Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1997, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 179-S.F.No. 378
An act relating to taxation; recodifying taxes on
liquor; providing civil and criminal penalties;
appropriating money; amending Minnesota Statutes 1996,
sections 16A.26; 340A.301, subdivision 8; 340A.302,
subdivision 1; 340A.414, subdivision 7; 340A.417; and
340A.7035; proposing coding for new law as Minnesota
Statutes, chapter 297G; repealing Minnesota Statutes
1996, sections 297C.01; 297C.02; 297C.03; 297C.04;
297C.045; 297C.05; 297C.06; 297C.07; 297C.08; 297C.09;
297C.10; 297C.11; 297C.12; 297C.13; 297C.14; 297C.16;
and 297C.17.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
RECODIFICATION
Section 1. [297G.01] [DEFINITIONS.]
Subdivision 1. [TERMS.] For purposes of this chapter, the
following terms have the meaning given them unless the language
or context clearly indicates that a different meaning is
intended.
Subd. 2. [ALCOHOLIC BEVERAGE.] "Alcoholic beverage" is any
beverage containing more than one-half of one percent alcohol by
volume.
Subd. 3. [BREWER.] "Brewer" is a person who manufactures
malt liquor for sale.
Subd. 4. [COLLECTOR.] "Collector" is a person who collects
commemorative bottles for their use and enjoyment as collector's
items and not for the consumption of the beverage contained in
them. The term does not include licensed wholesalers or
retailers of alcoholic beverages.
Subd. 5. [COMMEMORATIVE BOTTLES.] "Commemorative bottles"
are ceramic commemorative bottles or other specially designed
decanters which have value as collector's items and which
contain an alcoholic beverage.
Subd. 6. [COMMISSIONER.] "Commissioner" is the
commissioner of revenue.
Subd. 7. [DISTILLED SPIRITS.] "Distilled spirits" is
intoxicating liquors, including ethyl alcohol, hydrated oxide of
ethyl, spirits of wine, whiskey, rum, brandy, gin, and other
distilled spirits, including all dilutions and mixtures, for
nonindustrial use.
Subd. 8. [FERMENTED MALT BEVERAGES.] "Fermented malt
beverages" is any beer, ale, or other beverage made from malt by
fermentation and containing not less than one-half of one
percent alcohol by volume.
Subd. 9. [INTERNAL REVENUE CODE.] Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through December 31, 1996.
Subd. 10. [INTOXICATING LIQUOR.] "Intoxicating liquor" is
ethyl alcohol, distilled spirits, fermented, spirituous, vinous,
and fermented malt beverages containing more than 3.2 percent of
alcohol by weight.
Subd. 11. [LIQUEUR-FILLED CANDY.] "Liqueur-filled candy"
is any confectionery containing more than one-half of one
percent alcohol by volume in liquid form that is intended for or
capable of beverage use.
Subd. 12. [LIQUOR ACT.] For purposes of this chapter, the
terms defined in section 340A.101, have the meanings given them
in that section except as provided in this section.
Subd. 13. [MANUFACTURER.] "Manufacturer" is a person who,
by a process of manufacturing, fermenting, brewing, distilling,
refining, rectifying, blending, or by the combination of
different materials, prepares or produces intoxicating liquor
for sale.
Subd. 14. [MINIATURES.] "Miniatures" are containers of
distilled spirits of two fluid ounces or less or 50 milliliters
or less.
Subd. 15. [PERSON.] "Person" means an individual or any
entity engaged in the sale of distilled spirits, wine, or
fermented malt beverages.
Subd. 16. [RETAILER.] "Retailer" means a person engaged in
this state in the business of selling, or offering to sell,
distilled spirits, wine, or fermented malt beverages.
Subd. 17. [TABLE OR SPARKLING WINE.] "Table or sparkling
wine" is a beverage made without rectification or fortification
and containing not more than 25 percent alcohol by volume and
made by the fermentation of grapes, grape juice, other fruits,
or honey.
Subd. 18. [3.2 PERCENT MALT LIQUOR.] "3.2 percent malt
liquor" is a fermented malt beverage containing not less than
one-half of one percent alcohol by volume nor more than 3.2
percent alcohol by weight.
Subd. 19. [WHOLESALER.] "Wholesaler" is a person who sells
alcoholic beverages to persons to whom sale is permitted under
section 340A.310, from a stock maintained in a warehouse in the
state.
Subd. 20. [WINE.] "Wine" is the product made from the
normal alcoholic fermentation of grapes, including still wine,
sparkling and carbonated wine, wine made from condensed grape
must, wine made from other agricultural products than sound ripe
grapes, imitation wine, compounds sold as wine, vermouth, cider,
perry, and sake, in each instance containing not less than
one-half of one percent nor more than 24 percent alcohol by
volume for nonindustrial use. Wine does not include distilled
spirits as defined in subdivision 7.
