Minnesota House Bill HF1955

Minnesota 2023-2024 Regular Session

• Introduced: 2/16/23
• Refer: 2/16/23

Caption

June accelerated payment requirements repealed for cigarette and tobacco taxes and liquor taxes.

Impact

The repeal of the accelerated payment requirement is designed to simplify the process for distributors of cigarette and tobacco products, potentially making it easier for businesses to manage their cash flow. The implementation of this change is set to take effect for the June 2023 tax liabilities. By removing the prior penalty and accelerated payment mechanisms, the bill may encourage compliance among smaller distributors who may have found these requirements overly burdensome.

Summary

House File 1955 seeks to reform the way tax liabilities related to cigarette and tobacco sales are handled in Minnesota by repealing the requirement for accelerated payments of these taxes due in June. Specifically, the bill amends Minnesota Statutes to eliminate previous mandates that required distributors to pay a portion of their estimated tax liabilities two business days before the end of June. This change aims to ease the tax burden on distributors and streamline the tax payment process.

Contention

While supporters of HF1955 argue that it encourages business growth and reduces the financial strain on distributors, there may be concerns about the implications for state revenue. Critics could argue that eliminating preemptive payment requirements may delay tax collections and impact the state's budget, particularly in times when revenue is critical. Additionally, the repeal may raise concerns among advocates of public health, as it could inadvertently facilitate tobacco product sales by easing the regulatory burden on distributors.