issued,
is not readily available from other sources;
(4) the subpoena is clear and specific concerning the
information sought to be obtained; and
(5) the information sought to be obtained is limited solely
to the scope of the investigation.
The party served with a subpoena that does not identify the
person or persons with respect to whose tax liability the
subpoena is issued may, within 20 days after service of the
subpoena, petition the district court in the judicial district
in which that party is located for a determination whether the
commissioner has complied with all the requirements in clauses
(1) to (5), and thus, whether the subpoena is enforceable. If
no petition is made by the party served within the time
prescribed, the subpoena has the effect of a court order.
Subd. 6. [REQUEST BY TAXPAYER FOR SUBPOENA.] When the
commissioner has the power to issue a subpoena for investigative
or auditing purposes, the commissioner shall honor a reasonable
request by the taxpayer to issue a subpoena on the taxpayer's
behalf in connection with the investigation or audit.
Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF
SUBPOENA.] Disobedience of subpoenas issued under this section
shall be punished by the district court of the district in which
the party served with the subpoena is located, in the same
manner as contempt of the district court.
Subd. 8. [COST OF PRODUCTION OF RECORDS.] The cost of
producing records of a third party required by a subpoena must
be paid by the taxpayer, if the taxpayer requests the subpoena
to be issued, or if the taxpayer has the records available but
has refused to provide them to the commissioner. In other cases
when the taxpayer cannot produce records and the commissioner
then initiates a subpoena for third-party records, the
commissioner shall pay the reasonable cost of producing the
records. The commissioner may later assess the reasonable costs
against the taxpayer if the records contribute to the
determination of an assessment of tax against the taxpayer.
Subd. 9. [PHYSICAL INVENTORY.] The commissioner or the
commissioner's authorized agents may, as considered necessary,
require a cigarette or tobacco products distributor to furnish a
physical inventory of all cigarettes or tobacco products in
stock. The inventory must contain the information that the
commissioner requests and must be certified by an officer of the
corporation.
Subd. 10. [OFFSET.] Upon audit, if a distributor's return
reflects an overage resulting from an inventory counting error,
the overage shall be offset against a shortage, if any, in the
month immediately preceding the month of the overage. If any
overage remains after that offset, the remainder may only be
offset against a shortage, if any, in the month immediately
following the month of the overage. If the commissioner
determines that the overage is attributable to a mistake by the
distributor other than an inventory counting error, the
commissioner may permit the overage to be offset against a
shortage in any month or months during the 12-month period
immediately following the month when the overage was discovered
upon audit.
Sec. 16. [297F.16] [ASSESSMENTS.]
Subdivision 1. [GENERAL RULE.] The commissioner shall make
determinations, corrections, and assessments with respect to any
tax under this chapter, including interest, additions to taxes,
and assessable penalties.
Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails
to file a required return, the commissioner, from information in
the commissioner's possession or obtainable by the commissioner,
may make a return for the taxpayer. The return is prima facie
correct and valid. The commissioner may use statistical or
other sampling techniques consistent with generally accepted
auditing standards in examining returns or records and making
assessments.
Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO
TAXPAYER.] (a) When a return has been filed and the commissioner
determines that the tax disclosed by the return is different
than the tax determined by the examination, the commissioner
shall send an order of assessment to the taxpayer. When no
return has been filed, the commissioner may make a return for
the taxpayer under subdivision 2 or may send an order of
assessment under this subdivision. The order must explain the
basis for the assessment and must explain the taxpayer's appeal
rights. An order of assessment is final when made but may be
reconsidered by the commissioner under this chapter.
(b) Penalties under this chapter are not imposed and no
collection action can be taken, including the filing of liens
under section 270.69, if the amount shown on the order is paid
to the commissioner:
(1) within 60 days after notice of the amount and demand
for its payment have been mailed to the taxpayer by the
commissioner; or
(2) if an administrative appeal is filed under this
chapter, or a tax court appeal is filed under chapter 271,
within 60 days following final determination of the appeal if
the appeal is based upon a constitutional challenge to the tax,
and if not, when the decision of the tax court is made.
Subd. 4. [ERRONEOUS REFUNDS OR CREDITS.] An erroneous
refund or credit is considered an underpayment of tax on the
date made. An assessment of a deficiency arising out of an
erroneous refund or credit must be made within 3-1/2 years from
the date prescribed for filing the return, plus any extension of
time granted for filing the return, but only if filed within the
extended time, or two years from the time the tax is paid in
full, whichever period expires later.
Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or
assessment of tax made by the commissioner is prima facie
correct and valid. The taxpayer has the burden of establishing
its incorrectness or invalidity in any related action or
proceeding.
Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The
commissioner, on examining returns of a taxpayer for more than
one year or period, may issue one order covering the period
under examination that reflects the aggregate refund or
additional tax due.
Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment,
sent postage prepaid by United States mail to the taxpayer at
the taxpayer's last known address, is sufficient even if the
taxpayer is deceased or is under a legal disability, or, in the
case of a corporation, has terminated its existence, unless the
department has been provided with a new address by a party
authorized to receive notices of assessment.
Sec. 17. [297F.17] [LIMITATIONS ON TIME FOR ASSESSMENT OF
TAX.]
Subdivision 1. [GENERAL RULE.] Except as otherwise
provided in this chapter, the amount of any tax due must be
assessed within 3-1/2 years after a return is filed. The taxes
are considered assessed within the meaning of this section when
the commissioner has prepared a notice of tax assessment and
mailed it to the person required to file a return to the post
office address given in the return. The notice of tax
assessment must be sent by mail to the post office address given
in the return and the record of the mailing is presumptive
evidence of the giving of such notice, and such records must be
preserved by the commissioner.
Subd. 2. [DATE OF FILING.] For purposes of this chapter, a
return filed before the last day prescribed by law for its
filing is considered filed on the last day.
Subd. 3. [FALSE OR FRAUDULENT RETURN OR CLAIM FOR REFUND;
NO RETURN.] When a person required to file a return under this
chapter files a false or fraudulent return or claim for refund,
or fails to file a return, the tax may be assessed, and a
proceeding in court for the collection of such tax may be begun
at any time.
Subd. 4. [OMISSION OVER 25 PERCENT.] If the person
required to file the return omits from the return a dollar
amount properly includable in it that is in excess of 25 percent
of the dollar amount reported in the return, the tax may be
assessed, or a proceeding in court for the collection of such
tax may be begun, at any time within 6-1/2 years after the
return was filed.
Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise
provided in this chapter, a claim for a refund of an overpayment
of tax must be filed within 3-1/2 years from the date prescribed
for filing the return, plus any extension of time granted for
filing the return, but only if filed within the extended time,
or one year after the date of assessment, whichever period
expires later.
Subd. 6. [TIME LIMIT FOR BAD DEBT DEDUCTION.] Claims for
refund must be filed with the commissioner within one year of
the filing date of the taxpayer's federal income tax return
containing the bad debt deduction that is being claimed.
Claimants under this subdivision are subject to the notice
requirements of section 289A.38, subdivision 7.
Subd. 7. [CONSENT TO EXTEND TIME.] If before the
expiration of the time prescribed in this section for the
assessment of the tax, the commissioner and the person filing
the return consent in writing to an extension of time for the
assessment of the tax, the tax may be assessed at any time prior
to the expiration of the period agreed upon. The period so
agreed upon may be extended by subsequent agreements in writing
made before the expiration of the period previously agreed upon.
Subd. 8. [SUSPENSION OF TIME; BANKRUPTCY PROCEEDINGS.] The
time during which a tax must be assessed or collection
proceedings commenced under this chapter is suspended during the
period from the date of a filing of a petition in bankruptcy
until 30 days after notice to the commissioner that the
bankruptcy proceedings have been closed or dismissed, or that
the automatic stay has been terminated or has expired.
The suspension of the statute of limitations under this
subdivision applies to the person against whom the petition in
bankruptcy is filed, and to all other persons who may be wholly
or partially liable for the tax under this chapter.
Sec. 18. [297F.18] [INTEREST.]
Subdivision 1. [INTEREST RATE.] When interest is required
under this section, interest is computed at the rate specified
in section 270.75.
Subd. 2. [LATE PAYMENT.] If a tax under this chapter is
not paid within the time named by law for payment, the unpaid
tax bears interest from the date the tax should have been paid
until the date the tax is paid.
Subd. 3. [EXTENSIONS.] When an extension of time for
payment has been granted, interest must be paid from the date
the payment should have been made, if no extension had been
granted, until the date the tax is paid.
Subd. 4. [ADDITIONAL ASSESSMENTS.] When a taxpayer is
liable for additional taxes because of a redetermination by the
commissioner, or for any other reason, the additional taxes bear
interest from the time the tax should have been paid, without
regard to an extension allowed, until the date the tax is paid.
Subd. 5. [ERRONEOUS REFUNDS.] In the case of an erroneous
refund, interest begins to accrue from the date the refund was
paid unless the erroneous refund results from a mistake of the
department, in which case no interest or penalty is imposed,
unless the deficiency assessment is not satisfied within 60 days
of the order.
Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section
549.09, if judgment is entered in favor of the commissioner with
regard to any tax under this chapter, the judgment bears
interest at the rate given in section 270.75 from the date the
judgment is entered until the date of payment.
Subd. 7. [INTEREST ON PENALTIES.] (a) A penalty imposed
under section 297F.19, subdivisions 2 to 7, bears interest from
the date the return or payment was required to be filed or paid,
including any extensions, to the date of payment of the penalty.
(b) A penalty not included in paragraph (a) bears interest
only if it is not paid within ten days from the date of the
notice. In that case interest is imposed from the date of
notice to the date of payment.
