as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; recodifying taxes on liquor; 1.3 providing civil and criminal penalties; appropriating 1.4 money; amending Minnesota Statutes 1996, sections 1.5 16A.26; 340A.301, subdivision 8; 340A.302, subdivision 1.6 1; 340A.414, subdivision 7; 340A.417; and 340A.7035; 1.7 proposing coding for new law as Minnesota Statutes, 1.8 chapter 297G; repealing Minnesota Statutes 1996, 1.9 sections 297C.01; 297C.02; 297C.03; 297C.04; 297C.045; 1.10 297C.05; 297C.06; 297C.07; 297C.08; 297C.09; 297C.10; 1.11 297C.11; 297C.12; 297C.13; 297C.14; 297C.16; and 1.12 297C.17. 1.13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.14 ARTICLE 1 1.15 RECODIFICATION 1.16 Section 1. [297G.01] [DEFINITIONS.] 1.17 Subdivision 1. [TERMS.] For purposes of this chapter, the 1.18 following terms have the meaning given them unless the language 1.19 or context clearly indicates that a different meaning is 1.20 intended. 1.21 Subd. 2. [ALCOHOLIC BEVERAGE.] "Alcoholic beverage" is any 1.22 beverage containing more than one-half of one percent alcohol by 1.23 volume. 1.24 Subd. 3. [BREWER.] "Brewer" is a person who manufactures 1.25 malt liquor for sale. 1.26 Subd. 4. [COLLECTOR.] "Collector" is a person who collects 1.27 commemorative bottles for their use and enjoyment as collector's 1.28 items and not for the consumption of the beverage contained in 1.29 them. The term does not include licensed wholesalers or 2.1 retailers of alcoholic beverages. 2.2 Subd. 5. [COMMEMORATIVE BOTTLES.] "Commemorative bottles" 2.3 are ceramic commemorative bottles or other specially designed 2.4 decanters which have value as collector's items and which 2.5 contain an alcoholic beverage. 2.6 Subd. 6. [COMMISSIONER.] "Commissioner" is the 2.7 commissioner of revenue. 2.8 Subd. 7. [DISTILLED SPIRITS.] "Distilled spirits" is 2.9 intoxicating liquors, including ethyl alcohol, hydrated oxide of 2.10 ethyl, spirits of wine, whiskey, rum, brandy, gin, and other 2.11 distilled spirits, including all dilutions and mixtures, for 2.12 nonindustrial use. 2.13 Subd. 8. [FERMENTED MALT BEVERAGES.] "Fermented malt 2.14 beverages" is any beer, ale, or other beverage made from malt by 2.15 fermentation and containing not less than one-half of one 2.16 percent alcohol by volume. 2.17 Subd. 9. [INTERNAL REVENUE CODE.] Unless specifically 2.18 defined otherwise, "Internal Revenue Code" means the Internal 2.19 Revenue Code of 1986, as amended through December 31, 1996. 2.20 Subd. 10. [INTOXICATING LIQUOR.] "Intoxicating liquor" is 2.21 ethyl alcohol, distilled spirits, fermented, spirituous, vinous, 2.22 and fermented malt beverages containing more than 3.2 percent of 2.23 alcohol by weight. 2.24 Subd. 11. [LIQUEUR-FILLED CANDY.] "Liqueur-filled candy" 2.25 is any confectionery containing more than one-half of one 2.26 percent alcohol by volume in liquid form that is intended for or 2.27 capable of beverage use. 2.28 Subd. 12. [LIQUOR ACT.] For purposes of this chapter, the 2.29 terms defined in section 340A.101, have the meanings given them 2.30 in that section except as provided in this section. 2.31 Subd. 13. [MANUFACTURER.] "Manufacturer" is a person who, 2.32 by a process of manufacturing, fermenting, brewing, distilling, 2.33 refining, rectifying, blending, or by the combination of 2.34 different materials, prepares or produces intoxicating liquor 2.35 for sale. 2.36 Subd. 14. [MINIATURES.] "Miniatures" are containers of 3.1 distilled spirits of two fluid ounces or less or 50 milliliters 3.2 or less. 3.3 Subd. 15. [PERSON.] "Person" means an individual or any 3.4 entity engaged in the sale of distilled spirits, wine, or 3.5 fermented malt beverages. 3.6 Subd. 16. [RETAILER.] "Retailer" means a person engaged in 3.7 this state in the business of selling, or offering to sell, 3.8 distilled spirits, wine, or fermented malt beverages. 3.9 Subd. 17. [TABLE OR SPARKLING WINE.] "Table or sparkling 3.10 wine" is a beverage made without rectification or fortification 3.11 and containing not more than 25 percent alcohol by volume and 3.12 made by the fermentation of grapes, grape juice, other fruits, 3.13 or honey. 3.14 Subd. 18. [3.2 PERCENT MALT LIQUOR.] "3.2 percent malt 3.15 liquor" is a fermented malt beverage containing not less than 3.16 one-half of one percent alcohol by volume nor more than 3.2 3.17 percent alcohol by weight. 3.18 Subd. 19. [WHOLESALER.] "Wholesaler" is a person who sells 3.19 alcoholic beverages to persons to whom sale is permitted under 3.20 section 340A.310, from a stock maintained in a warehouse in the 3.21 state. 3.22 Subd. 20. [WINE.] "Wine" is the product made from the 3.23 normal alcoholic fermentation of grapes, including still wine, 3.24 sparkling and carbonated wine, wine made from condensed grape 3.25 must, wine made from other agricultural products than sound ripe 3.26 grapes, imitation wine, compounds sold as wine, vermouth, cider, 3.27 perry, and sake, in each instance containing not less than 3.28 one-half of one percent nor more than 24 percent alcohol by 3.29 volume for nonindustrial use. Wine does not include distilled 3.30 spirits as defined in subdivision 7. 3.31 Sec. 2. [297G.02] [ADMINISTRATION.] 3.32 Subdivision 1. [ENFORCEMENT RESPONSIBILITY.] The 3.33 commissioners of public safety and revenue shall enforce and 3.34 administer the provisions of this chapter. 3.35 Subd. 2. [NONAPPLICABILITY.] This chapter does not apply 3.36 to: 4.1 (1) medicines intended for therapeutic purposes and not 4.2 intended as a beverage; 4.3 (2) industrial alcohol designed for mechanical, chemical, 4.4 scientific, pharmaceutical, or industrial purposes; or 4.5 (3) nonpotable compounds or preparations containing alcohol. 4.6 Subd. 3. [POWERS OF COMMISSIONER OF REVENUE.] The 4.7 commissioner, or duly authorized agents, may conduct 4.8 investigations, inquiries, and hearings under this chapter and, 4.9 in connection with such investigations, inquiries, and hearings, 4.10 the commissioner and the duly authorized agents shall have all 4.11 the powers conferred upon the commissioner and the 4.12 commissioner's examiners by section 270.06, and the provisions 4.13 of that section shall apply to all such investigations, 4.14 inquiries, and hearings. 4.15 Subd. 4. [EXPENSES OF ADMINISTRATION.] Expenses for the 4.16 administration of this chapter shall be paid out of 4.17 appropriations to the commissioner for the administration of 4.18 this chapter and shall include fees and expenses incurred by the 4.19 attorney general and any county attorney in litigation in 4.20 connection with the enforcement of this chapter. Expenses also 4.21 include all court costs and expenses. 4.22 Sec. 3. [297G.03] [DISTILLED SPIRITS AND WINE; RATE OF 4.23 TAX.] 4.24 Subdivision 1. [GENERAL RATE; DISTILLED SPIRITS AND WINE.] 4.25 The following excise tax is imposed on all distilled spirits and 4.26 wine manufactured, imported, sold, or possessed in this state: 4.27 Standard Metric 4.28 (a) Distilled spirits, $5.03 per gallon $1.33 per liter 4.29 liqueurs, cordials, 4.30 and specialties regardless 4.31 of alcohol content 4.32 (excluding ethyl alcohol) 4.33 (b) Wine containing $ .30 per gallon $ .08 per liter 4.34 14 percent or less 4.35 alcohol by volume 4.36 (c) Wine containing $ .95 per gallon $ .25 per liter 5.1 more than 14 percent 5.2 but not more than 21 5.3 percent alcohol by volume 5.4 (d) Wine containing more $1.82 per gallon $ .48 per liter 5.5 than 21 percent but not 5.6 more than 24 percent 5.7 alcohol by volume 5.8 (e) Wine containing more $3.52 per gallon $ .93 per liter 5.9 than 24 percent alcohol 5.10 by volume 5.11 (f) Natural and $1.82 per gallon $ .48 per liter 5.12 artificial sparkling wines 5.13 containing alcohol 5.14 In computing the tax on a package of distilled spirits or 5.15 wine, a proportional tax at a like rate on all fractional parts 5.16 of a gallon or liter must be paid, except that the tax on a 5.17 fractional part of a gallon less than 1/16 of a gallon is the 5.18 same as for 1/16 of a gallon. 5.19 Subd. 2. [TAX ON MINIATURES; DISTILLED SPIRITS.] The tax 5.20 on miniatures is 14 cents per bottle. 5.21 Subd. 3. [TAX IS METRIC.] The metric tax is imposed on all 5.22 products taxable under this section when the net contents are 5.23 stated in metric units of measure. The commissioner may 5.24 establish by rule a date and procedure for the conversion of 5.25 excise tax computation and reporting from rates expressed in 5.26 gallons to rates expressed in metric volumes. The official 5.27 conversion factor is one liter equals 0.264172 United States 5.28 gallons. 5.29 Subd. 4. [BOTTLE TAX.] A tax of one cent is imposed on 5.30 each bottle or container of distilled spirits and wine except as 5.31 provided in 297G.07, subdivision 3. The wholesaler is 5.32 responsible for the payment of this tax when the bottles of 5.33 distilled spirits and wine are removed from inventory for sale, 5.34 delivery, or shipment. 5.35 Sec. 4. [297G.04] [FERMENTED MALT BEVERAGES; RATE OF TAX.] 5.36 Subdivision 1. [TAX IMPOSED.] The following excise tax is 6.1 imposed on all fermented malt beverages that are imported, 6.2 directly or indirectly sold, or possessed in this state: 6.3 (1) on fermented malt beverages containing not more than 6.4 3.2 percent alcohol by weight, $2.40 per 31-gallon barrel; 6.5 (2) on fermented malt beverages containing more than 3.2 6.6 percent alcohol by weight, $4.60 per 31-gallon barrel. 6.7 For fractions of a 31-gallon barrel, the tax rate is 6.8 calculated proportionally. 6.9 Subd. 2. [TAX CREDIT.] A qualified brewer producing 6.10 fermented malt beverages is entitled to a tax credit of $4.60 6.11 per barrel on 25,000 barrels sold in any fiscal year beginning 6.12 July 1, regardless of the alcohol content of the product. 6.13 Qualified brewers may take the credit on the 18th day of each 6.14 month, but the total credit allowed may not exceed in any fiscal 6.15 year the lesser of: 6.16 (1) the liability for tax; or 6.17 (2) $115,000. 