| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to liquor; regulating direct shippers of wine; imposing sales and use taxes, |
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| 3 | 3 | | 1.3 liquor gross receipts taxes, and excise taxes on direct shipments of wine; providing |
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| 4 | 4 | | 1.4 for licensing; providing for classification of data; requiring reports; amending |
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| 5 | 5 | | 1.5 Minnesota Statutes 2024, sections 13.6905, by adding a subdivision; 295.75, |
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| 6 | 6 | | 1.6 subdivision 4; 297A.83, subdivision 1; 297G.07, subdivision 1; 299A.706; |
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| 7 | 7 | | 1.7 340A.304; 340A.417; proposing coding for new law in Minnesota Statutes, chapter |
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| 8 | 8 | | 1.8 340A. |
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| 9 | 9 | | 1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 10 | 10 | | 1.10 Section 1. Minnesota Statutes 2024, section 13.6905, is amended by adding a subdivision |
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| 11 | 11 | | 1.11to read: |
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| 12 | 12 | | 1.12 Subd. 39.Direct wine shipments.Data obtained and shared by the commissioner of |
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| 13 | 13 | | 1.13public safety relating to direct shipments of wine are governed by sections 340A.550 and |
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| 14 | 14 | | 1.14340A.555. |
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| 15 | 15 | | 1.15 EFFECTIVE DATE.This section is effective the day following final enactment. |
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| 16 | 16 | | 1.16 Sec. 2. Minnesota Statutes 2024, section 295.75, subdivision 4, is amended to read: |
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| 17 | 17 | | 1.17 Subd. 4.Tax collection required.A liquor retailer with nexus in Minnesota or a |
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| 18 | 18 | | 1.18direct-ship winery as defined in section 340A.550, who is not subject to tax under subdivision |
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| 19 | 19 | | 1.192, is required to collect the tax imposed under subdivision 3 from the purchaser of the liquor |
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| 20 | 20 | | 1.20and give the purchaser a receipt for the tax paid. The tax collected must be remitted to the |
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| 21 | 21 | | 1.21commissioner in the same manner prescribed for the taxes imposed under chapter 297A. |
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| 22 | 22 | | 1.22 EFFECTIVE DATE.This section is effective for sales and purchases occurring on or |
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| 23 | 23 | | 1.23after July 1, 2025. |
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| 24 | 24 | | 1Sec. 2. |
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| 25 | 25 | | REVISOR JSK/NS 25-0488103/12/25 |
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| 26 | 26 | | State of Minnesota |
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| 27 | 27 | | This Document can be made available |
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| 28 | 28 | | in alternative formats upon request |
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| 29 | 29 | | HOUSE OF REPRESENTATIVES |
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| 30 | 30 | | H. F. No. 2552 |
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| 31 | 31 | | NINETY-FOURTH SESSION |
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| 32 | 32 | | Authored by Kotyza-Witthuhn, Allen and West03/20/2025 |
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| 33 | 33 | | The bill was read for the first time and referred to the Committee on Judiciary Finance and Civil Law 2.1 Sec. 3. Minnesota Statutes 2024, section 297A.83, subdivision 1, is amended to read: |
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| 34 | 34 | | 2.2 Subdivision 1.Persons applying.(a) A retailer required to collect and remit sales taxes |
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| 35 | 35 | | 2.3under section 297A.66 or a direct-ship winery as defined in section 340A.550 shall file with |
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| 36 | 36 | | 2.4the commissioner an application for a permit under this section. |
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| 37 | 37 | | 2.5 (b) A retailer making retail sales from outside this state to a destination within this state |
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| 38 | 38 | | 2.6who is not required to obtain a permit under paragraph (a) may nevertheless voluntarily file |
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| 39 | 39 | | 2.7an application for a permit. |
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| 40 | 40 | | 2.8 (c) The commissioner may require any person or class of persons obligated to file a use |
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| 41 | 41 | | 2.9tax return under section 289A.11, subdivision 3, to file an application for a permit. |
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| 42 | 42 | | 2.10 EFFECTIVE DATE.This section is effective for permits applied for after June 30, |
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| 43 | 43 | | 2.112025. |
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| 44 | 44 | | 2.12 Sec. 4. Minnesota Statutes 2024, section 297G.07, subdivision 1, is amended to read: |
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| 45 | 45 | | 2.13 Subdivision 1.Exemptions.The following are not subject to the excise tax: |
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| 46 | 46 | | 2.14 (1) Sales by a manufacturer, brewer, or wholesaler for shipment outside the state in |
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| 47 | 47 | | 2.15interstate commerce. |
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| 48 | 48 | | 2.16 (2) Alcoholic beverages sold or transferred between Minnesota wholesalers. |
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| 49 | 49 | | 2.17 (3) Sales to common carriers engaged in interstate transportation of passengers, except |
