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TAX AND FEE UPDATE INFORMATION as of August 2005

Below is the Minnesota Department of Revenue’s overview of the cigarette sales tax and the health impact fee imposed on cigarettes and other tobacco products that went into effect on August 1, 2005.

Change in cigarette sales tax

Starting Aug. 1, 2005, sales tax on cigarettes will be collected from cigarette distributors instead of retailers. This change applies to cigarettes only, not to other tobacco products.

If you're a retailer, stop charging sales tax on cigarettes starting August 1. Continue to charge sales tax on other tobacco products (i.e., pipe tobacco, cigars, snuff, roll-your-own, plug tobacco). You must also pay a one-time floor-stock tax on all cigarettes in your inventory at 12:01 a.m. on August 1. File Form CT215-R, Cigarette Floor Stock Fee and Sales Tax for Retailers by Aug. 10, 2005. Payment is due Sept. 7, 2005.

If you're a distributor or subjobber (reseller or vending machine operator), a sales tax will be included in the cost of stamps starting Aug. 1, 2005. You must also pay a one-time floor-stock tax on all cigarettes in your inventory at 12:01 a.m. on August 1. File Form CT215, Cigarette Floor Stock Fee and Sales Tax for Distributors and Subjobbers by Aug. 10, 2005. Payment is due Sept. 7, 2005.

Health impact fee

Starting Aug. 1, 2005, a health impact fee will be imposed on cigarettes and other tobacco products. The fee is $0.75 per pack of cigarettes and 35 percent of the wholesale sales price of other tobacco products. The fee is collected from cigarette and tobacco distributors and subjobbers, not retailers.

If you're a retailer, you must pay a one-time floor stock fee on cigarettes in your inventory at 12:01 a.m. on August 1. File Form CT215-R by Aug. 10, 2005. Payment is due Sept. 7, 2005. The floor-stock fee for retailers does not apply to other tobacco products, only cigarettes.

If you're a distributor or subjobber, you must pay a one-time floor-stock fee on stamped cigarettes and unaffixed stamps in your inventory at 12:01 a.m. on August 1. In addition, distributors (not subjobbers) must also pay a floor stock fee on other tobacco products. Use Form CT215, Cigarette Floor Stock Fee and Sales Tax for Distributors and Subjobbers for cigarette inventory and Form CT315, Tobacco Floor Stock Health Impact Fee for tobacco inventory. File forms by Aug. 10, 2005. Payment is due Sept. 7, 2005.

If you have questions about these law changes, contact the Minnesota Department of Revenue: http://www.taxes.state.mn.us/special/tobacco/taxhelp/ask_question.shtml.