Sec. 19. [297F.19] [CIVIL PENALTIES.]
Subdivision 1. [CIVIL ACTION; GENERAL RULE.] The
commissioner may recover the amount of any tax due and unpaid
under this chapter, as well as interest, and any penalty in a
civil action. The collection of the tax, interest, or penalty
is not a bar to any prosecution under this chapter.
Subd. 2. [PENALTY FOR FAILURE TO PAY TAX.] If a tax
imposed by this chapter is not paid within the time specified
for payment, a penalty is added to the amount required to be
shown as tax. The penalty is five percent of the tax not paid
on or before the date specified for payment of the tax if the
failure is for not more than 30 days, with an additional penalty
of five percent of the amount of tax remaining unpaid during
each additional 30 days or fraction of 30 days during which the
failure continues, not exceeding 15 percent in the aggregate.
Subd. 3. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If
a taxpayer fails to make and file a return within the time
prescribed, including an extension, a penalty of five percent of
the amount of tax not timely paid is added to the tax.
Subd. 4. [COMBINED PENALTIES.] When penalties are imposed
under subdivisions 2 and 3, the penalties imposed under both
subdivisions combined must not exceed 38 percent in the
aggregate.
Subd. 5. [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR
RULES.] If part of an additional assessment is due to negligence
or intentional disregard of the provisions of the applicable tax
laws or rules of the commissioner, but without intent to
defraud, there must be added to the tax an amount equal to ten
percent of the additional assessment.
Subd. 6. [PENALTY FOR REPEATED FAILURES TO FILE RETURNS OR
PAY TAXES.] If there is a pattern by a person of repeated
failures to timely file returns or timely pay taxes, and written
notice is given that a penalty will be imposed if such failures
continue, a penalty of 25 percent of the amount of the tax not
timely paid as a result of each such subsequent failure is added
to the tax. The penalty can be abated under the abatement
authority in section 270.07, subdivisions 1, paragraph (e), and
6.
Subd. 7. [PENALTY FOR FALSE OR FRAUDULENT RETURN;
EVASION.] If a person files a false or fraudulent return, or
attempts in any manner to evade or defeat a tax or payment of
tax, there is imposed on the person a penalty equal to 50
percent of the tax due for the period to which the return
related, less amounts paid by the person on the basis of the
false or fraudulent return.
Subd. 8. [PAYMENT OF PENALTIES.] The penalties imposed by
this section are collected and paid in the same manner as taxes.
Subd. 9. [PENALTIES ARE ADDITIONAL.] The civil penalties
imposed by this section are in addition to the criminal
penalties imposed by this chapter.
Sec. 20. [297F.20] [CRIMINAL PENALTIES.]
Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a)
A person required to file a return, report, or other document
with the commissioner who fails to do so is guilty of a
misdemeanor.
(b) A person required to pay or to collect and remit a tax
under this chapter, who fails to do so when required, is guilty
of a misdemeanor.
Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR
PAY.] (a) A person required to file a return, report, or other
document with the commissioner, who knowingly, rather than
accidentally, inadvertently, or negligently, fails to file it
when required, is guilty of a gross misdemeanor.
(b) A person required to pay or to collect and remit a tax
under this chapter, who knowingly, rather than accidentally,
inadvertently, or negligently, fails to file it when required,
is guilty of a gross misdemeanor.
Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A
person who files with the commissioner a return, report, or
other document, known by the person to be fraudulent or false
concerning a material matter, is guilty of a felony.
(b) A person who knowingly aids or assists in, or advises
in the preparation or presentation of a return, report, or other
document that is fraudulent or false concerning a material
matter, whether or not the falsity or fraud is committed with
the knowledge or consent of the person authorized or required to
present the return, report, or other document, is guilty of a
felony.
Subd. 4. [COUNTERFEITING.] Any person who makes, alters,
forges, or counterfeits a stamp, or who possesses an altered,
forged, or counterfeit stamp is guilty of a felony.
Subd. 5. [UNSTAMPED CIGARETTES; PRESUMPTION.] (a) Except
as provided in paragraph (b), whenever a package of cigarettes
is found in the place of business or in the possession of any
person without a proper stamp affixed as required by this
chapter, it is presumed that those cigarettes are kept there or
held by that person illegally.
(b) This presumption does not apply to:
(1) cigarettes in the place of business or in the
possession of a licensed distributor;
(2) cigarettes in the possession of a common carrier or
sleeping car company engaged in interstate commerce;
(3) cigarettes held in a public warehouse of first
destination in this state, in the unbroken, original shipping
containers, subject to delivery or shipping instructions from
the manufacturer or a distributor;
(4) cigarettes in the possession of a person other than a
distributor in quantities of 200 cigarettes or less, when those
cigarettes have had the individual packages or seals broken, and
when they are intended for personal use and not to be sold or
offered for sale;
(5) cigarettes sold under circumstances in which the tax
cannot legally be imposed because of the laws or constitution of
the United States.