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| 50 | 50 | | 2.18as provided in this chapter. |
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| 51 | 51 | | 2.19 (4) Malt beverages served by a brewery for on-premise consumption at no charge, or |
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| 52 | 52 | | 2.20distributed to brewery employees for on-premise consumption under a labor contract. |
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| 53 | 53 | | 2.21 (5) Shipments of wine to Minnesota residents under section 340A.417. |
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| 54 | 54 | | 2.22 (6) (5) Fruit juices naturally fermented or beer naturally brewed in the home for family |
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| 55 | 55 | | 2.23use and not sold or offered for sale. |
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| 56 | 56 | | 2.24 (7) (6) Sales of wine for sacramental purposes under section 340A.316. |
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| 57 | 57 | | 2.25 (8) (7) Alcoholic beverages sold to authorized manufacturers of food products or |
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| 58 | 58 | | 2.26pharmaceutical firms. The alcoholic beverage must be used exclusively in the manufacture |
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| 59 | 59 | | 2.27of food products or medicines. For purposes of this clause, "manufacturer" means a person |
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| 60 | 60 | | 2.28who manufactures food products intended for sale to wholesalers or retailers for ultimate |
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| 61 | 61 | | 2.29sale to the consumer. |
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| 62 | 62 | | 2.30 (9) (8) Liqueur-filled candy. |
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| 63 | 63 | | 2Sec. 4. |
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| 64 | 64 | | REVISOR JSK/NS 25-0488103/12/25 3.1 (10) (9) Sales to a federal agency, that the state of Minnesota is prohibited from taxing |
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| 65 | 65 | | 3.2under the Constitution or laws of the United States or under the Constitution of Minnesota. |
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| 66 | 66 | | 3.3 (11) (10) Sales to Indian tribes as defined in section 297G.08. |
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| 67 | 67 | | 3.4 (12) (11) Shipments of intoxicating liquor from foreign countries to diplomatic personnel |
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| 68 | 68 | | 3.5of foreign countries assigned to service in this state. |
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| 69 | 69 | | 3.6 (13) (12) Shipments of bulk distilled spirits or bulk wine to farm wineries licensed under |
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| 70 | 70 | | 3.7section 340A.315 for input to the final product. |
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| 71 | 71 | | 3.8 EFFECTIVE DATE.This section is effective July 1, 2025. |
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| 72 | 72 | | 3.9 Sec. 5. Minnesota Statutes 2024, section 299A.706, is amended to read: |
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| 73 | 73 | | 3.10 299A.706 ALCOHOL ENFORCEMENT ACCOUNT; APPROPRIATION. |
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| 74 | 74 | | 3.11 An alcohol enforcement account is created in the special revenue fund, consisting of |
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| 75 | 75 | | 3.12money credited to the account by law. Money in the account may be appropriated by law |
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| 76 | 76 | | 3.13for (1) costs of the Alcohol and Gambling Division related to administration and enforcement |
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| 77 | 77 | | 3.14of sections 340A.403, subdivision 4; 340A.414, subdivision 1a; and 340A.504, subdivision |
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| 78 | 78 | | 3.157; and 340A.550, subdivisions 2, 4, 5, and 6; and (2) costs of the State Patrol. |
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| 79 | 79 | | 3.16 EFFECTIVE DATE.This section is effective July 1, 2025. |
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| 80 | 80 | | 3.17 Sec. 6. Minnesota Statutes 2024, section 340A.304, is amended to read: |
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| 81 | 81 | | 3.18 340A.304 LICENSE SUSPENSION AND REVOCATION. |
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| 82 | 82 | | 3.19 The commissioner shall revoke, or suspend for up to 60 days, a license issued under |
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| 83 | 83 | | 3.20section 340A.301 or, 340A.302, or 340A.550, or impose a fine of up to $2,000 for each |
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| 84 | 84 | | 3.21violation, on a finding that the licensee has violated a state law or rule of the commissioner |
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| 85 | 85 | | 3.22relating to the possession, sale, transportation, or importation of alcoholic beverages. A |
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| 86 | 86 | | 3.23license revocation or suspension under this section is a contested case under sections 14.57 |
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| 87 | 87 | | 3.24to 14.69 of the Administrative Procedure Act. |
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| 88 | 88 | | 3.25 EFFECTIVE DATE.This section is effective July 1, 2025. |
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| 89 | 89 | | 3.26 Sec. 7. Minnesota Statutes 2024, section 340A.417, is amended to read: |
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| 90 | 90 | | 3.27 340A.417 WINE SHIPMENTS INTO MINNESOTA. |
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| 91 | 91 | | 3.28 (a) Notwithstanding section 297G.07, subdivision 2, or any provision of this chapter |
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| 92 | 92 | | 3.29except for section 340A.550, a winery licensed in a state other than Minnesota, or a winery |
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| 93 | 93 | | 3.30located in Minnesota, may ship, for personal use and not for resale, not more than two 12 |