Sec. 2. [297G.02] [ADMINISTRATION.]
Subdivision 1. [ENFORCEMENT RESPONSIBILITY.] The
commissioners of public safety and revenue shall enforce and
administer the provisions of this chapter.
Subd. 2. [NONAPPLICABILITY.] This chapter does not apply
to:
(1) medicines intended for therapeutic purposes and not
intended as a beverage;
(2) industrial alcohol designed for mechanical, chemical,
scientific, pharmaceutical, or industrial purposes; or
(3) nonpotable compounds or preparations containing alcohol.
Subd. 3. [POWERS OF COMMISSIONER OF REVENUE.] 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. 4. [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. [297G.03] [DISTILLED SPIRITS AND WINE; RATE OF
TAX.]
Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.]
The following excise tax is imposed on all distilled spirits and
wine manufactured, imported, sold, or possessed in this state:
Standard Metric
(a) Distilled spirits, $5.03 per gallon $1.33 per liter
liqueurs, cordials,
and specialties regardless
of alcohol content
(excluding ethyl alcohol)
(b) Wine containing $ .30 per gallon $ .08 per liter
14 percent or less
alcohol by volume
(c) Wine containing $ .95 per gallon $ .25 per liter
more than 14 percent
but not more than 21
percent alcohol by volume
(d) Wine containing more $1.82 per gallon $ .48 per liter
than 21 percent but not
more than 24 percent
alcohol by volume
(e) Wine containing more $3.52 per gallon $ .93 per liter
than 24 percent alcohol
by volume
(f) Natural and $1.82 per gallon $ .48 per liter
artificial sparkling wines
containing alcohol
In computing the tax on a package of distilled spirits or
wine, a proportional tax at a like rate on all fractional parts
of a gallon or liter must be paid, except that the tax on a
fractional part of a gallon less than 1/16 of a gallon is the
same as for 1/16 of a gallon.
Subd. 2. [TAX ON MINIATURES; DISTILLED SPIRITS.] The tax
on miniatures is 14 cents per bottle.
Subd. 3. [TAX IS METRIC.] The metric tax is imposed on all
products taxable under this section when the net contents are
stated in metric units of measure. The commissioner may
establish by rule a date and procedure for the conversion of
excise tax computation and reporting from rates expressed in
gallons to rates expressed in metric volumes. The official
conversion factor is one liter equals 0.264172 United States
gallons.
Subd. 4. [BOTTLE TAX.] A tax of one cent is imposed on
each bottle or container of distilled spirits and wine except as
provided in 297G.07, subdivision 3. The wholesaler is
responsible for the payment of this tax when the bottles of
distilled spirits and wine are removed from inventory for sale,
delivery, or shipment.
Sec. 4. [297G.04] [FERMENTED MALT BEVERAGES; RATE OF TAX.]
Subdivision 1. [TAX IMPOSED.] The following excise tax is
imposed on all fermented malt beverages that are imported,
directly or indirectly sold, or possessed in this state:
(1) on fermented malt beverages containing not more than
3.2 percent alcohol by weight, $2.40 per 31-gallon barrel;
(2) on fermented malt beverages containing more than 3.2
percent alcohol by weight, $4.60 per 31-gallon barrel.
For fractions of a 31-gallon barrel, the tax rate is
calculated proportionally.
Subd. 2. [TAX CREDIT.] A qualified brewer producing
fermented malt beverages is entitled to a tax credit of $4.60
per barrel on 25,000 barrels sold in any fiscal year beginning
July 1, regardless of the alcohol content of the product.
Qualified brewers may take the credit on the 18th day of each
month, but the total credit allowed may not exceed in any fiscal
year the lesser of:
(1) the liability for tax; or
(2) $115,000.
For purposes of this subdivision, a "qualified brewer"
means a brewer, whether or not located in this state,
manufacturing less than 100,000 barrels of fermented malt
beverages in the calendar year immediately preceding the
calendar year for which the credit under this subdivision is
claimed. In determining the number of barrels, all brands or
labels of a brewer must be combined. All facilities for the
manufacture of fermented malt beverages owned or controlled by
the same person, corporation, or other entity must be treated as
a single brewer.
Sec. 5. [297G.05] [USE TAX; RATE OF TAX.]
Subdivision 1. [WINE AND DISTILLED SPIRITS.] A tax is
imposed on the use or storage by consumers of wine and distilled
spirits in this state, and on such consumers, at the rates
specified in section 297G.03, subdivision 1.
Subd. 2. [FERMENTED MALT BEVERAGES.] A tax is imposed on
the use or storage by consumers of fermented malt beverages in
this state, and on such consumers, at the rates specified in
section 297G.04, subdivision 1.