Subd. 6. [UNSTAMPED CIGARETTES; UNTAXED TOBACCO
PRODUCTS.] (a) A person who possesses, receives, or transports
more than 200 but fewer than 5,000 unstamped cigarettes, or up
to $100 worth of untaxed tobacco products is guilty of a
misdemeanor.
(b) A person who possesses, receives, or transports 5,000
or more, but fewer than 20,001 unstamped cigarettes, or up to
$500 worth of untaxed tobacco products is guilty of a gross
misdemeanor.
(c) A person who possesses, receives, or transports more
than 20,000 unstamped cigarettes, or $500 or more worth of
untaxed tobacco products is guilty of a felony.
Subd. 7. [SALE OF CIGARETTE PACKAGES WITH INDIAN
STAMP.] (a) A retailer doing business off of an Indian
reservation who sells or offers to sell more than 200 but fewer
than 5,000 cigarettes with Indian stamps is guilty of a
misdemeanor.
(b) A retailer doing business off of an Indian reservation
who sells or offers to sell 5,000 or more, but fewer than 20,001
cigarettes with Indian stamps is guilty of a gross misdemeanor.
(c) A retailer doing business off of an Indian reservation
who sells or offers to sell more than 20,000 cigarettes with
Indian stamps is guilty of a felony.
Subd. 8. [SALES AFTER LICENSE REVOCATION.] A person
selling cigarettes or tobacco products after the person's
license has been revoked is guilty of a felony.
Subd. 9. [PURCHASES FROM UNLICENSED SELLERS.] (a) A
retailer, subjobber, or consumer who purchases from an
unlicensed seller more than 200 but fewer than 5,000 cigarettes
or up to $100 worth of tobacco products is guilty of a
misdemeanor.
(b) A retailer, subjobber, or consumer who purchases from
an unlicensed seller 5,000 or more, but fewer than 20,001
cigarettes or up to $500 worth of untaxed tobacco products is
guilty of a gross misdemeanor.
(c) A retailer, subjobber, or consumer who purchases from
an unlicensed seller more than 20,000 cigarettes or $500 or more
worth of tobacco products is guilty of a felony.
Subd. 10. [PENALTIES ARE ADDITIONAL.] Criminal penalties
imposed by this section are in addition to any civil penalties
imposed by this chapter.
Subd. 11. [STATUTE OF LIMITATIONS.] Notwithstanding
section 628.26, or any other provision of the criminal laws of
this state, an indictment may be found and filed, or a complaint
filed, upon a criminal offense named in this section, in the
proper court within six years after the offense is committed.
Subd. 12. [OTHER PENALTIES.] A violation of this chapter
unless otherwise specified is a misdemeanor.
Sec. 21. [297F.21] [CONTRABAND.]
Subdivision 1. [CONTRABAND DEFINED.] The following are
declared to be contraband and therefore subject to civil and
criminal penalties under this chapter:
(a) Cigarette packages which do not have stamps affixed to
them as provided in this chapter, including but not limited to
(i) packages with illegible stamps and packages with stamps that
are not complete or whole even if the stamps are legible, and
(ii) all devices for the vending of cigarettes in which packages
as defined in item (i) are found, including all contents
contained within the devices.
(b) A device for the vending of cigarettes and all packages
of cigarettes, where the device does not afford at least partial
visibility of contents. Where any package exposed to view does
not carry the stamp required by this chapter, it shall be
presumed that all packages contained in the device are unstamped
and contraband.
(c) A device for the vending of cigarettes to which the
commissioner or authorized agents have been denied access for
the inspection of contents. In lieu of seizure, the
commissioner or an agent may seal the device to prevent its use
until inspection of contents is permitted.
(d) A device for the vending of cigarettes which does not
carry the name and address of the owner, plainly marked and
visible from the front of the machine.
(e) A device including, but not limited to, motor vehicles,
trailers, snowmobiles, airplanes, and boats used with the
knowledge of the owner or of a person operating with the consent
of the owner for the storage or transportation of more than
5,000 cigarettes which are contraband under this subdivision.
When cigarettes are being transported in the course of
interstate commerce, or are in movement from either a public
warehouse to a distributor upon orders from a manufacturer or
distributor, or from one distributor to another, the cigarettes
are not contraband, notwithstanding the provisions of clause (a).
(f) Cigarette packages or tobacco products obtained from an
unlicensed seller.
(g) Cigarette packages offered for sale or held as
inventory in violation of section 297F.20, subdivision 7.
(h) Tobacco products on which the tax has not been paid by
a licensed distributor.
Subd. 2. [SEIZURE.] Cigarettes, tobacco products, or other
property made contraband by subdivision 1 may be seized by the
commissioner or authorized agents or by any sheriff or other
police officer, with or without process, and are subject to
forfeiture as provided in subdivisions 3 and 4.