6.18 For purposes of this subdivision, a "qualified brewer" 6.19 means a brewer, whether or not located in this state, 6.20 manufacturing less than 100,000 barrels of fermented malt 6.21 beverages in the calendar year immediately preceding the 6.22 calendar year for which the credit under this subdivision is 6.23 claimed. In determining the number of barrels, all brands or 6.24 labels of a brewer must be combined. All facilities for the 6.25 manufacture of fermented malt beverages owned or controlled by 6.26 the same person, corporation, or other entity must be treated as 6.27 a single brewer. 6.28 Sec. 5. [297G.05] [USE TAX; RATE OF TAX.] 6.29 Subdivision 1. [WINE AND DISTILLED SPIRITS.] A tax is 6.30 imposed on the use or storage by consumers of wine and distilled 6.31 spirits in this state, and on such consumers, at the rates 6.32 specified in section 297G.03, subdivision 1. 6.33 Subd. 2. [FERMENTED MALT BEVERAGES.] A tax is imposed on 6.34 the use or storage by consumers of fermented malt beverages in 6.35 this state, and on such consumers, at the rates specified in 6.36 section 297G.04, subdivision 1. 7.1 Subd. 3. [TAX PROVISIONS APPLICABLE TO CONSUMERS.] All of 7.2 the provisions of this chapter relating to the correction of 7.3 returns, deficiency assessments, protests, hearings, interest 7.4 and penalties, and collection of taxes, apply to consumers. 7.5 Sec. 6. [297G.06] [TAX AS PERSONAL DEBT.] 7.6 The tax imposed by this chapter, and interest and penalties 7.7 imposed with respect to it, is a personal debt of the person 7.8 required to file a return from the time the liability for it 7.9 arises, regardless of when the time for payment of the liability 7.10 occurs. In the case of the executor or administrator of the 7.11 estate of a decedent and in the case of any fiduciary, the debt 7.12 is that of the person in the person's official or fiduciary 7.13 capacity only, unless the person has voluntarily distributed the 7.14 assets held in that capacity without reserving sufficient assets 7.15 to pay the tax, interest, and penalties. In that case, the 7.16 person is personally liable for the deficiency. 7.17 Sec. 7. [297G.07] [EXEMPTIONS FROM TAX.] 7.18 Subdivision 1. [EXEMPTIONS.] The following are not subject 7.19 to the excise tax: 7.20 (1) Sales by a manufacturer, brewer, or wholesaler for 7.21 shipment outside the state in interstate commerce. 7.22 (2) Alcoholic beverages sold or transferred between 7.23 Minnesota wholesalers. 7.24 (3) Sales to common carriers engaged in interstate 7.25 transportation of passengers, except as provided in this chapter. 7.26 (4) Malt beverages served by a brewery for on-premise 7.27 consumption at no charge, or distributed to brewery employees 7.28 for on-premise consumption under a labor contract. 7.29 (5) Shipments of wine to Minnesota residents under section 7.30 340A.417. 7.31 (6) Fruit juices naturally fermented or beer naturally 7.32 brewed in the home for family use. 7.33 (7) Sales of wine for sacramental purposes under section 7.34 340A.316. 7.35 (8) Alcoholic beverages sold to authorized manufacturers of 7.36 food products or pharmaceutical firms. The alcoholic beverage 8.1 must be used exclusively in the manufacture of food products or 8.2 medicines. For purposes of this clause, "manufacturer" means a 8.3 person who manufactures food products intended for sale to 8.4 wholesalers or retailers for ultimate sale to the consumer. 8.5 (9) Liqueur-filled candy. 8.6 (10) Sales to a federal agency, that the state of Minnesota 8.7 is prohibited from taxing under the constitution or laws of the 8.8 United States or under the constitution of Minnesota. 8.9 (11) Sales to Indian tribes as defined in section 297G.08. 8.10 Subd. 2. [IMPORTATION BY INDIVIDUALS.] (a) A person, other 8.11 than a person under the age of 21 years, entering Minnesota from 8.12 another state may have in possession one liter of intoxicating 8.13 liquor or 288 ounces of fermented malt beverages without the 8.14 required payment of the Minnesota excise tax, provided the 8.15 alcoholic beverages accompany the person into this state and 8.16 will not be offered for sale or used for any commercial purposes. 8.17 (b) A person, other than a person under the age of 21 8.18 years, entering Minnesota from a foreign country may have in 8.19 possession four liters of intoxicating liquor or ten quarts (320 8.20 ounces) of fermented malt beverages without the required payment 8.21 of the Minnesota excise tax, provided the alcoholic beverages 8.22 accompany the person into this state and will not be offered for 8.23 sale or used for any commercial purposes. 8.24 (c) A collector of commemorative bottles, other than a 8.25 person under the age of 21 years, entering Minnesota from 8.26 another state may have in possession 12 or fewer commemorative 8.27 bottles without the required payment of the Minnesota excise tax. 8.28 (d) This subdivision does not apply to consignments of 8.29 alcoholic beverages shipped into this state by holders of 8.30 Minnesota import licenses or Minnesota manufacturers and 8.31 wholesalers when licensed by the commissioner of public safety 8.32 or to common carriers with licenses to sell intoxicating liquor 8.33 in more than one state. 8.34 Subd. 3. [EXEMPTIONS FROM BOTTLE TAX.] The following are 8.35 exempt from the bottle tax: 8.36 (1) miniatures of distilled spirits and wines; 9.1 (2) containers of fermented malt beverage; 9.2 (3) containers of intoxicating liquor or wine holding less 9.3 than 200 milliliters; 9.4 (4) containers of alcoholic beverages sold and shipped to 9.5 dealers, wineries, or distillers in other states; 9.6 (5) containers of alcoholic beverages sold to other 9.7 Minnesota wholesalers; 9.8 (6) containers of alcoholic beverages sold to common 9.9 carriers engaged in interstate commerce; 9.10 (7) containers of wine intended exclusively for sacramental 9.11 purposes; 9.12 (8) containers of alcoholic beverages sold to authorized 9.13 food processors or pharmaceutical firms for use exclusively in 9.14 the manufacturing of food products or medicines; and 9.15 (9) sales to a federal agency, that the state of Minnesota 9.16 is prohibited from taxing under the constitution or laws of the 9.17 United States or under the constitution of Minnesota. 9.18 Sec. 8. [297G.08] [SALES TO INDIAN TRIBES.] 9.19 Subdivision 1. [WHOLESALERS.] A wholesaler may set aside 9.20 stock necessary to make sales to a qualified Indian retailer 9.21 without paying the tax required by this chapter. 9.22 Subd. 2. [QUALIFIED INDIAN RETAILER.] A qualified Indian 9.23 retailer is the tribal government of a federally recognized 9.24 Indian tribe or any retail establishment located on a federally 9.25 recognized Indian reservation which is authorized to sell liquor 9.26 on that reservation. A qualified Indian retailer may keep 9.27 untaxed liquor in quantities reasonably necessary to meet the 9.28 estimated personal consumption needs of qualified purchasers. 9.29 Subd. 3. [QUALIFIED PURCHASERS.] A qualified purchaser of 9.30 untaxed liquor means an enrolled member of the reservation on 9.31 which the liquor is being offered for sale. 9.32 Subd. 4. [QUANTITY OF UNTAXED LIQUOR ALLOWED TO BE 9.33 DELIVERED ONTO A RESERVATION.] (a) The aggregate quantity of 9.34 untaxed liquor that can be delivered onto a reservation is 9.35 limited to an amount reasonably necessary to meet the personal 9.36 consumption needs of qualified purchasers. This amount shall be 10.1 presumed to be an amount equal to the average statewide per 10.2 capita consumption of liquor times the number of qualified 10.3 purchasers. A tribal government, qualified Indian retailer, or 10.4 wholesaler may request that greater quantities of untaxed liquor 10.5 be delivered onto the reservation by presenting evidence of 10.6 higher per capita consumption of qualified purchasers on the 10.7 reservation. The request shall be made through petition to the 10.8 commissioner. 10.9 (b) Prior to shipping any untaxed liquor to a qualified 10.10 Indian retailer, the wholesaler must notify the commissioner. 10.11 The commissioner shall promptly notify the wholesaler of the 10.12 quantity of untaxed liquor that the wholesaler may deliver to 10.13 the qualified Indian retailer. 10.14 (c) If more than one wholesaler makes a request to deliver 10.15 untaxed liquor onto a reservation, the commissioner shall 10.16 allocate the aggregate amount of liquor allowed to be delivered 10.17 to qualified Indian retailers on the reservation among the 10.18 competing wholesalers. The commissioner shall use location of 10.19 the outlets serviced by the wholesalers, the likely amount of 10.20 liquor purchased by qualified purchasers at those outlets, 10.21 product mix of the competing wholesalers, and other appropriate 10.22 factors so that qualified purchasers have a reasonably 10.23 convenient opportunity to exercise their right to purchase 10.24 untaxed liquor. The commissioner may seek the opinion of the 10.25 tribal government prior to making an allocation. 10.26 (d) If there is more than one qualified Indian retailer who 10.27 wants to sell untaxed liquor on a reservation, the commissioner 10.28 shall allocate the aggregate amount of untaxed liquor allowed to 10.29 be delivered to qualified Indian retailers on the reservation 10.30 among the competing qualified Indian retailers. The 10.31 commissioner shall use location of the qualified Indian 10.32 retailers, the likely amount of liquor purchased by qualified 10.33 purchasers from those retailers, product mix of the competing 10.34 retailers, and other appropriate factors so that qualified 10.35 purchasers will have a reasonably convenient opportunity to 10.36 exercise their right to purchase untaxed liquor. The 11.1 commissioner may seek the opinion of the tribal government prior 11.2 to making an allocation. 