Subd. 3. [TAX PROVISIONS APPLICABLE TO CONSUMERS.] All of
the provisions of this chapter relating to the correction of
returns, deficiency assessments, protests, hearings, interest
and penalties, and collection of taxes, apply to consumers.
Sec. 6. [297G.06] [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.
Sec. 7. [297G.07] [EXEMPTIONS FROM TAX.]
Subdivision 1. [EXEMPTIONS.] The following are not subject
to the excise tax:
(1) Sales by a manufacturer, brewer, or wholesaler for
shipment outside the state in interstate commerce.
(2) Alcoholic beverages sold or transferred between
Minnesota wholesalers.
(3) Sales to common carriers engaged in interstate
transportation of passengers, except as provided in this chapter.
(4) Malt beverages served by a brewery for on-premise
consumption at no charge, or distributed to brewery employees
for on-premise consumption under a labor contract.
(5) Shipments of wine to Minnesota residents under section
340A.417.
(6) Fruit juices naturally fermented or beer naturally
brewed in the home for family use.
(7) Sales of wine for sacramental purposes under section
340A.316.
(8) Alcoholic beverages sold to authorized manufacturers of
food products or pharmaceutical firms. The alcoholic beverage
must be used exclusively in the manufacture of food products or
medicines. For purposes of this clause, "manufacturer" means a
person who manufactures food products intended for sale to
wholesalers or retailers for ultimate sale to the consumer.
(9) Liqueur-filled candy.
(10) Sales to a federal agency, that the state of Minnesota
is prohibited from taxing under the constitution or laws of the
United States or under the constitution of Minnesota.
(11) Sales to Indian tribes as defined in section 297G.08.
Subd. 2. [IMPORTATION BY INDIVIDUALS.] (a) A person, other
than a person under the age of 21 years, entering Minnesota from
another state may have in possession one liter of intoxicating
liquor or 288 ounces of fermented malt beverages without the
required payment of the Minnesota excise tax, provided the
alcoholic beverages accompany the person into this state and
will not be offered for sale or used for any commercial purposes.
(b) A person, other than a person under the age of 21
years, entering Minnesota from a foreign country may have in
possession four liters of intoxicating liquor or ten quarts (320
ounces) of fermented malt beverages without the required payment
of the Minnesota excise tax, provided the alcoholic beverages
accompany the person into this state and will not be offered for
sale or used for any commercial purposes.
(c) A collector of commemorative bottles, other than a
person under the age of 21 years, entering Minnesota from
another state may have in possession 12 or fewer commemorative
bottles without the required payment of the Minnesota excise tax.
(d) This subdivision does not apply to consignments of
alcoholic beverages shipped into this state by holders of
Minnesota import licenses or Minnesota manufacturers and
wholesalers when licensed by the commissioner of public safety
or to common carriers with licenses to sell intoxicating liquor
in more than one state.
Subd. 3. [EXEMPTIONS FROM BOTTLE TAX.] The following are
exempt from the bottle tax:
(1) miniatures of distilled spirits and wines;
(2) containers of fermented malt beverage;
(3) containers of intoxicating liquor or wine holding less
than 200 milliliters;
(4) containers of alcoholic beverages sold and shipped to
dealers, wineries, or distillers in other states;
(5) containers of alcoholic beverages sold to other
Minnesota wholesalers;
(6) containers of alcoholic beverages sold to common
carriers engaged in interstate commerce;
(7) containers of wine intended exclusively for sacramental
purposes;
(8) containers of alcoholic beverages sold to authorized
food processors or pharmaceutical firms for use exclusively in
the manufacturing of food products or medicines; and
(9) sales to a federal agency, that the state of Minnesota
is prohibited from taxing under the constitution or laws of the
United States or under the constitution of Minnesota.
Sec. 8. [297G.08] [SALES TO INDIAN TRIBES.]
Subdivision 1. [WHOLESALERS.] A wholesaler may set aside
the part of the wholesaler's stock necessary to make sales to
the established governing body of an Indian tribe recognized by
the United States Department of the Interior, without paying the
tax required by this chapter. The amount of untaxed stock that
wholesalers may deliver to an Indian reservation is limited to
amounts necessary to meet the personal consumption needs of
qualified purchasers. When shipping or delivering 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 a wholesaler fails to comply with
the requirements of this section, the commissioner shall revoke
the permission granted to the wholesaler to keep a stock of
untaxed goods.
Subd. 2. [RETAILERS.] Retailers who are Indian tribal
organizations may keep untaxed stock intended for sale to
qualified purchasers.
Subd. 3. [QUALIFIED PURCHASERS.] A qualified purchaser of
untaxed liquor means only an enrolled member of the Indian tribe
that is offering the liquor for sale.