Subd. 3. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the
seizure of any alleged contraband, the person making the seizure
shall make available an inventory of the property seized to the
person from whom the seizure was made, if known, and file a copy
with the commissioner. Within ten days after the date of
service of the inventory, the person from whom the property was
seized or any person claiming an interest in the property may
file with the commissioner a demand for a judicial determination
of the question as to whether the property was lawfully subject
to seizure and forfeiture. The commissioner, within 60 days,
shall institute an action in the district court of the county
where the seizure was made to determine the issue of forfeiture.
(b) The action must be brought in the name of the state and
must be prosecuted by the county attorney or by the attorney
general. The court shall hear the action without a jury and
shall try and determine the issues of fact and law involved.
(c) When a judgment of forfeiture is entered, the
commissioner may, unless the judgment is stayed pending an
appeal, either:
(1) deliver the forfeited property to the commissioner of
human services for use by patients in state institutions;
(2) cause it to be destroyed; or
(3) cause it to be sold at public auction as provided by
law.
(d) If a demand for judicial determination is made and no
action commenced as provided in this subdivision, the property
must be released by the commissioner and returned to the person
entitled to it. If no demand is made, the property seized is
considered forfeited to the state by operation of law and may be
disposed of by the commissioner as provided in the case of a
judgment of forfeiture. When the commissioner is satisfied that
a person from whom property is seized was acting in good faith
and without intent to evade the tax imposed by this chapter, the
commissioner shall release the property seized without further
legal proceedings.
Subd. 4. [DISPOSAL OF OTHER PROPERTY.] (a) The property
described in subdivision 1, clause (e), must be confiscated
after conviction of the person from whom it was seized, upon
compliance with the following procedure: the commissioner or
agents shall file with the court a separate complaint against
the property, describing it and charging its use in the
specified violation, and specifying substantially the time and
place of the unlawful use. A copy of the complaint must be
served upon the defendant or person in charge of the property at
the time of seizure, if any.
(b) If the person arrested is acquitted, the court shall
dismiss the complaint against the property and order it returned
to the persons legally entitled to it. Upon conviction of the
person arrested, the court shall issue an order directed to any
person known or believed to have any right or title or interest
in, or lien upon, any of the property, and to persons unknown
claiming any right, title, interest, or lien in it, describing
the property; and
(1) stating that it was seized and that a complaint against
it, charging the specified violation, has been filed with the
court,
(2) requiring the persons to file with the court
administrator their answer to the complaint, setting forth any
claim they may have to any right or title to, interest in, or
lien upon the property, within 30 days after the service of the
order, and
(3) notifying them in substance that if they fail to file
their answer within the prescribed time, the property will be
ordered sold by the commissioner or the commissioner's agents.
(c) The court shall cause the order to be served on any
person known or believed to have any right, title, interest, or
lien as in the case of a summons in a civil action, and on
unknown persons by publication, as provided for service of
summons in a civil action. If an answer is filed within the
time provided, the court shall fix a time for hearing, which
shall be not less than ten nor more than 30 days after the time
for filing answer expires. If no answer is filed within the
time prescribed, the court shall, upon affidavit by the court
administrator, setting forth the fact, order the property sold
by the commissioner or agents. Seventy-five percent of the
proceeds of the sale of forfeited property, after payment of
seizure, storage, forfeiture, and sale expenses, must be
forwarded to the commissioner for deposit as a supplement to its
operating fund or similar fund for official use, and 25 percent
must be forwarded to the county attorney or other prosecuting
agency that handled the forfeiture for deposit as a supplement
to its operating fund or similar fund for prosecutorial purposes.
(d) At the time fixed for hearing, unless continued for
cause, the matter must be heard and determined by the court
without a jury as in other civil actions. If the court finds
that the property, or any part of it, was used in the violation
specified in the complaint, it shall order the property
unlawfully used, and sold as provided by law, unless the owner
shows to the satisfaction of the court that the owner had no
notice or knowledge or reason to believe that the property was
used or intended to be used in the violation. The officer
making a sale, after deducting the expense of keeping the
property, the fee for seizure, and the costs of the sale, shall
pay all liens according to their priority, which are established
at the hearing as being bona fide, and as existing without the
lienor having any notice or knowledge that the property was
being used or was intended to be used for or in connection with
the violation specified in the order of the court, and shall pay
the balance of the proceeds to the commissioner for official use
and sharing in the manner provided in paragraph (c). A sale
under the provisions of this section operates to free the
property sold from any and all liens on it. An appeal from the
order of the district court lies as in other civil cases.
(e) At any time after seizure of the articles specified in
this subdivision, and before the hearing provided for, the
property must be returned to the owner or person having a legal
right to its possession, upon execution of a good and valid bond
to the state, with corporate surety, in the sum of not less than
$100 and not more than double the value of the property seized,
to be approved by the court in which the case is triable, or a
judge of it, conditioned to abide any order and the judgment of
the court, and to pay the full value of the property at the time
of seizure. The commissioner may dismiss the proceedings
outlined in this subdivision when the commissioner considers it
in the best interests of the state to do so.
Sec. 22. [297F.22] [ADMINISTRATIVE REVIEW.]
Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] A
taxpayer may obtain reconsideration by the commissioner of an
order assessing any tax imposed by this chapter, a denial of a
request for abatement of penalty, or a denial of a claim for
refund by filing an administrative appeal under subdivision 3.
A taxpayer cannot obtain reconsideration under this section if
the action taken by the commissioner is the outcome of an
administrative appeal.
Subd. 2. [NOTICE DATE.] For purposes of this section, the
term "notice date" means the date of the order adjusting the tax
or order denying a request for abatement, or, in the case of a
denied refund, the date of the notice of denial.
Subd. 3. [TIME AND CONTENT FOR ADMINISTRATIVE
APPEAL.] Within 60 days after the notice date, the taxpayer must
file a written appeal with the commissioner. The appeal need
not be in any particular form but must contain the following
information:
(1) the name and address of the taxpayer;
(2) if a corporation, the state of incorporation of the
taxpayer, and the principal place of business of the
corporation;
(3) the Minnesota identification number or social security
number of the taxpayer;
(4) the type of tax involved;
(5) the date;
(6) the tax years or period involved and the amount of tax
involved for each year or period;
(7) the findings in the notice that the taxpayer disputes;
(8) a summary statement that the taxpayer relies on for
each exception; and
(9) the taxpayer's signature or signature of the taxpayer's
duly authorized agent.
Subd. 4. [EXTENSIONS.] When requested in writing and
within the time allowed for filing an administrative appeal, the
commissioner may extend the time for filing an appeal for a
period of not more than 30 days from the expiration of the 60
days from the notice date.
Subd. 5. [DETERMINATION OF APPEAL.] On the basis of
applicable law and available information, the commissioner shall
determine the validity, if any, in whole or part of the appeal
and notify the taxpayer of the decision. This notice must be in
writing and contain the basis for the determination.
Subd. 6. [AGREEMENT DETERMINING TAX LIABILITY.] When it
appears to be in the best interests of the state, the
commissioner may settle any taxes, penalties, or interest that
the commissioner has under consideration by virtue of an appeal
filed under this section. An agreement must be in writing and
signed by the commissioner and the taxpayer, or the taxpayer's
representative authorized by the taxpayer to enter into an
agreement. The agreement must be filed in the office of the
commissioner.
Subd. 7. [APPEAL OF AN ADMINISTRATIVE
DETERMINATION.] Following the determination or settlement of an
appeal and notwithstanding any period of limitations for making
assessments or other determinations to the contrary, the
commissioner must issue an order reflecting that disposition.
If the statute of limitations for making assessments or other
determinations would have expired before the issuance of this
order, except for this section, the order is limited to issues
or matters contained in the appealed determination. Except in
the case of an agreement determining tax under this section, the
order is appealable to the Minnesota tax court under section
271.06.
Subd. 8. [APPEAL WHERE NO DETERMINATION.] If the
commissioner does not make a determination within six months of
the filing of an administrative appeal, the taxpayer may appeal
to tax court.
Subd. 9. [INAPPLICABILITY OF ADMINISTRATIVE PROCEDURE
ACT.] An appeal under this section is not a contested case
governed by chapter 14.
Sec. 23. [297F.23] [JUDICIAL REVIEW.]
In lieu of an administrative appeal under this chapter, a
person aggrieved by an order of the commissioner fixing a tax,
penalty, or interest under this chapter may, within 60 days from
the date of the notice of the order, appeal to the tax court in
the manner provided under section 271.06.
Sec. 24. [PURPOSE.]
It is the intent of the legislature to simplify Minnesota's
cigarette and tobacco products tax laws by consolidating and
recodifying tax administration and compliance provisions now
contained throughout Minnesota Statutes, chapter 297. Due to
the complexity of the recodification, prior provisions are
repealed on the effective date of the new provisions. The
repealed provisions, however, continue to remain in effect until
superseded by the analogous provision in the new law.
Sec. 25. [REPEALER.]
Minnesota Statutes 1996, sections 297.01; 297.02; 297.03;
297.031; 297.032; 297.04; 297.041; 297.05; 297.06; 297.07;
297.075; 297.08; 297.09; 297.10; 297.11; 297.12; 297.13; 297.21;
297.22; 297.23; 297.24; 297.25; 297.26; 297.31; 297.32; 297.321;
297.33; 297.335; 297.34; 297.35; 297.36; 297.37; 297.38;
297.385; 297.39; 297.40; 297.41; 297.42; 297.43; and 297.44, are
repealed.
Sec. 26. [EFFECTIVE DATE.]
Sections 1, 7, and 24 are effective the day following final
enactment.