11.3 Subd. 5. [RECORDKEEPING.] (a) When shipping or delivering 11.4 untaxed liquor to a qualified Indian retailer, the wholesaler 11.5 shall make a true duplicate invoice. The invoice must show the 11.6 complete details of the sale or delivery. The wholesaler must 11.7 send the duplicate to the commissioner not later than the 18th 11.8 day of the following calendar month. If the wholesaler fails to 11.9 comply with this section, the commissioner shall revoke the 11.10 permission granted to the wholesaler to keep a stock of untaxed 11.11 goods. 11.12 (b) A qualified Indian retailer must keep a log book of 11.13 exempt sales which contains the following information: 11.14 (1) date of sale; 11.15 (2) name and address of purchaser; 11.16 (3) quantity of liquor sold; 11.17 (4) total sales price; and 11.18 (5) any other information necessary to substantiate the 11.19 exempt sale. This may include a properly completed exemption 11.20 certificate or other evidence of membership in the reservation 11.21 on which the sale occurs. 11.22 (c) Qualified Indian retailers must retain required records 11.23 of exempt sales for 3-1/2 years. Upon written request, the 11.24 commissioner may inspect these records to the extent necessary 11.25 to verify compliance with the provisions of this section. If a 11.26 qualified Indian retailer does not provide to the commissioner 11.27 adequate proof of entitlement to exemption, the sale of liquor 11.28 shall be presumed to be a sale made to a nonqualified purchaser. 11.29 Subd. 6. [SALES TO NONQUALIFIED PURCHASERS.] A qualified 11.30 Indian retailer who sells or otherwise disposes of untaxed 11.31 liquor other than to a qualified purchaser shall collect from 11.32 the purchaser or transferee the tax imposed by this chapter and 11.33 remit the tax to the department of revenue on a form prescribed 11.34 by the commissioner by the 18th day of the month following the 11.35 month of sale. If the retailer fails to collect the tax from 11.36 the purchaser or transferee, or fails to remit the tax, the 12.1 retailer is personally responsible for the tax, and the 12.2 commissioner may seize any liquor destined to be delivered to 12.3 the retailer. The procedures for seized contraband outlined in 12.4 section 297G.20 apply to the seized liquor. The proceeds of the 12.5 sale of the liquor may be applied to any liquor liability owed 12.6 by the retailer after deducting all costs and expenses. 12.7 Nothing in this section relieves any person other than a 12.8 qualified purchaser or possessor of untaxed liquor from personal 12.9 liability for the tax. 12.10 Subd. 7. [TAX AGREEMENTS.] This section does not apply to 12.11 the sale or delivery of liquor to a reservation that has entered 12.12 into a tax agreement covering liquor as authorized by section 12.13 270.60. 12.14 Sec. 9. [297G.09] [RETURNS; PAYMENT OF TAX.] 12.15 Subdivision 1. [MONTHLY RETURNS; MANUFACTURERS, 12.16 WHOLESALERS, BREWERS, OR IMPORTERS.] On or before the 18th day 12.17 of each calendar month following the month in which a licensed 12.18 manufacturer or wholesaler first sells wine and distilled 12.19 spirits within the state, or a brewer or importer first sells or 12.20 imports fermented malt beverages, or a wholesaler knowingly 12.21 acquires title to or possession of untaxed fermented malt 12.22 beverages, the licensed manufacturer, wholesaler, brewer, or 12.23 importer liable for the excise tax must file a return with the 12.24 commissioner, and in addition must keep records and render 12.25 reports as required by the commissioner. Returns must be made 12.26 in a form and manner prescribed by the commissioner, and must 12.27 contain any other information required by the commissioner. 12.28 Returns must be accompanied by a remittance for the full unpaid 12.29 tax liability. Returns must be filed regardless of whether a 12.30 tax is due. 12.31 Subd. 2. [MONTHLY USE TAX RETURNS; CONSUMERS.] On or 12.32 before the 18th day of each calendar month, a consumer who has 12.33 acquired title to or possession of wine, distilled spirits, or 12.34 fermented malt beverages for use or storage in this state, upon 12.35 which wine, distilled spirits, or fermented malt beverages the 12.36 tax imposed by this chapter has not been paid, shall file a 13.1 return with the commissioner in the month following the month in 13.2 which the consumer obtains title to or possession of the wine, 13.3 distilled spirits, or fermented malt beverages. Returns must be 13.4 made in a form and manner prescribed by the commissioner and 13.5 must contain any other information required by the commissioner. 13.6 Returns must be accompanied by a remittance for the full unpaid 13.7 tax liability. 13.8 Subd. 3. [COMMON CARRIER RETURNS.] A common carrier 13.9 engaged in interstate transportation of passengers must file 13.10 monthly reports together with the tax payment on the sale of 13.11 alcoholic beverages sold in Minnesota. The report and payment 13.12 must be filed by the 18th day of the month following the month 13.13 in which the sale took place. A common carrier is permitted to 13.14 use a formula for the allocation of the total sales of alcoholic 13.15 beverages among states on the basis of passenger miles in each 13.16 state or some other method of allocation if written approval is 13.17 received from the commissioner. 13.18 Subd. 4. [EXTENSIONS.] When in the commissioner's 13.19 judgment, good cause exists, the commissioner may extend the 13.20 time for filing liquor tax returns for not more than six 13.21 months. The commissioner may require the taxpayer to file a 13.22 tentative return when the regularly required return is due, and 13.23 pay a tax on the basis of the tentative return at the times 13.24 required for the payment of taxes on the basis of the regularly 13.25 required return. 13.26 Subd. 5. [ACCELERATED TAX PAYMENT; PENALTY.] A person 13.27 liable for tax under this chapter having a liability of $120,000 13.28 or more during a fiscal year ending June 30, shall remit the 13.29 June liability for the next year in the following manner: 13.30 (a) Two business days before June 30 of the year, the 13.31 taxpayer shall remit the actual May liability and 75 percent of 13.32 the estimated June liability to the commissioner and file the 13.33 return in the form and manner prescribed by the commissioner. 13.34 (b) On or before August 18 of the year, the taxpayer shall 13.35 submit a return showing the actual June liability and pay any 13.36 additional amount of tax not remitted in June. A penalty is 14.1 imposed equal to ten percent of the amount of June liability 14.2 required to be paid in June less the amount remitted in June. 14.3 However, the penalty is not imposed if the amount remitted in 14.4 June equals the lesser of: 14.5 (1) 70 percent of the actual June liability; or 14.6 (2) 75 percent of the preceding May liability. 14.7 Subd. 6. [ELECTRONIC FUNDS TRANSFER.] A licensed brewer, 14.8 importer, or wholesaler having an excise tax liability of 14.9 $120,000 or more during a fiscal year ending June 30 must remit 14.10 all excise tax liabilities in the subsequent calendar year by 14.11 means of a funds transfer as defined in section 336.4A-104, 14.12 paragraph (a). The funds transfer payment date, as defined in 14.13 section 336.4A-401, must be on or before the date the excise tax 14.14 is due. If the date the excise tax is due is not a funds 14.15 transfer business day, as defined in section 336.4A-105, 14.16 paragraph (a), clause (4), the payment date must be on or before 14.17 the funds transfer business day next following the date the 14.18 excise tax is due. 14.19 Subd. 7. [ORDER PAYMENTS CREDITED.] All payments received 14.20 may, in the discretion of the commissioner, be credited first to 14.21 the oldest liability not secured by a judgment or lien, but in 14.22 all cases must be credited first to penalties, next to interest, 14.23 and then to the tax due. 14.24 Subd. 8. [INTEREST.] The amount of tax not timely paid, 14.25 together with any penalty imposed by this chapter, bears 14.26 interest at the rate specified in section 270.75 from the time 14.27 the tax should have been paid until paid. Any interest and 14.28 penalty is added to the tax and collected as a part of it. 14.29 Sec. 10. [297G.10] [DEPOSIT OF PROCEEDS.] 14.30 All tax revenues and other receipts payable to the state 14.31 under this chapter must be paid into the state treasury and 14.32 credited to the general fund. 14.33 Sec. 11. [297G.11] [INFORMATIONAL REPORTS.] 14.34 The following persons shall file with the commissioner a 14.35 monthly informational report in the form and manner prescribed 14.36 by the commissioner: 15.1 (1) a manufacturer, wholesaler, and importer licensed to 15.2 ship distilled spirits or wine into Minnesota; 15.3 (2) a person who manufactures distilled spirits or wine in 15.4 Minnesota; 15.5 (3) any other person who imports distilled spirits or wine 15.6 into Minnesota; 15.7 (4) a person who possesses, receives, stores, or warehouses 15.8 distilled spirits or wine in Minnesota, upon which the tax 15.9 imposed by this chapter has not been paid; and 15.10 (5) a person who possesses, receives, stores, or warehouses 15.11 distilled spirits or wine in Minnesota, which are required to 15.12 give bond as required by the Internal Revenue Code, subtitle E, 15.13 chapter 51. 15.14 No payment of any tax is required to be remitted with this 15.15 report. The report must be filed on or before the tenth day 15.16 following the end of each calendar month, regardless of whether 15.17 or not the person shipped, manufactured, possessed, received, 15.18 stored, or warehoused any distilled spirits or wine into or 15.19 within Minnesota during the previous month, unless the 15.20 commissioner determines that a longer filing period is 15.21 appropriate for a particular person. A person failing to file 15.22 this report is subject to the civil or criminal penalties 15.23 imposed by this chapter. 