Subd. 4. [SALES TO NONQUALIFIED BUYERS.] A retailer who
sells or otherwise disposes of untaxed liquor other than to a
qualified purchaser shall collect from the buyer or transferee
the tax imposed by this chapter and remit the tax to the
department of revenue at the same time and manner as required by
this chapter. 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 liquor destined to be delivered to the retailer. The
procedures outlined in section 297G.20 apply to the seized
liquor. The proceeds of the sale of the liquor 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
untaxed liquor from personal liability for the tax.
Sec. 9. [297G.09] [RETURNS; PAYMENT OF TAX.]
Subdivision 1. [MONTHLY RETURNS; MANUFACTURERS,
WHOLESALERS, BREWERS, OR IMPORTERS.] On or before the 18th day
of each calendar month following the month in which a licensed
manufacturer or wholesaler first sells wine and distilled
spirits within the state, or a brewer or importer first sells or
imports fermented malt beverages, or a wholesaler knowingly
acquires title to or possession of untaxed fermented malt
beverages, the licensed manufacturer, wholesaler, brewer, or
importer liable for the excise tax must file a return with the
commissioner, and in addition must keep records and render
reports as required by the commissioner. Returns must be made
in a form and manner prescribed by the commissioner, and must
contain any other information required by the commissioner.
Returns must be accompanied by a remittance for the full unpaid
tax liability. Returns must be filed regardless of whether a
tax is due.
Subd. 2. [MONTHLY USE TAX RETURNS; CONSUMERS.] On or
before the 18th day of each calendar month, a consumer who has
acquired title to or possession of wine, distilled spirits, or
fermented malt beverages for use or storage in this state, upon
which wine, distilled spirits, or fermented malt beverages the
tax imposed by this chapter has not been paid, shall file a
return with the commissioner in the month following the month in
which the consumer obtains title to or possession of the wine,
distilled spirits, or fermented malt beverages. Returns must be
made in a form and manner prescribed by the commissioner and
must contain any other information required by the commissioner.
Returns must be accompanied by a remittance for the full unpaid
tax liability.
Subd. 3. [COMMON CARRIER RETURNS.] A common carrier
engaged in interstate transportation of passengers must file
monthly reports together with the tax payment on the sale of
alcoholic beverages sold in Minnesota. The report and payment
must be filed by the 18th day of the month following the month
in which the sale took place. A common carrier is permitted to
use a formula for the allocation of the total sales of alcoholic
beverages among states on the basis of passenger miles in each
state or some other method of allocation if written approval is
received from the commissioner.
Subd. 4. [EXTENSIONS.] When in the commissioner's
judgment, good cause exists, the commissioner may extend the
time for filing liquor tax returns for not more than six
months. The commissioner may require the taxpayer to file a
tentative return when the regularly required return is due, and
pay a tax on the basis of the tentative return at the times
required for the payment of taxes on the basis of the regularly
required return.
Subd. 5. [ACCELERATED TAX PAYMENT; PENALTY.] A person
liable for tax under this chapter 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
taxpayer 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 taxpayer 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 liability.
Subd. 6. [ELECTRONIC FUNDS TRANSFER.] A licensed brewer,
importer, or wholesaler having an excise tax liability of
$120,000 or more during a fiscal year ending June 30 must remit
all excise tax liabilities in the subsequent calendar year by
means of a funds 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 excise tax
is due. If the date the excise 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 business day next following the date the
excise tax is due.
Subd. 7. [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. 8. [INTEREST.] The amount of tax not timely paid,
together with any penalty imposed by this chapter, bears
interest at the rate specified in section 270.75 from the time
the 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. [297G.10] [DEPOSIT OF PROCEEDS.]
All tax revenues and other receipts payable to the state
under this chapter must be paid into the state treasury and
credited to the general fund.
Sec. 11. [297G.11] [INFORMATIONAL REPORTS.]
The following persons shall file with the commissioner a
monthly informational report in the form and manner prescribed
by the commissioner:
(1) a manufacturer, wholesaler, and importer licensed to
ship distilled spirits or wine into Minnesota;
(2) a person who manufactures distilled spirits or wine in
Minnesota;
(3) any other person who imports distilled spirits or wine
into Minnesota;
(4) a person who possesses, receives, stores, or warehouses
distilled spirits or wine in Minnesota, upon which the tax
imposed by this chapter has not been paid; and
(5) a person who possesses, receives, stores, or warehouses
distilled spirits or wine in Minnesota, which are required to
give bond as required by the Internal Revenue Code, subtitle E,
chapter 51.
