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S.F. No. 791 - Tobacco Products Tax Modifications
 
Author: Senator Lyle Koenen
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: February 28, 2013



 

Section 1.  [Definition of “little cigar”]  Defines a “little cigar” as a roll made for smoking made in whole or in part of tobacco if the product:

  • is wrapped in a substance containing tobacco other than natural leaf tobacco;
  • uses an integrated cellulose acetate or other similar filter; and
  • weighs not more than 4.5 pounds per thousand.

Section 2.  [Definition of “moist snuff”]  Defines “moist snuff” as finely cut, ground, or powdered tobacco that is not intended to be smoked, but does not include finely cut, ground, or powdered tobacco that is intended to be placed in the nasal cavity. 

Section 3.  [Definition of “tobacco products”]  Modifies the definition of “tobacco products” to include moist snuff.

Sections 4 and 5.  [Rates and use tax; tobacco products]  Maintains the distributor and use tax rate of 35 percent of the wholesales sales price for tobacco products, excluding moist snuff and little cigars.  Imposes a separate per ounce tax rate for moist snuff and a proportionate rate for other quantities in excess of 1.2 ounces.  For a package of moist snuff weighing less than 1.2 ounces, the tax imposed is equal to the amount imposed on a package weighing 1.2 ounces.  The amount of tax per ounce is left blank in this bill.  Imposes a distributor and use tax on little cigars of 24 mills per little cigar (the same amount as imposed for cigarettes; equivalent to 48 cents per pack), and imposes the health impact fee for little cigars of 37.5 mills per little cigar for little cigars weighing not more than three pounds per thousand (the same amount as imposed for cigarettes; equivalent to 75 cents per pack).

Section 6.  [Monthly return; tobacco products distributor]  Adds moist snuff to the monthly reporting requirements for in-state tobacco products distributors and out-of-state distributors who ship or transport to in-state retailers.

Section 7.  [Use tax return; cigarette or tobacco products consumer]  Adds moist snuff to the monthly consumer use tax reporting requirements. 

Section 8.  [Nonsettlement fee imposed]  Increases the fee rate from 1.75 cents to 2.75 cents per cigarette on cigarettes sold by manufacturers not subject to the legal settlement resulting from tobacco litigation. 

All sections are effective July 1, 2013.

NBP:dv 

 

 
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