15.24 This section does not apply to the lawful importation of 15.25 wine and distilled spirits under section 297G.07, subdivision 2, 15.26 nor to any lawful manufacture of wine or distilled spirits 15.27 within the state for personal consumption. 15.28 Sec. 12. [297G.12] [REFUNDS.] 15.29 Subdivision 1. [OVERPAYMENT OF TAX.] An overpayment of the 15.30 tax imposed under this chapter may be refunded to the taxpayer, 15.31 provided that the claim for refund is filed within the time 15.32 prescribed under section 297G.16. 15.33 Subd. 2. [PRODUCTS DESTROYED.] The commissioner may refund 15.34 to a taxpayer the amount of tax paid under this chapter on 15.35 intoxicating liquor or fermented malt beverages which become 15.36 unfit for human consumption and are destroyed under an order by 16.1 a federal, state, or local agency while being held for sale by a 16.2 licensed retailer. The destruction must meet the requirements 16.3 of the environmental laws of this state. 16.4 Subd. 3. [WHOLESALER REFUND FOR BREAKAGE OF 16.5 INVENTORY.] The commissioner may refund to a wholesaler the 16.6 amount of tax paid under this chapter for the breakage of 16.7 inventory not subject to reimbursement from any insurance 16.8 proceeds. The commissioner may prescribe the method of proof 16.9 for obtaining the refund. 16.10 Subd. 4. [RETAILER REFUND FOR BREAKAGE OF INVENTORY.] 16.11 Refunds for breakage of inventory may be made to retailers only 16.12 if satisfactory proof is presented to the commissioner by the 16.13 wholesaler and the licensed retailer that the retailer was not 16.14 indemnified by insurance for the tax. The commissioner may 16.15 prescribe the method of proof required for obtaining the refund. 16.16 Subd. 5. [BAD DEBTS.] The commissioner may adopt rules 16.17 providing a refund of the tax paid under this chapter on 16.18 intoxicating liquor or wine if the tax paid qualifies as a bad 16.19 debt under section 166(a) of the Internal Revenue Code. 16.20 Subd. 6. [CREDIT AGAINST TAX.] The commissioner may credit 16.21 the amount determined under this section against taxes otherwise 16.22 payable under this chapter by the taxpayer. 16.23 Subd. 7. [SOURCE OF REFUND.] There is appropriated 16.24 annually from the general fund to the commissioner the sums 16.25 necessary to make the refunds provided by this section. 16.26 Sec. 13. [297G.13] [INSPECTION RIGHTS.] 16.27 The commissioner of public safety or the commissioner of 16.28 revenue, or their duly authorized employees, may, at any 16.29 reasonable time, without notice and without a search warrant, 16.30 enter in and upon a licensed premises, and examine the books, 16.31 papers, and records of a brewer, manufacturer, wholesaler, or 16.32 retailer for the purpose of determining whether the excise tax 16.33 has been paid, and may in addition inspect any premises where 16.34 fermented malt beverages are manufactured, sold, offered for 16.35 sale, possessed, or stored for the purpose of determining 16.36 whether the party is in full compliance with the provisions of 17.1 this chapter. 17.2 Sec. 14. [297G.14] [EXAMINATIONS AND AUDITS.] 17.3 Subdivision 1. [EXAMINATION OF THE TAXPAYER.] To determine 17.4 the accuracy of a return or report, or for the purpose of 17.5 collection, or in fixing liability or verifying information 17.6 regarding any tax under this chapter, the commissioner may make 17.7 reasonable examinations or investigations of a taxpayer's place 17.8 of business, tangible personal property, equipment, computer 17.9 systems and facilities, pertinent books, records, papers, 17.10 vouchers, computer printouts, accounts, and documents. 17.11 Subd. 2. [ACCESS TO RECORDS OF OTHER PERSONS IN CONNECTION 17.12 WITH THE EXAMINATION OF TAXPAYER.] When conducting an 17.13 investigation or an audit of a taxpayer, or for the purpose of 17.14 collection, or in fixing liability or verifying information 17.15 regarding any tax under this chapter, the commissioner may 17.16 examine, except where privileged by law, the relevant records 17.17 and files of a person, business, institution, financial 17.18 institution, state agency, agency of the United States 17.19 government, or agency of any other state where permitted by 17.20 statute, agreement, or reciprocity. The commissioner may compel 17.21 production of these records by subpoena. A subpoena may be 17.22 served directly by the commissioner. 17.23 Subd. 3. [POWER TO COMPEL TESTIMONY.] In the 17.24 administration of any tax under this chapter, the commissioner 17.25 may: 17.26 (1) administer oaths or affirmations and compel by subpoena 17.27 the attendance of witnesses, testimony, and the production of a 17.28 person's pertinent books, records, papers, and other data for 17.29 inspection and copying; 17.30 (2) examine under oath or affirmation any person regarding 17.31 the business of a taxpayer concerning any relevant matter 17.32 incident to the administration of any tax under this chapter. 17.33 The fees of witnesses required by the commissioner to attend a 17.34 hearing are equal to those allowed to witnesses appearing before 17.35 courts of this state. The fees must be paid in the manner 17.36 provided for the payment of other expenses incident to the 18.1 administration of any tax under this chapter; and 18.2 (3) in addition to other remedies that may be available, 18.3 bring an action in equity by the state against a taxpayer for an 18.4 injunction ordering the taxpayer to file a complete and proper 18.5 return or amended return. The district courts of this state 18.6 have jurisdiction over the action and disobedience of an 18.7 injunction issued under this clause may be punished as a 18.8 contempt of district court. 18.9 Subd. 4. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 18.10 IS KNOWN.] An investigation may extend to a person that the 18.11 commissioner determines has access to information that may be 18.12 relevant to the examination or investigation. When a subpoena 18.13 requiring the production of records as described in subdivision 18.14 4 is served on a third-party recordkeeper, written notice of the 18.15 subpoena must be mailed to the taxpayer and to any other person 18.16 who is identified in the subpoena. The notices must be given 18.17 within three days of the day on which the subpoena is served. 18.18 Notice to the taxpayer required by this section is sufficient if 18.19 it is mailed to the last address on record with the commissioner. 18.20 The provisions of this subdivision relating to notice to 18.21 the taxpayer or other parties identified in the subpoena do not 18.22 apply if there is reasonable cause to believe that the giving of 18.23 notice may lead to attempts to conceal, destroy, or alter 18.24 records relevant to the examination, to prevent the 18.25 communication of information from other persons through 18.26 intimidation, bribery, or collusion, or to flee to avoid 18.27 prosecution, testifying, or production of records. 18.28 Subd. 5. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 18.29 IS NOT KNOWN.] A subpoena that does not identify the person or 18.30 persons whose tax liability is investigated may be served only 18.31 if: 18.32 (1) the subpoena relates to the investigation of a 18.33 particular person or an ascertainable group or class of persons; 18.34 (2) there is reasonable basis for believing that the person 18.35 or group or class of persons may fail or may have failed to 18.36 comply with the tax laws administered by the commissioner; 19.1 (3) the information sought to be obtained from the 19.2 examination of the records, and the identity of the person or 19.3 persons with respect to whose liability the subpoena is issued, 19.4 is not readily available from other sources; 19.5 (4) the subpoena is clear and specific concerning the 19.6 information sought to be obtained; and 19.7 (5) the information sought to be obtained is limited solely 19.8 to the scope of the investigation. 19.9 The party served with a subpoena that does not identify the 19.10 person or persons with respect to whose tax liability the 19.11 subpoena is issued may, within 20 days after service of the 19.12 subpoena, petition the district court in the judicial district 19.13 in which that party is located for a determination concerning 19.14 whether the commissioner has complied with all the requirements 19.15 in clauses (1) to (5), and thus, whether the subpoena is 19.16 enforceable. If no petition is made by the party served within 19.17 the time prescribed, the subpoena has the effect of a court 19.18 order. 19.19 Subd. 6. [REQUEST BY TAXPAYER FOR SUBPOENA.] When the 19.20 commissioner has the power to issue a subpoena for investigative 19.21 or auditing purposes, the commissioner shall honor a reasonable 19.22 request by the taxpayer to issue a subpoena on the taxpayer's 19.23 behalf, if in connection with the investigation or audit. 19.24 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 19.25 SUBPOENA.] Disobedience of subpoenas issued under this section 19.26 shall be punished by the district court of the district in which 19.27 the party served with the subpoena is located, in the same 19.28 manner as contempt of the district court. 19.29 Subd. 8. [COST OF PRODUCTION OF RECORDS.] The cost of 19.30 producing records of a third party required by a subpoena must 19.31 be paid by the taxpayer, if the taxpayer requests the subpoena 19.32 to be issued, or if the taxpayer has the records available but 19.33 has refused to provide them to the commissioner. In other cases 19.34 when the taxpayer cannot produce records and the commissioner 19.35 then initiates a subpoena for third-party records, the 19.36 commissioner shall pay the reasonable cost of producing the 20.1 records. The commissioner may later assess the reasonable costs 20.2 against the taxpayer if the records contribute to the 20.3 determination of an assessment of tax against the taxpayer. 