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| 94 | 94 | | 3Sec. 7. |
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| 95 | 95 | | REVISOR JSK/NS 25-0488103/12/25 4.1cases of wine, containing a maximum of nine liters per case, in any calendar year to any |
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| 96 | 96 | | 4.2resident of Minnesota age 21 or over. Delivery of a shipment under this section may not be |
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| 97 | 97 | | 4.3deemed a sale in this state. |
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| 98 | 98 | | 4.4 (b) The shipping container of any wine sent under this section must be clearly marked |
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| 99 | 99 | | 4.5"Alcoholic Beverages: adult signature (over 21 years of age) required." |
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| 100 | 100 | | 4.6 (c) It is not the intent of this section to impair the distribution of wine through distributors |
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| 101 | 101 | | 4.7or importing distributors, but only to permit shipments of wine for personal use. |
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| 102 | 102 | | 4.8 (d) Except for a violation of section 295.75 or chapters 297A and 297G, no criminal |
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| 103 | 103 | | 4.9penalty may be imposed on a person for a violation of this section or section 340A.550 |
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| 104 | 104 | | 4.10other than a violation described in paragraph (e) or (f). Whenever it appears to the |
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| 105 | 105 | | 4.11commissioner that any person has engaged in any act or practice constituting a violation of |
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| 106 | 106 | | 4.12this section or section 340A.550, and the violation is not within two years of any previous |
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| 107 | 107 | | 4.13violation of this section, the commissioner shall issue and cause to be served upon the person |
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| 108 | 108 | | 4.14an order requiring the person to cease and desist from violating this section. The order must |
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| 109 | 109 | | 4.15give reasonable notice of the rights of the person to request a hearing and must state the |
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| 110 | 110 | | 4.16reason for the entry of the order. Unless otherwise agreed between the parties, a hearing |
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| 111 | 111 | | 4.17shall be held not later than seven 20 days after the request for the hearing is received by the |
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| 112 | 112 | | 4.18commissioner after which and within 20 days after the receipt of the administrative law |
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| 113 | 113 | | 4.19judge's report and subsequent exceptions and argument, the commissioner shall issue an |
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| 114 | 114 | | 4.20order vacating the cease and desist order, modifying it, or making it permanent as the facts |
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| 115 | 115 | | 4.21require. If no hearing is requested within 30 days of the service of the order, the order |
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| 116 | 116 | | 4.22becomes final and remains in effect until modified or vacated by the commissioner. All |
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| 117 | 117 | | 4.23hearings shall be conducted in accordance with the provisions of chapter 14. If the person |
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| 118 | 118 | | 4.24to whom a cease and desist order is issued fails to appear at the hearing after being duly |
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| 119 | 119 | | 4.25notified, the person shall be deemed in default, and the proceeding may be determined |
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| 120 | 120 | | 4.26against the person upon consideration of the cease and desist order, the allegations of which |
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| 121 | 121 | | 4.27may be deemed to be true. |
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| 122 | 122 | | 4.28 (e) Any person who violates this section or section 340A.550 within two years of a |
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| 123 | 123 | | 4.29violation for which a cease and desist order was issued under paragraph (d), is guilty of a |
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| 124 | 124 | | 4.30misdemeanor. |
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| 125 | 125 | | 4.31 (f) Any person who commits a third or subsequent violation of this section or section |
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| 126 | 126 | | 4.32340A.550 within any subsequent two-year period is guilty of a gross misdemeanor. |
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| 127 | 127 | | 4.33 EFFECTIVE DATE.This section is effective July 1, 2025. |
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| 128 | 128 | | 4Sec. 7. |
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| 129 | 129 | | REVISOR JSK/NS 25-0488103/12/25 5.1 Sec. 8. [340A.550] DIRECT SHIPMENTS OF WINE; LICENSING, TAXATION, |
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| 130 | 130 | | 5.2AND RESTRICTIONS. |
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| 131 | 131 | | 5.3 Subdivision 1.Definitions.(a) "Direct-ship purchaser" means a person who purchases |
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| 132 | 132 | | 5.4wine for personal use and not for resale from a winery located in a state other than Minnesota |
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| 133 | 133 | | 5.5for delivery to a Minnesota address. |
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| 134 | 134 | | 5.6 (b) "Direct-ship winery" means a winery licensed in a state other than Minnesota that |
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| 135 | 135 | | 5.7manufactures and makes a retail sale of wine and ships the wine to a direct-ship purchaser |
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| 136 | 136 | | 5.8as authorized under section 340A.417. |
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| 137 | 137 | | 5.9 Subd. 2.License requirements.(a) A direct-ship winery must apply to the commissioner |
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| 138 | 138 | | 5.10for a direct-ship license. The commissioner must not issue a license under this section unless |
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| 139 | 139 | | 5.11the applicant: |
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| 140 | 140 | | 5.12 (1) is a licensed winery in a state other than Minnesota and provides a copy of its current |
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| 141 | 141 | | 5.13license in any state in which it is licensed to manufacture wine; |
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| 142 | 142 | | 5.14 (2) provides a shipping address list, including all addresses from which it intends to ship |
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| 143 | 143 | | 5.15wine; |
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| 144 | 144 | | 5.16 (3) agrees to comply with the requirements of subdivision 4; and |
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| 145 | 145 | | 5.17 (4) consents to the jurisdiction of the Departments of Public Safety and Revenue; the |
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| 146 | 146 | | 5.18courts of this state; and any statute, law, or rule in this state related to the administration or |
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| 147 | 147 | | 5.19enforcement of this section, including any provision authorizing the commissioners of public |
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| 148 | 148 | | 5.20safety and revenue to audit a direct-ship winery for compliance with this and any related |
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| 149 | 149 | | 5.21section. |
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| 150 | 150 | | 5.22 (b) A direct-ship winery obtaining a license under this section must annually renew its |
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| 151 | 151 | | 5.23license by January 1 of each year and must inform the commissioner at the time of renewal |
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| 152 | 152 | | 5.24of any changes to the information previously provided in paragraph (a). |
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| 153 | 153 | | 5.25 (c) The application fee for a license is $50. The fee for a license renewal is $50. The |
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| 154 | 154 | | 5.26commissioner must deposit all fees received under this subdivision in the alcohol enforcement |
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| 155 | 155 | | 5.27account in the special revenue fund established under section 299A.706. |
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| 156 | 156 | | 5.28 Subd. 3.Direct-ship wineries; restrictions.(a) A direct-ship winery may only ship |
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| 157 | 157 | | 5.29wine from an address provided to the commissioner as required in subdivision 2, paragraph |
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| 158 | 158 | | 5.30(a), clause (2), or through a third-party provider whose name and address the licensee |
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| 159 | 159 | | 5.31provided to the commissioner in the licensee's application for a license. |
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| 160 | 160 | | 5Sec. 8. |
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| 161 | 161 | | REVISOR JSK/NS 25-0488103/12/25 6.1 (b) A direct-ship winery or its third-party provider may only ship wine from the |
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| 162 | 162 | | 6.2direct-ship winery's own production. |
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| 163 | 163 | | 6.3 Subd. 4.Taxation.A direct-ship winery must: |
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| 164 | 164 | | 6.4 (1) collect and remit the liquor gross receipts tax as required in section 295.75; |
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| 165 | 165 | | 6.5 (2) apply for a permit as required in section 297A.83 and collect and remit the sales and |
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| 166 | 166 | | 6.6use tax imposed as required in chapter 297A; |
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| 167 | 167 | | 6.7 (3) remit the tax as required in chapter 297G; and |
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| 168 | 168 | | 6.8 (4) provide a statement to the commissioner, on a form prescribed by the commissioner, |
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| 169 | 169 | | 6.9detailing each shipment of wine made to a resident of this state and any other information |
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| 170 | 170 | | 6.10required by the commissioner. |
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| 171 | 171 | | 6.11 Subd. 5.Private or nonpublic data; classification and sharing.(a) Data collected, |
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| 172 | 172 | | 6.12created, or maintained by the commissioner as required under this section are classified as |
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| 173 | 173 | | 6.13private data on individuals or nonpublic data, as defined in section 13.02, subdivisions 9 |
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| 174 | 174 | | 6.14and 12. |
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| 175 | 175 | | 6.15 (b) The commissioner must share data classified as private or nonpublic under this |
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| 176 | 176 | | 6.16section with the commissioner of revenue for purposes of administering section 295.75 and |
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| 177 | 177 | | 6.17chapters 289A, 297A, and 297G. |
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| 178 | 178 | | 6.18 Subd. 6.Enforcement; penalties.Section 340A.417, paragraphs (d), (e), and (f), apply |
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| 179 | 179 | | 6.19to this section. |
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| 180 | 180 | | 6.20 EFFECTIVE DATE.This section is effective July 1, 2025. |
