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SF1388 (Legislative Session 94 (2025-2026))

Certain cigars exemption from the taxes imposed on tobacco products and premium cigars

Related bill: HF926

AI Generated Summary

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

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 13, 2025SenateActionIntroduction and first reading
February 13, 2025SenateActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "New Subd. 6: Tobacco products tax on cigars. Exempts interstate shipments of cigars by a manufacturer or distributor from taxes under 297F.05, subd. 3 and subd. 3a."
      ],
      "removed": [],
      "summary": "Adds a new subdivision to Minnesota Statutes 2024 section 297F.06 establishing an exemption from the tobacco products tax on cigars for sales by a manufacturer or tobacco products distributor for shipment outside the state in interstate commerce, exempt from taxes imposed under section 297F.05, subdivisions 3 and 3a.",
      "modified": [
        "Clarifies that certain cigar sales for interstate shipment are exempt from the tobacco products tax under 297F.05."
      ]
    },
    "citation": "297F.06",
    "subdivision": "Subd. 6"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References the taxes under Minnesota Statutes 297F.05, subdivisions 3 and 3a, to indicate that sales of cigars by a manufacturer or tobacco products distributor for interstate shipment outside the state are exempt from those taxes.",
      "modified": []
    },
    "citation": "297F.05",
    "subdivision": "Subd. 3 and Subd. 3a"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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