Sections 2 to 6 and 8 to 12, 14, 19, 22, and 23 are
effective for returns, reports, taxes, or other payments first
becoming due on or after August 1, 1997.
Sections 13, 21, and 25 are effective August 1, 1997.
Sections 15 and 16 are effective for audits or
investigations initiated on or after August 1, 1997.
Section 17 is effective for returns becoming due on or
after August 1, 1997.
Section 18 is effective for interest on amounts first
becoming due to the commissioner on or after August 1, 1997.
Section 20 is effective for crimes committed on or after
August 1, 1997.
ARTICLE 2
CROSS-REFERENCE CORRECTIONS
Section 1. Minnesota Statutes 1996, section 16A.26, is
amended to read:
16A.26 [ONE DEPOSITORY ACCOUNT FOR EACH TAX.]
Notwithstanding sections 297.13 297F.10, 298.17, 298.282,
298.39, 298.396, 297C.02 to 297C.08 and similar laws to the
contrary relating to the depositing, disposition, or
apportionment of tax receipts, the commissioner may use one
depository account for each tax. To do so, there must be enough
information to identify and dispose of or apportion the tax
under law. The commissioner shall ask the appropriate officials
for the transfers and necessary certifications. The
commissioner may issue directives to carry out this section.
Sec. 2. Minnesota Statutes 1996, section 16A.661,
subdivision 3, is amended to read:
Subd. 3. [ESTABLISHMENT OF DEBT SERVICE FUND;
APPROPRIATION OF DEBT SERVICE FUND MONEY.] (a) There is
established within the state bond fund a separate and special
account designated as a general obligation special tax bond debt
service account. There must be credited to this debt service
account in each fiscal year from the tobacco tax revenue fund
established in section 297.13 297F.10 an amount sufficient to
increase the balance on hand in the debt service account on each
December 1 to an amount equal to the full amount of principal
and interest to come due on all outstanding bonds whose debt
service is payable primarily from proceeds of the tax to and
including the second following July 1. The money on hand in the
debt service account must be used solely for the payment of the
principal of, and interest on, the bonds, and is appropriated
for this purpose. This appropriation does not cancel as long as
any of the bonds remain outstanding.
(b) There is established within the state bond fund a
separate and special account designated as a general obligation
special tax bond debt service account. There must be credited
to this debt service account in each fiscal year from the sports
and health club sales tax revenue fund established in section
297A.44 an amount sufficient to increase the balance on hand in
the debt service account on each December 1 to an amount equal
to the full amount of principal and interest to come due on all
outstanding bonds whose debt service is payable primarily from
proceeds of the tax to and including the second following July
1. The money on hand in the debt service account must be used
solely for the payment of the principal of, and interest on, the
bonds, and is appropriated for this purpose. This appropriation
does not cancel as long as any of the bonds remain outstanding.
Sec. 3. Minnesota Statutes 1996, section 16A.6701,
subdivision 1, is amended to read:
Subdivision 1. [STATE LICENSE AND SERVICE FEES.] For
purposes of section 16A.67, subdivision 3, and this section, the
term "state license and service fees" means, and refers to, all
license fees, service fees, and charges imposed by law and
collected by any state officer, agency, or employee, which are
listed below or which are defined as departmental earnings under
section 16A.1285, subdivision 1, and the use of which is not
otherwise restricted by law, and which are not required to be
credited or transferred to a fund other than the general fund:
Minnesota Statutes 1994, sections 3.9221; 5.12; 5.14; 5.16;
5A.04; 6.58; 13.03, subdivision 10; 16A.155; 16A.48; 16A.54;
16A.72; 16B.59; 16B.70; 17A.04; 18.51, subdivision 2; 18.53;
18.54; 18C.551; 19.58; 19.64; 27.041, subdivision 2, clauses (d)
and (e); 27.07, subdivision 5; 28A.08; 32.071; 32.075; 32.392;
35.71; 35.824; 35.95; 41C.12; 45.027, subdivisions 3 and 6;
46.041, subdivision 1; 46.131, subdivisions 2, 7, 8, 9, and 10;
47.101, subdivision 2; 47.54, subdivisions 1 and 4; 47.62,
subdivision 4; 47.65; 48.475, subdivision 1; 48.61, subdivision
7; 48.93; 49.36, subdivision 1; 52.01; 52.203; 53.03,
subdivisions 1, 5, and 6; 53.09, subdivision 1; 53A.03; 53A.05,