No payment of any tax is required to be remitted with this
report. 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 distilled spirits or wine into or
within Minnesota during the previous month, unless the
commissioner determines that a longer filing period is
appropriate for a particular person. A person failing to file
this report is subject to the civil or criminal penalties
imposed by this chapter.
This section does not apply to the lawful importation of
wine and distilled spirits under section 297G.07, subdivision 2,
nor to any lawful manufacture of wine or distilled spirits
within the state for personal consumption.
Sec. 12. [297G.12] [REFUNDS.]
Subdivision 1. [OVERPAYMENT OF TAX.] An overpayment of the
tax imposed under this chapter may be refunded to the taxpayer,
provided that the claim for refund is filed within the time
prescribed under section 297G.16.
Subd. 2. [PRODUCTS DESTROYED.] The commissioner may refund
to a taxpayer the amount of tax paid under this chapter on
intoxicating liquor or fermented malt beverages which become
unfit for human consumption and are destroyed under an order by
a federal, state, or local agency while being held for sale by a
licensed retailer. The destruction must meet the requirements
of the environmental laws of this state.
Subd. 3. [WHOLESALER REFUND FOR BREAKAGE OF
INVENTORY.] The commissioner may refund to a wholesaler the
amount of tax paid under this chapter for the breakage of
inventory not subject to reimbursement from any insurance
proceeds. The commissioner may prescribe the method of proof
for obtaining the refund.
Subd. 4. [RETAILER REFUND FOR BREAKAGE OF INVENTORY.]
Refunds for breakage of inventory may be made to retailers only
if satisfactory proof is presented to the commissioner by the
wholesaler and the licensed retailer that the retailer was not
indemnified by insurance for the tax. The commissioner may
prescribe the method of proof required for obtaining the refund.
Subd. 5. [BAD DEBTS.] The commissioner may adopt rules
providing a refund of the tax paid under this chapter on
intoxicating liquor or wine if the tax paid qualifies as a bad
debt under section 166(a) of the Internal Revenue Code.
Subd. 6. [CREDIT AGAINST TAX.] The commissioner may credit
the amount determined under this section against taxes otherwise
payable under this chapter by the taxpayer.
Subd. 7. [SOURCE OF REFUND.] There is appropriated
annually from the general fund to the commissioner the sums
necessary to make the refunds provided by this section.
Sec. 13. [297G.13] [INSPECTION RIGHTS.]
The commissioner of public safety or the commissioner of
revenue, or their duly authorized employees, may, at any
reasonable time, without notice and without a search warrant,
enter in and upon a licensed premises, and examine the books,
papers, and records of a brewer, manufacturer, wholesaler, or
retailer for the purpose of determining whether the excise tax
has been paid, and may in addition inspect any premises where
fermented malt beverages are manufactured, sold, offered for
sale, possessed, or stored for the purpose of determining
whether the party is in full compliance with the provisions of
this chapter.
Sec. 14. [297G.14] [EXAMINATIONS AND AUDITS.]
Subdivision 1. [EXAMINATION OF THE TAXPAYER.] To determine
the accuracy of a return or report, or for the purpose of
collection, or in fixing liability or verifying information
regarding 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 OF OTHER PERSONS IN CONNECTION
WITH THE EXAMINATION OF TAXPAYER.] When conducting an
investigation or an audit of a taxpayer, or for the purpose of
collection, or in fixing liability or verifying information
regarding any tax under this chapter, the commissioner may
examine, except where privileged by law, the relevant records
and files of a 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 a 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
4 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 in 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 concerning
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, if 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 manufacturer, wholesaler, or retailer to furnish a
physical inventory of all wine and distilled spirits in stock.
The inventory must contain the information that the commissioner
requests and must be certified by an officer of the corporation.
Sec. 15. [297G.15] [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. The commissioner may use statistical
or other sampling techniques consistent with generally accepted
auditing standards in examining returns or records and making
assessments.
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.
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) The taxes are considered assessed 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
notice, and such records must be preserved by the commissioner.
(c) No collection action can be taken, including the filing
of liens under section 270.69, and no late payment penalty under
this chapter is imposed when a return has been filed for the
taxable period upon which the order is based, if the amount
shown on the order is paid to the commissioner:
(1) within 60 days after the order has 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. 16. [297G.16] [STATUTES OF LIMITATIONS.]
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.
Subd. 2. [DATE OF FILING.] For the purposes of this
section, a return filed before the last day prescribed by law
for 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 IN EXCESS OF 25 PERCENT.] If a person
required to file a return omits from the return an amount
properly includable in it that is in excess of 25 percent of the
amount of tax reported in the return, the tax may be assessed,
or a proceeding in court for the collection of the 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 two years from the time the tax is paid in full, whichever
period expires later. Claimants under this section are subject
to the notice requirements of section 289A.38, subdivision 7.
Subd. 6. [TIME LIMIT FOR A DESTRUCTION ORDER REFUND.]
Claims for refund under section 297G.12, subdivision 2, must be
filed with the commissioner within one year from the date of the
breakage or destruction order.
Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for
refund must be filed with the commissioner within one year of
the filing of the taxpayer's income tax return containing the
bad debt deduction that is being claimed.
Subd. 8. [CONSENT TO EXTEND TIME.] If, before the
expiration of the time prescribed in this chapter 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
before 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. 9. [BANKRUPTCY; SUSPENSION OF TIME.] The running of
the period during which a tax must be assessed or collection
proceedings commenced is suspended during the period from the
date of a filing of a petition in bankruptcy until 30 days after
either notice to the commissioner that the bankruptcy
proceedings have been closed or dismissed, or the automatic stay
has been terminated or has expired, whichever occurs first.
The suspension of the statute of limitations under this
section applies to the person the petition in bankruptcy is
filed against and other persons who may also be wholly or
partially liable for the tax.
Sec. 17. [297G.17] [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 OR CREDITS.] In the case of an
erroneous refund or credit, interest begins to accrue from the
date the refund or credit was paid unless the erroneous refund
or credit 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 297G.18, 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.
Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid
on an overpayment refunded or credited to the taxpayer from the
date of payment of the tax until the date the refund is paid or
credited.
Sec. 18. [297G.18] [CIVIL PENALTIES.]
Subdivision 1. [GENERAL RULE.] The commissioner may
recover the amount of any tax due under this chapter, as well as
any interest and penalty in a civil action. The collection of a
tax, interest, or penalty does not bar 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 any extension, a penalty of five percent
of the amount of tax not timely paid is added to the tax. If no
tax is due, a penalty of $25 is assessed for each unfiled return.
Subd. 4. [COMBINED PENALTIES.] When penalties are imposed
under subdivisions 2 and 3, the penalties 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 an 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 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 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. [REVOCATION OR SUSPENSION OF LICENSE.] The
commissioner may certify to the commissioner of public safety
any failure to pay taxes when due as a violation of the statute
relating to the sale of intoxicating liquor for possible
revocation or suspension of license.
Subd. 9. [FAILURE TO FILE INFORMATIONAL RETURNS.] A person
required to file informational returns or reports that fails to
do so as required by this chapter is assessed a $25 penalty for
each month the return remains unfiled.
Subd. 10. [PAYMENT OF PENALTIES.] The penalties imposed by
this section are collected and paid in the same manner as taxes.
Subd. 11. [PENALTIES ARE ADDITIONAL.] The civil penalties
imposed by this section are in addition to the criminal
penalties imposed by this chapter.
Sec. 19. [297G.19] [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. [IMPORTATION FROM ANOTHER STATE.] (a) A person
entering Minnesota from another state who imports or possesses
more than one liter, but fewer than 25 liters of untaxed
intoxicating liquor, or more than 288 ounces (nine quarts), but
fewer than 6,800 ounces (225 quarts) of untaxed fermented malt
beverages is guilty of a misdemeanor.
(b) A person entering Minnesota from another state who
imports or possesses 25 liters or more, but fewer than 225
liters of untaxed intoxicating liquor, or 6,800 ounces (225
quarts) or more, but fewer than 34,000 ounces (1,225 quarts) of
untaxed fermented malt beverages is guilty of a gross
misdemeanor.
(c) A person entering Minnesota from another state who
imports or possesses 225 liters or more of untaxed intoxicating
liquor, or 34,000 ounces (1,225 quarts) or more of untaxed
fermented malt beverages is guilty of a felony.
Subd. 5. [IMPORTATION FROM A FOREIGN COUNTRY.] (a) A
person entering Minnesota from a foreign country who imports or
possesses more than four liters, but fewer than 100 liters of
untaxed intoxicating liquor, or more than 320 ounces (ten
quarts), but fewer than 8,000 ounces (250 quarts) of untaxed
fermented malt beverages is guilty of a misdemeanor.
(b) A person entering Minnesota from a foreign country who
imports or possesses 100 liters or more, but fewer than 500
liters of untaxed intoxicating liquor, or 8,000 ounces (250
quarts) or more, but fewer than 40,000 ounces (1,250 quarts) of
untaxed fermented malt beverages is guilty of a gross
misdemeanor.
(c) A person entering Minnesota from a foreign country who
imports or possesses 500 liters or more of untaxed intoxicating
liquor, or 40,000 ounces (1,250 quarts) or more of untaxed
fermented malt beverages is guilty of a felony.
Subd. 6. [PENALTIES ARE ADDITIONAL.] Criminal penalties
imposed by this section are in addition to any civil penalties
imposed by this chapter.