20.4 Subd. 9. [PHYSICAL INVENTORY.] The commissioner or the 20.5 commissioner's authorized agents may, as considered necessary, 20.6 require a manufacturer, wholesaler, or retailer to furnish a 20.7 physical inventory of all wine and distilled spirits in stock. 20.8 The inventory must contain the information that the commissioner 20.9 requests and must be certified by an officer of the corporation. 20.10 Sec. 15. [297G.15] [ASSESSMENTS.] 20.11 Subdivision 1. [GENERAL RULE.] The commissioner shall make 20.12 determinations, corrections, and assessments with respect to any 20.13 tax under this chapter, including interest, additions to taxes, 20.14 and assessable penalties. The commissioner may use statistical 20.15 or other sampling techniques consistent with generally accepted 20.16 auditing standards in examining returns or records and making 20.17 assessments. 20.18 Subd. 2. [COMMISSIONER FILED RETURNS.] If a taxpayer fails 20.19 to file a required return, the commissioner, from information in 20.20 the commissioner's possession or obtainable by the commissioner, 20.21 may make a return for the taxpayer. The return is prima facie 20.22 correct and valid. 20.23 Subd. 3. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 20.24 TAXPAYER.] (a) When a return has been filed and the commissioner 20.25 determines that the tax disclosed by the return is different 20.26 than the tax determined by the examination, the commissioner 20.27 shall send an order of assessment to the taxpayer. When no 20.28 return has been filed, the commissioner may make a return for 20.29 the taxpayer under subdivision 2 or may send an order of 20.30 assessment under this subdivision. The order must explain the 20.31 basis for the assessment and must explain the taxpayer's appeal 20.32 rights. An order of assessment is final when made but may be 20.33 reconsidered by the commissioner under this chapter. 20.34 (b) The taxes are considered assessed when the commissioner 20.35 has prepared a notice of tax assessment and mailed it to the 20.36 person required to file a return to the post office address 21.1 given in the return. The notice of tax assessment must be sent 21.2 by mail to the post office address given in the return and the 21.3 record of the mailing is presumptive evidence of the giving of 21.4 notice, and such records must be preserved by the commissioner. 21.5 (c) No collection action can be taken, including the filing 21.6 of liens under section 270.69, and no late payment penalty under 21.7 this chapter is imposed when a return has been filed for the 21.8 taxable period upon which the order is based, if the amount 21.9 shown on the order is paid to the commissioner: 21.10 (1) within 60 days after the order has been mailed to the 21.11 taxpayer by the commissioner; or 21.12 (2) if an administrative appeal is filed under this 21.13 chapter, or a tax court appeal is filed under chapter 271, 21.14 within 60 days following final determination of the appeal if 21.15 the appeal is based upon a constitutional challenge to the tax, 21.16 and if not, when the decision of the tax court is made. 21.17 Subd. 4. [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 21.18 refund or credit is considered an underpayment of tax on the 21.19 date made. An assessment of a deficiency arising out of an 21.20 erroneous refund or credit must be made within 3-1/2 years from 21.21 the date prescribed for filing the return, plus any extension of 21.22 time granted for filing the return, but only if filed within the 21.23 extended time, or two years from the time the tax is paid in 21.24 full, whichever period expires later. 21.25 Subd. 5. [ASSESSMENT PRESUMED VALID.] A return or 21.26 assessment of tax made by the commissioner is prima facie 21.27 correct and valid. The taxpayer has the burden of establishing 21.28 its incorrectness or invalidity in any related action or 21.29 proceeding. 21.30 Subd. 6. [AGGREGATE REFUND OR ASSESSMENT.] The 21.31 commissioner, on examining returns of a taxpayer for more than 21.32 one year or period, may issue one order covering the period 21.33 under examination that reflects the aggregate refund or 21.34 additional tax due. 21.35 Subd. 7. [SUFFICIENCY OF NOTICE.] An order of assessment, 21.36 sent postage prepaid by United States mail to the taxpayer at 22.1 the taxpayer's last known address, is sufficient even if the 22.2 taxpayer is deceased or is under a legal disability, or, in the 22.3 case of a corporation, has terminated its existence, unless the 22.4 department has been provided with a new address by a party 22.5 authorized to receive notices of assessment. 22.6 Sec. 16. [297G.16] [STATUTES OF LIMITATIONS.] 22.7 Subdivision 1. [GENERAL RULE.] Except as otherwise 22.8 provided in this chapter, the amount of any tax due must be 22.9 assessed within 3-1/2 years after a return is filed. 22.10 Subd. 2. [DATE OF FILING.] For the purposes of this 22.11 section, a return filed before the last day prescribed by law 22.12 for filing is considered filed on the last day. 22.13 Subd. 3. [FALSE OR FRAUDULENT RETURN OR CLAIM FOR REFUND; 22.14 NO RETURN.] When a person required to file a return under this 22.15 chapter files a false or fraudulent return or claim for refund, 22.16 or fails to file a return, the tax may be assessed, and a 22.17 proceeding in court for the collection of such tax may be begun 22.18 at any time. 22.19 Subd. 4. [OMISSION IN EXCESS OF 25 PERCENT.] If a person 22.20 required to file a return omits from the return an amount 22.21 properly includable in it that is in excess of 25 percent of the 22.22 amount of tax reported in the return, the tax may be assessed, 22.23 or a proceeding in court for the collection of the tax may be 22.24 begun, at any time within 6-1/2 years after the return was filed. 22.25 Subd. 5. [TIME LIMIT FOR REFUNDS.] Unless otherwise 22.26 provided in this chapter, a claim for a refund of an overpayment 22.27 of tax must be filed within 3-1/2 years from the date prescribed 22.28 for filing the return, plus any extension of time granted for 22.29 filing the return, but only if filed within the extended time, 22.30 or two years from the time the tax is paid in full, whichever 22.31 period expires later. Claimants under this section are subject 22.32 to the notice requirements of section 289A.38, subdivision 7. 22.33 Subd. 6. [TIME LIMIT FOR A DESTRUCTION ORDER REFUND.] 22.34 Claims for refund under section 297G.12, subdivision 2, must be 22.35 filed with the commissioner within one year from the date of the 22.36 breakage or destruction order. 23.1 Subd. 7. [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 23.2 refund must be filed with the commissioner within one year of 23.3 the filing of the taxpayer's income tax return containing the 23.4 bad debt deduction that is being claimed. 23.5 Subd. 8. [CONSENT TO EXTEND TIME.] If, before the 23.6 expiration of the time prescribed in this chapter for the 23.7 assessment of the tax, the commissioner and the person filing 23.8 the return consent in writing to an extension of time for the 23.9 assessment of the tax, the tax may be assessed at any time 23.10 before the expiration of the period agreed upon. The period so 23.11 agreed upon may be extended by subsequent agreements in writing 23.12 made before the expiration of the period previously agreed upon. 23.13 Subd. 9. [BANKRUPTCY; SUSPENSION OF TIME.] The running of 23.14 the period during which a tax must be assessed or collection 23.15 proceedings commenced is suspended during the period from the 23.16 date of a filing of a petition in bankruptcy until 30 days after 23.17 either notice to the commissioner that the bankruptcy 23.18 proceedings have been closed or dismissed, or the automatic stay 23.19 has been terminated or has expired, whichever occurs first. 23.20 The suspension of the statute of limitations under this 23.21 section applies to the person the petition in bankruptcy is 23.22 filed against and other persons who may also be wholly or 23.23 partially liable for the tax. 23.24 Sec. 17. [297G.17] [INTEREST.] 23.25 Subdivision 1. [INTEREST RATE.] When interest is required 23.26 under this section, interest is computed at the rate specified 23.27 in section 270.75. 23.28 Subd. 2. [LATE PAYMENT.] If a tax under this chapter is 23.29 not paid within the time named by law for payment, the unpaid 23.30 tax bears interest from the date the tax should have been paid 23.31 until the date the tax is paid. 23.32 Subd. 3. [EXTENSIONS.] When an extension of time for 23.33 payment has been granted, interest must be paid from the date 23.34 the payment should have been made, if no extension had been 23.35 granted, until the date the tax is paid. 23.36 Subd. 4. [ADDITIONAL ASSESSMENTS.] When a taxpayer is 24.1 liable for additional taxes because of a redetermination by the 24.2 commissioner, or for any other reason, the additional taxes bear 24.3 interest from the time the tax should have been paid, without 24.4 regard to an extension allowed, until the date the tax is paid. 24.5 Subd. 5. [ERRONEOUS REFUNDS OR CREDITS.] In the case of an 24.6 erroneous refund or credit, interest begins to accrue from the 24.7 date the refund or credit was paid unless the erroneous refund 24.8 or credit results from a mistake of the department, in which 24.9 case no interest or penalty is imposed, unless the deficiency 24.10 assessment is not satisfied within 60 days of the order. 24.11 Subd. 6. [INTEREST ON JUDGMENTS.] Notwithstanding section 24.12 549.09, if judgment is entered in favor of the commissioner with 24.13 regard to any tax under this chapter, the judgment bears 24.14 interest at the rate given in section 270.75 from the date the 24.15 judgment is entered until the date of payment. 24.16 Subd. 7. [INTEREST ON PENALTIES.] (a) A penalty imposed 24.17 under section 297G.18, subdivisions 2 to 7, bears interest from 24.18 the date the return or payment was required to be filed or paid, 24.19 including any extensions, to the date of payment of the penalty. 24.20 (b) A penalty not included in paragraph (a) bears interest 24.21 only if it is not paid within ten days from the date of the 24.22 notice. In that case interest is imposed from the date of 24.23 notice to the date of payment. 24.24 Subd. 8. [INTEREST ON OVERPAYMENTS.] Interest must be paid 24.25 on an overpayment refunded or credited to the taxpayer from the 24.26 date of payment of the tax until the date the refund is paid or 24.27 credited. 24.28 Sec. 18. [297G.18] [CIVIL PENALTIES.] 24.29 Subdivision 1. [GENERAL RULE.] The commissioner may 24.30 recover the amount of any tax due under this chapter, as well as 24.31 any interest and penalty in a civil action. The collection of a 24.32 tax, interest, or penalty does not bar any prosecution under 24.33 this chapter. 24.34 Subd. 2. [PENALTY FOR FAILURE TO PAY TAX.] If a tax 24.35 imposed by this chapter is not paid within the time specified 24.36 for payment, a penalty is added to the amount required to be 25.1 shown as tax. The penalty is five percent of the tax not paid 25.2 on or before the date specified for payment of the tax if the 25.3 failure is for not more than 30 days, with an additional penalty 25.4 of five percent of the amount of tax remaining unpaid during 25.5 each additional 30 days or fraction of 30 days during which the 25.6 failure continues, not exceeding 15 percent in the aggregate. 25.7 Subd. 3. [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 25.8 a taxpayer fails to make and file a return within the time 25.9 prescribed, including any extension, a penalty of five percent 25.10 of the amount of tax not timely paid is added to the tax. If no 25.11 tax is due, a penalty of $25 is assessed for each unfiled return. 25.12 Subd. 4. [COMBINED PENALTIES.] When penalties are imposed 25.13 under subdivisions 2 and 3, the penalties combined must not 25.14 exceed 38 percent in the aggregate. 25.15 Subd. 5. [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR 25.16 RULES.] If part of an additional assessment is due to negligence 25.17 or intentional disregard of the provisions of the applicable tax 25.18 laws or rules of the commissioner, but without an intent to 25.19 defraud, there must be added to the tax an amount equal to ten 25.20 percent of the additional assessment. 25.21 Subd. 6. [PENALTY FOR REPEATED FAILURES TO FILE OR PAY 25.22 TAXES.] If there is a pattern by a person of repeated failures 25.23 to timely file returns or timely pay taxes, and written notice 25.24 is given that a penalty will be imposed if such failures 25.25 continue, a penalty of 25 percent of the amount of tax not 25.26 timely paid as a result of each such subsequent failure is added 25.27 to the tax. The penalty can be abated under the abatement 25.28 authority in section 270.07, subdivisions 1, paragraph (e), and 25.29 6. 25.30 Subd. 7. [PENALTY FOR FALSE OR FRAUDULENT RETURN; 25.31 EVASION.] If a person files a false or fraudulent return, or 25.32 attempts in any manner to evade or defeat a tax or payment of 25.33 tax, there is imposed on the person a penalty equal to 50 25.34 percent of the tax due for the period to which the return 25.35 related, less amounts paid by the person on the basis of the 25.36 false or fraudulent return. 26.1 Subd. 8. [REVOCATION OR SUSPENSION OF LICENSE.] The 26.2 commissioner may certify to the commissioner of public safety 26.3 any failure to pay taxes when due as a violation of the statute 26.4 relating to the sale of intoxicating liquor for possible 26.5 revocation or suspension of license. 26.6 Subd. 9. [FAILURE TO FILE INFORMATIONAL RETURNS.] A person 26.7 required to file informational returns or reports that fails to 26.8 do so as required by this chapter is assessed a $25 penalty for 26.9 each month the return remains unfiled. 26.10 Subd. 10. [PAYMENT OF PENALTIES.] The penalties imposed by 26.11 this section are collected and paid in the same manner as taxes. 26.12 Subd. 11. [PENALTIES ARE ADDITIONAL.] The civil penalties 26.13 imposed by this section are in addition to the criminal 26.14 penalties imposed by this chapter. 26.15 Sec. 19. [297G.19] [CRIMINAL PENALTIES.] 26.16 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 26.17 A person required to file a return, report, or other document 26.18 with the commissioner who fails to do so is guilty of a 26.19 misdemeanor. 26.20 (b) A person required to pay or to collect and remit a tax 26.21 under this chapter, who fails to do so when required, is guilty 26.22 of a misdemeanor. 26.23 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY; 26.24 WILLFUL EVASION.] (a) A person required to file a return, 26.25 report, or other document with the commissioner, who knowingly, 26.26 rather than accidentally, inadvertently, or negligently, fails 26.27 to file it when required, is guilty of a gross misdemeanor. A 26.28 person required to file a return, report, or other document who 26.29 willfully attempts in any manner to evade or defeat a tax by 26.30 failing to file it when required, is guilty of a felony. 26.31 (b) A person required to pay or to collect and remit a tax 26.32 under this chapter, who knowingly, rather than accidentally, 26.33 inadvertently, or negligently, fails to file it when required, 26.34 is guilty of a gross misdemeanor. A person required to pay or 26.35 to collect and remit a tax under this chapter, who willfully 26.36 attempts to evade or defeat tax law by failing to do so when 27.1 required, is guilty of a felony. 27.2 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 27.3 person who files with the commissioner a return, report, or 27.4 other document, known by the person to be fraudulent or false 27.5 concerning a material matter, is guilty of a felony. 27.6 (b) A person who knowingly aids or assists in, or advises 27.7 in the preparation or presentation of a return, report, or other 27.8 document that is fraudulent or false concerning a material 27.9 matter, whether or not the falsity or fraud is committed with 27.10 the knowledge or consent of the person authorized or required to 27.11 present the return, report, or other document, is guilty of a 27.12 felony. 27.13 Subd. 4. [IMPORTATION BY INDIVIDUALS FROM ANOTHER STATE.] 27.14 (a) A person entering Minnesota from another state who imports 27.15 or possesses one liter or more, but fewer than 25 liters of 27.16 untaxed intoxicating liquor, or 288 ounces (nine quarts) or 27.17 more, but fewer than 6,800 ounces (225 quarts) of untaxed 27.18 fermented malt beverages is guilty of a misdemeanor. 27.19 (b) A person entering Minnesota from another state who 27.20 imports or possesses 25 liters or more, but fewer than 225 27.21 liters of untaxed intoxicating liquor, or 6,800 ounces (225 27.22 quarts) or more, but fewer than 34,000 ounces (1,225 quarts) of 27.23 untaxed fermented malt beverages is guilty of a gross 27.24 misdemeanor. 27.25 (c) A person entering Minnesota from another state who 27.26 imports or possesses 225 liters or more of untaxed intoxicating 27.27 liquor, or 34,000 ounces (1,225 quarts) or more of untaxed 27.28 fermented malt beverages is guilty of a felony. 27.29 Subd. 5. [IMPORTATION BY INDIVIDUALS FROM A FOREIGN 27.30 COUNTRY.] (a) A person entering Minnesota from a foreign country 27.31 who imports or possesses four liters or more, but fewer than 100 27.32 liters of untaxed intoxicating liquor, or 320 ounces (ten quarts) 27.33 or more, but fewer than 8,000 ounces (250 quarts) of untaxed 27.34 fermented malt beverages is guilty of a misdemeanor. 27.35 (b) A person entering Minnesota from a foreign country who 27.36 imports or possesses 100 liters or more, but fewer than 500 28.1 liters of untaxed intoxicating liquor, or 8,000 ounces (250 28.2 quarts) or more, but fewer than 40,000 ounces (1,250 quarts) of 28.3 untaxed fermented malt beverages is guilty of a gross 28.4 misdemeanor. 28.5 (c) A person entering Minnesota from a foreign country who 28.6 imports or possesses 500 liters or more of untaxed intoxicating 28.7 liquor, or 40,000 ounces (1,250 quarts) or more of untaxed 28.8 fermented malt beverages is guilty of a felony. 28.9 Subd. 6. [PENALTIES ARE ADDITIONAL.] Criminal penalties 28.10 imposed by this section are in addition to any civil penalties 28.11 imposed by this chapter. 28.12 Subd. 7. [OTHER PENALTIES.] Any violation of this chapter 28.13 unless otherwise specified is a misdemeanor. 28.14 Subd. 8. [STATUTE OF LIMITATIONS.] Notwithstanding section 28.15 628.26, or any other provision of the criminal laws of this 28.16 state, an indictment may be found and filed, or a complaint 28.17 filed, upon a criminal offense named in this section, in the 28.18 proper court within six years after the offense is committed. 28.19 Sec. 20. [297G.20] [CONTRABAND.] 28.20 Subdivision 1. [CONTRABAND DEFINED.] The following are 28.21 declared to be contraband and therefore subject to civil and 28.22 criminal penalties and seizure under this chapter: 28.23 (1) All distilled spirits, wine, and fermented malt 28.24 beverages possessed or held with intent to sell without payment 28.25 of an excise tax. 28.26 (2) All distilled spirits, wine, and fermented malt 28.27 beverages sold without payment of an excise tax. 28.28 (3) All distilled spirits, wine, and fermented malt 28.29 beverages transported without payment of an excise tax. 28.30 (4) Devices including, but not limited to, motor vehicles, 28.31 trailers, snowmobiles, airplanes, and boats used with the 28.32 knowledge of the owner, or of a person operating with the 28.33 consent of the owner, for the storage or transportation of 28.34 distilled spirits, wine, and fermented malt beverages which are 28.35 contraband under this subdivision. 28.36 Subd. 2. [EXCEPTION.] When distilled spirits, wine, and 29.1 fermented malt beverages are being transported in the course of 29.2 interstate commerce, or are in movement from either a public 29.3 warehouse to a wholesaler upon orders from a manufacturer or 29.4 wholesaler, or from one wholesaler to another, the distilled 29.5 spirits, wine, and fermented malt beverages are not contraband, 29.6 notwithstanding the provisions of subdivision 1. 29.7 Subd. 3. [SEIZURE.] Distilled spirits, wine, fermented 29.8 malt beverages, or other property made contraband by subdivision 29.9 1 may be seized by the commissioner of revenue or public safety 29.10 and their authorized agents or by any sheriff or other police 29.11 officer, with or without process, and are subject to forfeiture 29.12 as provided in subdivisions 4 and 5. 29.13 Subd. 4. [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 29.14 DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 29.15 seizure of alleged contraband, the person making the seizure 29.16 shall make available an inventory of the property seized to the 29.17 person from whom the the property was seized, if known, and file 29.18 a copy with both the commissioners of revenue and public safety. 29.19 Within ten days after the date of service of the inventory, the 29.20 person from whom the property was seized or any person claiming 29.21 an interest in the property may file with the seizing authority 29.22 a demand for judicial determination of whether the property was 29.23 lawfully subject to seizure and forfeiture. Within 60 days 29.24 after the date of the filing of the demand, the seizing 29.25 authority must bring an action in the district court of the 29.26 county where seizure was made to determine the issue of 29.27 forfeiture. 29.28 (b) The action must be brought in the name of the state and 29.29 must be prosecuted by the county attorney or by the attorney 29.30 general. The court shall hear the action without a jury and 29.31 determine the issues of fact and law involved. 29.32 (c) If a judgment of forfeiture is entered, the seizing 29.33 authority may, unless the judgment is stayed pending an appeal, 29.34 either: 29.35 (1) cause the forfeited property to be destroyed; or 29.36 (2) cause it to be sold at a public auction as provided by 30.1 law. 30.2 (d) If demand for judicial determination is made and no 30.3 action is commenced by the seizing authority as provided in this 30.4 subdivision, the property must be released by the seizing 30.5 authority and delivered to the person entitled to it. If no 30.6 demand is made, the property seized is considered forfeited to 30.7 the seizing authority by operation of law and may be disposed of 30.8 by the seizing authority as provided for a judgment of 30.9 forfeiture. When the seizing authority is satisfied that a 30.10 person from whom property is seized was acting in good faith and 30.11 without intent to evade the tax imposed by this chapter, the 30.12 seizing authority shall release the property seized without 30.13 further legal proceedings. 30.14 Subd. 5. [DISPOSAL.] (a) The property described in 30.15 subdivision 1, clause (4), must be confiscated after conviction 30.16 of the person from whom it was seized, upon compliance with the 30.17 following procedure: the seizing authority shall file with the 30.18 court a separate complaint against the property, describing it 30.19 and charging its use in the specific violation, and specifying 30.20 substantially the time and place of the unlawful use. A copy of 30.21 the complaint must be served upon the defendant or person in 30.22 charge of the seizure, if any. 30.23 (b) If the person arrested is acquitted, the court shall 30.24 dismiss the complaint against the property and order it returned 30.25 to the persons legally entitled to it. Upon conviction of the 30.26 person arrested, the court shall issue an order directed to any 30.27 person known or believed to have any right, title, or interest 30.28 in, or lien upon, any of the property, and to persons unknown 30.29 claiming any right, title, interest, or lien in it, describing 30.30 the property and (1) stating that it was seized and that a 30.31 complaint against it, charging the specified violation, has been 30.32 filed with the court, (2) requiring the persons to file with the 30.33 court administrator their answer to the complaint, setting forth 30.34 any claim they may have to any right or title to, interest in, 30.35 or lien upon the property, within 30 days after the service of 30.36 the order, and (3) notifying them in substance that if they fail 31.1 to file their answer within the time, the property will be 31.2 ordered sold by the seizing authority. 31.3 (c) The court shall cause the order to be served upon any 31.4 person known or believed to have any right, title, interest, or 31.5 lien as in the case of a summons in a civil action, and upon 31.6 unknown persons by publication, as provided for service of 31.7 summons in a civil action. If an answer is filed within the 31.8 time provided, the court shall fix a time for hearing, which 31.9 must not be less than ten nor more than 30 days after the time 31.10 for filing the answer expires. If no answer is filed within the 31.11 time prescribed, upon affidavit by the court administrator, 31.12 setting forth the fact, the court shall order the property sold 31.13 by the seizing authority. Seventy-five percent of the proceeds 31.14 of the sale of forfeited property, after payment of seizure, 31.15 storage, forfeiture, and sale expenses, must be forwarded to the 31.16 seizing authority for deposit as a supplement to its operating 31.17 fund or similar fund for official use, and 25 percent must be 31.18 forwarded to the county attorney or other prosecuting agency 31.19 that handled the forfeiture for deposit as a supplement to its 31.20 operating fund or similar fund for prosecutorial purposes. 31.21 (d) At the time fixed for hearing, unless continued for 31.22 cause, the matter must be heard and determined by the court, 31.23 without a jury as in other civil actions. If the court finds 31.24 that the property, or any part of it, was used in the violation 31.25 specified in the complaint, it shall order the unlawfully used 31.26 property sold as provided by law, unless the owner shows to the 31.27 satisfaction of the court that the owner had no notice or 31.28 knowledge or reason to believe that the property was used or 31.29 intended to be used in the violation. The officer making a 31.30 sale, after deducting the expense of keeping the property, the 31.31 fee for seizure, and the costs of the sale, shall pay all liens 31.32 according to their priority, which are established at the 31.33 hearing as being bona fide and as existing without the lienor 31.34 having any notice or knowledge that the property was being used 31.35 or was intended to be used for or in connection with the 31.36 violation specified in the order of the court, and shall pay the 32.1 balance of the proceeds to the seizing authority for official 32.2 use and sharing in the manner provided in paragraph (a). A sale 32.3 under this section frees the property from all liens on it. 32.4 Appeal from the order of the district is available as in other 32.5 civil cases. 32.6 (e) At any time after seizure of the articles specified in 32.7 this subdivision, and before the hearing provided for, the 32.8 property must be returned to the owner or person having a legal 32.9 right to its possession, upon execution of a good and valid bond 32.10 to the state, with corporate surety, in the sum of at least $100 32.11 and not more than double of the value of the property seized, to 32.12 be approved by the court in which the case is triable, or a 32.13 judge of it, conditioned to abide any order and the judgment of 32.14 the court, and to pay the full value of the property at the time 32.15 of the seizure. The seizing authority may dismiss the 32.16 proceedings outlined in this subdivision when the seizing 32.17 authority considers it in the public interest to do so. 32.18 Sec. 21. [297G.21] [ADMINISTRATIVE REVIEW.] 32.19 Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] A 32.20 taxpayer may obtain reconsideration by the commissioner of an 32.21 order assessing any tax imposed by this chapter, a denial of a 32.22 request for abatement of penalty, or a denial of a claim for 32.23 refund by filing an administrative appeal under subdivision 3. 32.24 A taxpayer cannot obtain reconsideration under this section if 32.25 the action taken by the commissioner is the outcome of an 32.26 administrative appeal. 32.27 Subd. 2. [NOTICE DATE.] For purposes of this section, the 32.28 term "notice date" means the date of the order adjusting the tax 32.29 or order denying a request for abatement, or, in the case of a 32.30 denied refund, the date of the notice of denial. 32.31 Subd. 3. [TIME AND CONTENT FOR ADMINISTRATIVE APPEAL.] 32.32 Within 60 days after the notice date, the taxpayer must file a 32.33 written appeal with the commissioner. The appeal need not be in 32.34 any particular form but must contain the following information: 32.35 (1) the name and address of the taxpayer; 32.36 (2) if a corporation, the state of incorporation of the 33.1 taxpayer, and the principal place of business of the 33.2 corporation; 33.3 (3) the Minnesota identification number or social security 33.4 number of the taxpayer; 33.5 (4) the type of tax involved; 33.6 (5) the date; 33.7 (6) the tax years or periods involved and the amount of tax 33.8 involved for each year or period; 33.9 (7) the findings in the notice that the taxpayer disputes; 33.10 (8) a summary statement that the taxpayer relies on for 33.11 each exception; and 33.12 (9) the taxpayer's signature or signature of the taxpayer's 33.13 duly authorized agent. 