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| 181 | 181 | | 6.21 Sec. 9. [340A.555] COMMON CARRIER REGULATIONS FOR DIRECT |
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| 182 | 182 | | 6.22SHIPMENTS OF WINE. |
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| 183 | 183 | | 6.23 Subdivision 1.Monthly report required.Each common carrier that contracts with a |
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| 184 | 184 | | 6.24winery under section 340A.417 for delivery of wine into this state must file with the |
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| 185 | 185 | | 6.25commissioner a monthly report of known wine shipments made by the carrier. The report |
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| 186 | 186 | | 6.26must be made in a form and manner as prescribed by the commissioner and must contain: |
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| 187 | 187 | | 6.27 (1) the name of the common carrier making the report; |
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| 188 | 188 | | 6.28 (2) the period of time covered by the report; |
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| 189 | 189 | | 6.29 (3) the name and business address of the consignor; |
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| 190 | 190 | | 6.30 (4) the name and address of the consignee; |
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| 191 | 191 | | 6Sec. 9. |
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| 192 | 192 | | REVISOR JSK/NS 25-0488103/12/25 7.1 (5) the weight of the package delivered to the consignee; |
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| 193 | 193 | | 7.2 (6) a unique tracking number; and |
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| 194 | 194 | | 7.3 (7) the date of delivery. |
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| 195 | 195 | | 7.4 Subd. 2.Record availability and retention.Upon written request by the commissioner, |
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| 196 | 196 | | 7.5any records supporting the report in subdivision 1 must be made available to the |
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| 197 | 197 | | 7.6commissioner within 30 days of the request. Any records containing information relating |
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| 198 | 198 | | 7.7to a required report must be retained and preserved for a period of two years, unless |
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| 199 | 199 | | 7.8destruction of the records prior to the end of the two-year period is authorized in writing |
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| 200 | 200 | | 7.9by the commissioner. All retained records must be open and available for inspection by the |
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| 201 | 201 | | 7.10commissioner upon written request. The commissioner must make the required reports |
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| 202 | 202 | | 7.11available to any law enforcement agency or regulatory body of any local government in the |
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| 203 | 203 | | 7.12state in which the common carrier making the report resides or does business. |
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| 204 | 204 | | 7.13 Subd. 3.Penalty.If a common carrier willfully violates the requirement to report a |
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| 205 | 205 | | 7.14delivery under this section or violates any rule related to the administration and enforcement |
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| 206 | 206 | | 7.15of this section, the commissioner must notify the common carrier in writing of the violation. |
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| 207 | 207 | | 7.16The commissioner may impose a fine in an amount not to exceed $500 for each subsequent |
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| 208 | 208 | | 7.17violation. |
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| 209 | 209 | | 7.18 Subd. 4.Exemptions.This section does not apply to common carriers regulated as |
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| 210 | 210 | | 7.19provided by United States Code, title 49, section 10101, et. seq.; or rail |
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| 211 | 211 | | 7.20trailer-on-flatcar/container-on-flatcar (TOFC/COFC) service, as provided by Code of Federal |
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| 212 | 212 | | 7.21Regulations, title 49, section 1090.1; or highway TOFC/COFC service provided by a rail |
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| 213 | 213 | | 7.22carrier, either itself or jointly with a motor carrier, as part of continuous intermodal freight |
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| 214 | 214 | | 7.23transportation, including but not limited to any other TOFC/COFC transportation as defined |
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| 215 | 215 | | 7.24under federal law. |
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| 216 | 216 | | 7.25 Subd. 5.Private or nonpublic data; classification and sharing.(a) Data collected, |
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| 217 | 217 | | 7.26created, or maintained by the commissioner as required under subdivision 1, clauses (4) to |
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| 218 | 218 | | 7.27(6), are classified as private data on individuals or nonpublic data, as defined in section |
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| 219 | 219 | | 7.2813.02, subdivisions 9 and 12. |
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| 220 | 220 | | 7.29 (b) The commissioner must share data classified as private or nonpublic under this |
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| 221 | 221 | | 7.30section with the commissioner of revenue for purposes of administering section 295.75 and |
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| 222 | 222 | | 7.31chapters 289A, 297A, and 297G. |
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| 223 | 223 | | 7.32 EFFECTIVE DATE.This section is effective July 1, 2025. |
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| 224 | 224 | | 7Sec. 9. |
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| 225 | 225 | | REVISOR JSK/NS 25-0488103/12/25 |
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