Subd. 7. [OTHER PENALTIES.] Any violation of this chapter
unless otherwise specified is a misdemeanor.
Subd. 8. [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.
Sec. 20. [297G.20] [CONTRABAND.]
Subdivision 1. [CONTRABAND DEFINED.] The following are
declared to be contraband and therefore subject to civil and
criminal penalties and seizure under this chapter:
(1) All distilled spirits, wine, and fermented malt
beverages possessed or held with intent to sell without payment
of an excise tax.
(2) All distilled spirits, wine, and fermented malt
beverages sold without payment of an excise tax.
(3) All distilled spirits, wine, and fermented malt
beverages transported without payment of an excise tax.
(4) Devices 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
distilled spirits, wine, and fermented malt beverages which are
contraband under this subdivision.
Subd. 2. [EXCEPTION.] When distilled spirits, wine, and
fermented malt beverages are being transported in the course of
interstate commerce, or are in movement from either a public
warehouse to a wholesaler upon orders from a manufacturer or
wholesaler, or from one wholesaler to another, the distilled
spirits, wine, and fermented malt beverages are not contraband,
notwithstanding the provisions of subdivision 1.
Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented
malt beverages, or other property made contraband by subdivision
1 may be seized by the commissioner of revenue or public safety
and their authorized agents or by any sheriff or other police
officer, with or without process, and are subject to forfeiture
as provided in subdivisions 4 and 5.
Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL;
DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the
seizure of alleged contraband, the person making the seizure
shall make available an inventory of the property seized to the
person from whom the property was seized, if known, and file
a copy with both the commissioners of revenue and public safety.
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 seizing authority
a demand for judicial determination of whether the property was
lawfully subject to seizure and forfeiture. Within 60 days
after the date of the filing of the demand, the seizing
authority must bring an action in the district court of the
county where 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
determine the issues of fact and law involved.
(c) If a judgment of forfeiture is entered, the seizing
authority may, unless the judgment is stayed pending an appeal,
either:
(1) cause the forfeited property to be destroyed; or
(2) cause it to be sold at a public auction as provided by
law.
(d) If demand for judicial determination is made and no
action is commenced by the seizing authority as provided in this
subdivision, the property must be released by the seizing
authority and delivered to the person entitled to it. If no
demand is made, the property seized is considered forfeited to
the seizing authority by operation of law and may be disposed of
by the seizing authority as provided for a judgment of
forfeiture. When the seizing authority 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
seizing authority shall release the property seized without
further legal proceedings.
Subd. 5. [DISPOSAL.] (a) The property described in
subdivision 1, clause (4), must be confiscated after conviction
of the person from whom it was seized, upon compliance with the
following procedure: the seizing authority shall file with the
court a separate complaint against the property, describing it
and charging its use in the specific 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 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, 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 time, the property will be
ordered sold by the seizing authority.
(c) The court shall cause the order to be served upon 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 upon
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
must not be less than ten nor more than 30 days after the time
for filing the answer expires. If no answer is filed within the
time prescribed, upon affidavit by the court administrator,
setting forth the fact, the court shall order the property sold
by the seizing authority. 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
seizing authority 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 unlawfully used
property 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 seizing authority for official
use and sharing in the manner provided in paragraph (a). A sale
under this section frees the property from all liens on it.
Appeal from the order of the district is available 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 at least $100
and not more than double of 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 the seizure. The seizing authority may dismiss the
proceedings outlined in this subdivision when the seizing
authority considers it in the public interest to do so.
Sec. 21. [297G.21] [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 periods 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 shall
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 elect
to 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. 22. [297G.22] [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. 23. [PURPOSE.]
It is the intent of the legislature to simplify Minnesota's
liquor tax laws by consolidating and recodifying tax
administration and compliance provisions now contained
throughout Minnesota Statutes, chapter 297C. 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. 24. [REPEALER.]
Minnesota Statutes 1996, sections 297C.01; 297C.02;
297C.03; 297C.04; 297C.045; 297C.05; 297C.06; 297C.07; 297C.08;
297C.09; 297C.10; 297C.11; 297C.12; 297C.13; 297C.14; 297C.16;
and 297C.17, are repealed.
Sec. 25. [EFFECTIVE DATE.]
Sections 1 and 23 are effective the day following final
enactment. Sections 2 to 12, 18, 21, and 22 are effective for
returns, reports, taxes, or other payments first becoming due on
or after August 1, 1997. Sections 13, 20, and 24 are effective
August 1, 1997. Sections 14 and 15 are effective for audits or
investigations initiated on or after August 1, 1997. Section 16
is effective for returns becoming due on or after August 1,
1997. Section 17 is effective for interest on amounts first
becoming due to the commissioner on or after August 1, 1997.
Section 19 is effective for crimes committed on or after August
1, 1997.
ARTICLE 2
TECHNICAL CHANGES
Section 1. Minnesota Statutes 1996, section 16A.26, is
amended to read:
16A.26 [ONE DEPOSITORY ACCOUNT FOR EACH TAX.]
Notwithstanding sections 297.13, 298.17, 298.282, 298.39,
298.396, 297C.02 to 297C.08 297G.10, 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 340A.301,
subdivision 8, is amended to read:
Subd. 8. [SALES WITHOUT LICENSE.] A licensed brewer may
without an additional license sell malt liquor to employees or
retired former employees, in amounts of not more than 768 fluid
ounces in a week for off-premise consumption only. A collector
of commemorative bottles, those terms are as defined in
section 297C.01 297G.01, subdivisions 4 and 5, may sell them to
another collector without a license. It is also lawful for a
collector of beer cans to sell unopened cans of a brand which
has not been sold commercially for at least two years to another
collector without obtaining a license. The amount sold to any
one collector in any one month shall not exceed 768 fluid
ounces. A licensed manufacturer of wine containing not more than
25 percent alcohol by volume nor less than 51 percent wine made
from Minnesota-grown agricultural products may sell at on-sale
or off-sale wine made on the licensed premises without a further
license.
Sec. 3. Minnesota Statutes 1996, section 340A.302,
subdivision 1, is amended to read:
Subdivision 1. [LICENSES REQUIRED.] Except as provided in
sections 297C.09 297G.07, subdivision 2, and 340A.301,
subdivision 1, no retailer or other person may ship or cause to
be shipped alcoholic beverages or ethyl alcohol for personal use
or to a licensed manufacturer or wholesaler without obtaining an
importer's license from the commissioner.
Sec. 4. Minnesota Statutes 1996, section 340A.414,
subdivision 7, is amended to read:
Subd. 7. [INSPECTION.] An establishment holding a permit
under this section is open for inspection by the commissioner
and the commissioner's representative and by peace officers, who
may enter and inspect during reasonable hours. Intoxicating
liquor sold, served, or displayed in violation of law may be
seized and may be disposed of under section 297C.12 297G.20.
Sec. 5. Minnesota Statutes 1996, section 340A.417, is
amended to read:
340A.417 [SHIPMENTS INTO MINNESOTA.]
(a) Notwithstanding section 297C.09 297G.07, subdivision 2,
or any provision of this chapter, a winery licensed in a state
which affords Minnesota wineries an equal reciprocal shipping
privilege may ship, for personal use and not for resale, not
more than two cases of wine, containing a maximum of nine liters
per case, in any calendar year to any resident of Minnesota age
21 or over. Delivery of a shipment under this section may not
be deemed a sale in this state.
(b) The shipping container of any wine sent into or out of
Minnesota under this section must be clearly labeled to indicate
that the package cannot be delivered to a person under the age
of 21 years.
(c) No person may (1) advertise shipments authorized under
this section, or (2) by advertisement or otherwise, solicit
shipments authorized by this section. No shipper located
outside Minnesota may advertise such interstate reciprocal wine
shipments in Minnesota.
(d) It is not the intent of this section to impair the
distribution of wine through distributors or importing
distributors, but only to permit shipments of wine for personal
use.
Sec. 6. Minnesota Statutes 1996, section 340A.7035, is
amended to read:
340A.7035 [CONSUMER IMPORTATION; ILLEGAL ACTS.]
A person who enters Minnesota from another state and who
imports or possesses alcoholic beverages in excess of the
tax-exempt quantities provided for in section 297C.07,
paragraphs (10), (11), and (12), 297G.07, subdivision 2,
paragraphs (a), (b), and (c), is guilty of a misdemeanor. A
person who enters Minnesota from a foreign country who imports
or possesses alcoholic beverages on which the excise tax imposed
by sections 297C.02 and 297C.09 chapter 297G has not been paid,
other than the tax-exempt quantities provided for in
section 297C.07, paragraphs (10), (11), and (12), 297G.07,
subdivision 2, paragraphs (a), (b), and (c), is guilty of a
misdemeanor. A peace officer, the commissioner of public
safety, and employees designated by the commissioner of public
safety may seize alcoholic beverages imported or possessed in
violation of this section. This section does not apply to the
consignments of alcoholic beverages shipped into this state by
holders of Minnesota import licenses or Minnesota manufacturers
and wholesalers when licensed by the commissioner of public
safety or to common carriers with licenses to sell alcoholic
beverages in more than one state when licensed by the
commissioner of public safety to sell alcoholic beverages in
this state.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 to 6 are effective August 1, 1997.
Presented to the governor May 17, 1997
Signed by the governor May 19, 1997, 7:22 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes