Minnesota: Tax Hike for Cigarettes and Tobacco
- Sales Tax Rate Changes
- Jun 10, 2013 | Gail Cole
Smokers in Minnesota may want to stock up on supplies during the next couple of weeks. On July 1, 2013, the state excise tax on cigarettes and tobacco products will increase to $2.83 per pack.
Effective July 1, the total Minnesota tax on a 20-pack of standard cigarettes (weighing less than 3 pounds per 1,000 cigarettes) will be:
- $3.323 for brands that have a legal settlement with the state.
- $3.823 for non-settlement brands.
Both of the above amounts include the increased excise tax and a $0.493 per pack sales tax. Smokers who prefer cigarettes made by companies that have not reached a settlement with the state are required to pay an extra $0.50 non-settlement fee per pack.
As of July 1, cigarette is defined as "any roll for smoking made wholly or in part of tobacco, that weights 4.5 pounds or less per thousand." Little cigars are taxed as cigarettes.
Other Tobacco Products
Effective July 1, most other tobacco products in Minnesota will be charged an excise tax that is 95% of the "wholesale sales price." For example, the excise tax on premium cigars will be "$3.50 per cigar or 95% of the wholesale price, whichever is less." (Emphasis mine).
Floor Stocks Tax
Because of the increase, all cigarette distributers, retailers and subjobbers are required to pay "a one-time floor stocks tax on existing inventory." That rate is:
- $1.731 per 20-count pack of cigarettes; and
- $2.16375 per 25-count pack of cigarettes.
January 1, 2014 will bring yet more changes:
- Moist snuff: "The excise tax on moist snuff will become $2.83 per container or 95 percent of the wholesale sales price, whichever is greater. Moist snuff will be taxed at 95 percent of the wholesale sales price through December 31, 2013.
- The definition of wholesale sales price, with respect to tax: "The price a distributor pays for a tobacco product plus any applicable federal excise tax, freight charges, or packaging costs (if they were not included in the purchase price)."
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