subdivision 1; 53A.081, subdivision 3; 54.294, subdivision 1;
55.04, subdivision 2; 55.095; 56.02; 56.04; 56.10; 59A.03,
subdivision 2; 59A.06, subdivision 3; 60A.14, subdivisions 1 and
2; 60A.23, subdivision 8; 60K.19, subdivision 5; 65B.48,
subdivision 3; 70A.14, subdivision 4; 72B.04, subdivision 10;
79.251, subdivision 5; 80A.28, subdivisions 1, 2, 3, 4, 5, 6, 7,
7a, 8, and 9; 80C.04, subdivision 1; 80C.07; 80C.08, subdivision
1; 80C.16, subdivisions 2 and 3; 80C.18, subdivision 2; 82.20,
subdivision 8 and 9; 82A.04, subdivision 1; 82A.08, subdivision
2; 82A.16, subdivisions 2 and 6; 82B.09, subdivision 1; 83.23,
subdivisions 2, 3, and 4; 83.25, subdivisions 1 and 2; 83.26,
subdivision 2; 83.30, subdivision 2; 83.31, subdivision 2;
83.38, subdivision 2; 85.052; 85.053; 85.055; 88.79, subdivision
2; 89.035; 89.21; 115.073; 115.77, subdivisions 1 and 2; 116.41,
subdivision 2; 116C.69; 116C.712; 116J.9673; 125.08; 136C.04,
subdivision 9; 155A.045; 155A.16; 168.27, subdivision 11;
168.33, subdivisions 3 and 7; 168.54; 168.67; 168.705; 168A.152;
168A.29; 169.345; 171.06, subdivision 2a; 171.29, subdivision 2;
176.102; 176.1351; 176.181, subdivision 2a; 177.30; 181A.12;
183.545; 183.57; 184.28; 184.29; 184A.09; 201.091, subdivision
5; 204B.11; 207A.02; 214.06; 216C.261; 221.0355; 239.101;
240.06; 240.07; 240.08; 240.09; 240.10; 246.51; 270.69,
subdivision 2; 270A.07; 272.484; 296.06; 296.12; 296.17;
297.04 297F.03; 297.33; 299C.46; 299C.62; 299K.09; 299K.095;
299L.07; 299M.04; 300.49; 318.02; 323.44, subdivision 3;
325D.415; 326.22; 326.3331; 326.47; 326.50; 326.92, subdivisions
1 and 3; 327.33; 331A.02; 332.15, subdivisions 2 and 3; 332.17;
332.22, subdivision 1; 332.33, subdivisions 3 and 4; 332.54,
subdivision 7; 333.055; 333.20; 333.23; 336.9-413; 336A.04;
336A.05; 336A.09; 345.35; 345.43, subdivision 2a; 345.44;
345.55, subdivision 3; 347.33; 349.151; 349.161; 349.162;
349.163; 349.164; 349.165; 349.166; 349.167; 357.08; 359.01,
subdivision 3; 360.018; 360.63; 386.68; and 414.01, subdivision
11; Minnesota Statutes 1994, chapters 154; 216B; 237; 302A; 303;
308A; 317A; 322A; and 322B; Laws 1990, chapter 593; Laws 1993,
chapter 254, section 7; and Laws 1994, chapter 573, section 4;
Minnesota Rules, parts 1800.0500; 1950.1070; 2100.9300;
7515.0210; and 9545.2000 to 9545.2040.
Sec. 4. Minnesota Statutes 1996, section 116P.13,
subdivision 1, is amended to read:
Subdivision 1. [REVENUE SOURCES.] The money in the
Minnesota future resources fund consists of revenue credited
under section 297.13 297F.10, subdivision 1, paragraph (b),
clause (1).
Sec. 5. Minnesota Statutes 1996, section 325D.32,
subdivision 4, is amended to read:
Subd. 4. "Wholesaler" means and includes any person who
acquires cigarettes for the purpose of sale to retailers or to
other persons for resale, and who maintains an established place
of business when any part of the business is the sale of
cigarettes at wholesale to persons licensed to sell cigarettes
by the state or any municipality, and where at all times a stock
of cigarettes is available to retailers for resale, or any
cigarette manufacturer or manufacturer's representative who
sells to retailers or to other persons for resale, and any
person defined as a "distributor" under section 297.01 297F.01,
subdivision 7 6. The term "wholesaler" shall also include a
"subjobber" as defined by section 297.01 297F.01, subdivision 14
19. This subdivision does not prohibit any person from engaging
in business as a retailer as defined in subdivision 5.
Sec. 6. Minnesota Statutes 1996, section 325D.415, is
amended to read:
325D.415 [CIGARETTE DISTRIBUTOR FEES.]
A cigarette distributor as defined in section 297.01
297F.01, subdivision 7 6, shall pay to the commissioner an
annual fee as follows:
(1) a fee of $2,500 is due from those distributors whose
annual cigarette tax collections exceed $2,000,000; and
(2) a fee of $1,200 is due from those distributors whose
annual cigarette tax collections are $2,000,000 or less.
The annual fee must be paid by December 31 of each year.
If the fee is not paid when due, the commissioner shall revoke
or refuse to issue or renew the license under chapter 297. The
annual fee must be deposited into the general fund.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 to 6 are effective August 1, 1997.
Presented to the governor May 5, 1997
Signed by the governor May 6, 1997, 2:47 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes