SF1388

Purpose

To change how Minnesota taxes cigars when they are sold for shipment outside Minnesota. The bill creates an exemption from the tobacco-related taxes for cigars that are sold by a manufacturer or a tobacco products distributor and shipped out of state.

Main provisions

• Adds a new Subdivision 6 to Minnesota Statutes 2024 section 297F.06.
• Provision language: Sales of cigars by a manufacturer or tobacco products distributor for shipment outside the state in interstate commerce are exempt from the taxes imposed under section 297F.05 subdivisions 3 and 3a.
• In effect, certain out-of-state shipments of cigars (when sold by manufacturers or distributors) are not subject to the Minnesota tobacco products tax.

Significant changes to existing law

• Establishes an explicit exemption from the tobacco products tax for cigars that are sold by a manufacturer or distributor and shipped outside Minnesota (interstate commerce).
• The exemption applies specifically to taxes under section 297F.05 subdivisions 3 and 3a, reducing or removing Minnesota tax liability for these out-of-state shipments.
• Clarifies the scope of taxation on cigars by distinguishing interstate shipments from in-state sales.

Relevant Terms - tobacco products tax on cigars - exemption - sale of cigars - manufacturer - tobacco products distributor - shipment outside the state - interstate commerce - Minnesota Statutes 2024 section 297F.06 - subdivision 6 - taxes imposed under section 297F.05 subdivisions 3 and 3a