33.14 Subd. 4. [EXTENSIONS.] When requested in writing and 33.15 within the time allowed for filing an administrative appeal, the 33.16 commissioner may extend the time for filing an appeal for a 33.17 period of not more than 30 days from the expiration of the 60 33.18 days from the notice date. 33.19 Subd. 5. [DETERMINATION OF APPEAL.] On the basis of 33.20 applicable law and available information, the commissioner shall 33.21 determine the validity, if any, in whole or part of the appeal 33.22 and notify the taxpayer of the decision. This notice must be in 33.23 writing and contain the basis for the determination. 33.24 Subd. 6. [AGREEMENT DETERMINING TAX LIABILITY.] When it 33.25 appears to be in the best interests of the state, the 33.26 commissioner may settle any taxes, penalties, or interest that 33.27 the commissioner has under consideration by virtue of an appeal 33.28 filed under this section. An agreement must be in writing and 33.29 signed by the commissioner and the taxpayer, or the taxpayer's 33.30 representative authorized by the taxpayer to enter into an 33.31 agreement. The agreement must be filed in the office of the 33.32 commissioner. 33.33 Subd. 7. [APPEAL OF AN ADMINISTRATIVE DETERMINATION.] 33.34 Following the determination or settlement of an appeal and 33.35 notwithstanding any period of limitations for making assessments 33.36 or other determinations to the contrary, the commissioner shall 34.1 issue an order reflecting that disposition. If the statute of 34.2 limitations for making assessments or other determinations would 34.3 have expired before the issuance of this order, except for this 34.4 section, the order is limited to issues or matters contained in 34.5 the appealed determination. Except in the case of an agreement 34.6 determining tax under this section, the order is appealable to 34.7 the Minnesota tax court under section 271.06. 34.8 Subd. 8. [APPEAL WHERE NO DETERMINATION.] If the 34.9 commissioner does not make a determination within six months of 34.10 the filing of an administrative appeal, the taxpayer may elect 34.11 to appeal to tax court. 34.12 Subd. 9. [EXEMPTION FROM ADMINISTRATIVE PROCEDURE 34.13 ACT.] This section is not subject to chapter 14. 34.14 Sec. 22. [297G.22] [JUDICIAL REVIEW.] 34.15 In lieu of an administrative appeal under this chapter, a 34.16 person aggrieved by an order of the commissioner fixing a tax, 34.17 penalty, or interest under this chapter may, within 60 days from 34.18 the date of the notice of the order, appeal to the tax court in 34.19 the manner provided under section 271.06. 34.20 Sec. 23. [PURPOSE.] 34.21 It is the intent of the legislature to simplify Minnesota's 34.22 liquor tax laws by consolidating and recodifying tax 34.23 administration and compliance provisions now contained 34.24 throughout Minnesota Statutes, chapter 297C. Due to the 34.25 complexity of the recodification, prior provisions are repealed 34.26 on the effective date of the new provisions. The repealed 34.27 provisions, however, continue to remain in effect until 34.28 superseded by the analogous provision in the new law. 34.29 Sec. 24. [REPEALER.] 34.30 Minnesota Statutes 1996, sections 297C.01; 297C.02; 34.31 297C.03; 297C.04; 297C.045; 297C.05; 297C.06; 297C.07; 297C.08; 34.32 297C.09; 297C.10; 297C.11; 297C.12; 297C.13; 297C.14; 297C.16; 34.33 and 297C.17, are repealed. 34.34 Sec. 25. [EFFECTIVE DATE.] 34.35 Sections 1 and 23 are effective the day following final 34.36 enactment. Sections 2 to 12, 18, 21, and 22 are effective for 35.1 returns, reports, taxes, or other payments first becoming due on 35.2 or after August 1, 1997. Sections 13, 20, and 24 are effective 35.3 August 1, 1997. Sections 14 and 15 are effective for audits or 35.4 investigations initiated on or after August 1, 1997. Section 16 35.5 is effective for returns becoming due on or after August 1, 35.6 1997. Section 17 is effective for interest on amounts first 35.7 becoming due to the commissioner on or after August 1, 1997. 35.8 Section 19 is effective for crimes committed on or after August 35.9 1, 1997. 35.10 ARTICLE 2 35.11 TECHNICAL CHANGES 35.12 Section 1. Minnesota Statutes 1996, section 16A.26, is 35.13 amended to read: 35.14 16A.26 [ONE DEPOSITORY ACCOUNT FOR EACH TAX.] 35.15 Notwithstanding sections 297.13, 298.17, 298.282, 298.39, 35.16 298.396,297C.02 to 297C.08297G.10, and similar laws to the 35.17 contrary relating to the depositing, disposition, or 35.18 apportionment of tax receipts, the commissioner may use one 35.19 depository account for each tax. To do so, there must be enough 35.20 information to identify and dispose of or apportion the tax 35.21 under law. The commissioner shall ask the appropriate officials 35.22 for the transfers and necessary certifications. The 35.23 commissioner may issue directives to carry out this section. 35.24 Sec. 2. Minnesota Statutes 1996, section 340A.301, 35.25 subdivision 8, is amended to read: 35.26 Subd. 8. [SALES WITHOUT LICENSE.] A licensed brewer may 35.27 without an additional license sell malt liquor to employees or 35.28 retired former employees, in amounts of not more than 768 fluid 35.29 ounces in a week for off-premise consumption only. A collector 35.30 of commemorative bottles, those terms are as defined in 35.31 section297C.01297G.01, subdivisions 4 and 5, may sell them to 35.32 another collector without a license. It is also lawful for a 35.33 collector of beer cans to sell unopened cans of a brand which 35.34 has not been sold commercially for at least two years to another 35.35 collector without obtaining a license. The amount sold to any 35.36 one collector in any one month shall not exceed 768 fluid 36.1 ounces. A licensed manufacturer of wine containing not more than 36.2 25 percent alcohol by volume nor less than 51 percent wine made 36.3 from Minnesota-grown agricultural products may sell at on-sale 36.4 or off-sale wine made on the licensed premises without a further 36.5 license. 36.6 Sec. 3. Minnesota Statutes 1996, section 340A.302, 36.7 subdivision 1, is amended to read: 36.8 Subdivision 1. [LICENSES REQUIRED.] Except as provided in 36.9 sections297C.09297G.07, subdivision 2, and 340A.301, 36.10 subdivision 1, no retailer or other person may ship or cause to 36.11 be shipped alcoholic beverages or ethyl alcohol for personal use 36.12 or to a licensed manufacturer or wholesaler without obtaining an 36.13 importer's license from the commissioner. 36.14 Sec. 4. Minnesota Statutes 1996, section 340A.414, 36.15 subdivision 7, is amended to read: 36.16 Subd. 7. [INSPECTION.] An establishment holding a permit 36.17 under this section is open for inspection by the commissioner 36.18 and the commissioner's representative and by peace officers, who 36.19 may enter and inspect during reasonable hours. Intoxicating 36.20 liquor sold, served, or displayed in violation of law may be 36.21 seized and may be disposed of under section297C.12297G.20. 36.22 Sec. 5. Minnesota Statutes 1996, section 340A.417, is 36.23 amended to read: 36.24 340A.417 [SHIPMENTS INTO MINNESOTA.] 36.25 (a) Notwithstanding section297C.09297G.07, subdivision 2, 36.26 or any provision of this chapter, a winery licensed in a state 36.27 which affords Minnesota wineries an equal reciprocal shipping 36.28 privilege may ship, for personal use and not for resale, not 36.29 more than two cases of wine, containing a maximum of nine liters 36.30 per case, in any calendar year to any resident of Minnesota age 36.31 21 or over. Delivery of a shipment under this section may not 36.32 be deemed a sale in this state. 36.33 (b) The shipping container of any wine sent into or out of 36.34 Minnesota under this section must be clearly labeled to indicate 36.35 that the package cannot be delivered to a person under the age 36.36 of 21 years. 37.1 (c) No person may (1) advertise shipments authorized under 37.2 this section, or (2) by advertisement or otherwise, solicit 37.3 shipments authorized by this section. No shipper located 37.4 outside Minnesota may advertise such interstate reciprocal wine 37.5 shipments in Minnesota. 37.6 (d) It is not the intent of this section to impair the 37.7 distribution of wine through distributors or importing 37.8 distributors, but only to permit shipments of wine for personal 37.9 use. 37.10 Sec. 6. Minnesota Statutes 1996, section 340A.7035, is 37.11 amended to read: 37.12 340A.7035 [CONSUMER IMPORTATION; ILLEGAL ACTS.] 37.13 A person who enters Minnesota from another state and who 37.14 imports or possesses alcoholic beverages in excess of the 37.15 tax-exempt quantities provided for in section297C.07,37.16paragraphs (10), (11), and (12),297G.07, subdivision 2, 37.17 paragraphs (a), (b), and (c), is guilty of a misdemeanor. A 37.18 person who enters Minnesota from a foreign country who imports 37.19 or possesses alcoholic beverages on which the excise tax imposed 37.20 bysections 297C.02 and 297C.09chapter 297G has not been paid, 37.21 other than the tax-exempt quantities provided for in 37.22 section297C.07, paragraphs (10), (11), and (12),297G.07, 37.23 subdivision 2, paragraphs (a), (b), and (c), is guilty of a 37.24 misdemeanor. A peace officer, the commissioner of public 37.25 safety, and employees designated by the commissioner of public 37.26 safety may seize alcoholic beverages imported or possessed in 37.27 violation of this section. This section does not apply to the 37.28 consignments of alcoholic beverages shipped into this state by 37.29 holders of Minnesota import licenses or Minnesota manufacturers 37.30 and wholesalers when licensed by the commissioner of public 37.31 safety or to common carriers with licenses to sell alcoholic 37.32 beverages in more than one state when licensed by the 37.33 commissioner of public safety to sell alcoholic beverages in 37.34 this state. 37.35 Sec. 7. [EFFECTIVE DATE.] 37.36 Sections 1 to 6 are effective August 1, 1997.