Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF1003 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to transportation; taxes; abolishing motor fuel taxes; making conforming
3	3	1.3 changes; transferring money; appropriating money; amending Minnesota Statutes
4	4	1.4 2024, sections 84.794, subdivision 1; 84.803, subdivision 1; 84.83, subdivision 2;
5	5	1.5 84.927, subdivision 1; 86B.706, subdivisions 2, 3; 89.70; 89.72; 115C.08,
6	6	1.6 subdivision 3; 296A.03, subdivision 2; 296A.04, subdivisions 1, 3; 296A.05,
7	7	1.7 subdivision 1; 296A.06, subdivision 2; 296A.061; 296A.12; 296A.15; 296A.21;
8	8	1.8 296A.22, subdivisions 1, 2, 3, 6, 7, 9; 296A.23, subdivisions 2, 8; 296A.24,
9	9	1.9 subdivision 1; 297A.68, subdivision 19; repealing Minnesota Statutes 2024, sections
10	10	1.10 296A.01, subdivision 36; 296A.07; 296A.08; 296A.083; 296A.09; 296A.10;
11	11	1.11 296A.11; 296A.13; 296A.14; 296A.16, subdivisions 1, 2, 3, 4, 4a, 4b, 5, 7, 8;
12	12	1.12 296A.17; 296A.18, subdivisions 1, 2, 3, 4, 5, 6, 6a, 7, 8; 296A.22, subdivision 4;
13	13	1.13 296A.23, subdivisions 3, 4, 6; 296A.26.
14	14	1.14BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
15	15	1.15 ARTICLE 1
16	16	1.16 MOTOR FUEL TAXES ABOLISHED
17	17	1.17 Section 1. Minnesota Statutes 2024, section 296A.03, subdivision 2, is amended to read:
18	18	1.18 Subd. 2.Qualifications.(a) A distributor's license shall be issued to any responsible
19	19	1.19person who applies and qualifies as a distributor.
20	20	1.20 (b) Upon application to the commissioner, the commissioner must issue a distributor's
21	21	1.21license to any person who:
22	22	1.22 (1) receives petroleum products in this state for bulk storage and subsequent distribution
23	23	1.23by tank truck;
24	24	1.24 (2) produces, manufactures, or refines petroleum products in this state;
25	25	1Article 1 Section 1.
26	26	25-02126 as introduced01/22/25 REVISOR KRB/MI
27	27	SENATE
28	28	STATE OF MINNESOTA
29	29	S.F. No. 1003NINETY-FOURTH SESSION
30	30	(SENATE AUTHORS: COLEMAN and Mathews)
31	31	OFFICIAL STATUSD-PGDATE
32	32	Introduction and first reading02/06/2025
33	33	Referred to Transportation 2.1 (3) imports petroleum products into this state via boat, barge, or pipeline for storage and
34	34	2.2subsequent delivery at or further transportation from boat, barge, or pipeline terminals in
35	35	2.3this state; or
36	36	2.4 (4) holds a license and performs a function under the motor fuel tax law of an adjoining
37	37	2.5state equivalent to that of a distributor under this chapter, who desires to ship or deliver
38	38	2.6petroleum products from that state to persons in this state not licensed as distributors in this
39	39	2.7state and who agrees to assume with respect to all petroleum products so shipped or delivered
40	40	2.8the liabilities of a distributor receiving petroleum products in this state; provided, however,
41	41	2.9that any such license shall be issued only for the purpose of permitting such person to receive
42	42	2.10in this state the petroleum products so shipped or delivered. Except as herein provided, all
43	43	2.11persons licensed as distributors under this clause shall have the same rights and privileges
44	44	2.12and be subject to the same duties, requirements, and penalties as other licensed distributors.
45	45	2.13 (c) The commissioner shall not issue or renew a license to a person otherwise eligible
46	46	2.14under this subdivision if the person:
47	47	2.15 (1) has unpaid tax due under this chapter;
48	48	2.16 (2) (1) has unfiled tax returns or reports due under this chapter;
49	49	2.17 (3) (2) has had a license issued pursuant to this chapter revoked within the last five years;
50	50	2.18or
51	51	2.19 (4) (3) has had an equivalent license issued by another state or Canadian province revoked
52	52	2.20within the last five years for failure to pay a tax or file a tax return or report.
53	53	2.21 Sec. 2. Minnesota Statutes 2024, section 296A.04, subdivision 1, is amended to read:
54	54	2.22 Subdivision 1.Application and fee.No person, except a licensed distributor, shall
55	55	2.23engage in the business of selling or delivering special fuel, upon which no tax has been
56	56	2.24imposed, as a special fuel dealer without having applied for and secured from the
57	57	2.25commissioner a special fuel dealer's license. The application shall be made in a form and
58	58	2.26manner prescribed by the commissioner and shall be accompanied by the payment of a $25
59	59	2.27license fee. A special fuel dealer's license shall be issued to any responsible person qualifying
60	60	2.28as a special fuel dealer who makes proper application. The license shall be displayed in a
61	61	2.29conspicuous manner in the place of business and shall expire annually on November 30.
62	62	2.30 Sec. 3. Minnesota Statutes 2024, section 296A.04, subdivision 3, is amended to read:
63	63	2.31 Subd. 3.Sales ticket.A sales ticket shall be issued for each delivery of special fuel to
64	64	2.32a special fuel dealer or bulk purchaser. A sales ticket shall also be issued for each delivery
65	65	2Article 1 Sec. 3.
66	66	25-02126 as introduced01/22/25 REVISOR KRB/MI 3.1into the supply tank of an aircraft or a licensed motor vehicle, if so requested by the
67	67	3.2purchaser. The person who delivers the special fuel shall issue the sales ticket and shall
68	68	3.3show on the ticket the name and address of the purchaser, date of sale, number of gallons,
69	69	3.4price per gallon, amount of tax, and total amount of sale.
70	70	3.5 Sec. 4. Minnesota Statutes 2024, section 296A.05, subdivision 1, is amended to read:
71	71	3.6 Subdivision 1.Application and fee.No person shall receive special fuel, upon which
72	72	3.7no tax has been imposed, as a bulk purchaser without having applied for and secured from
73	73	3.8the commissioner a bulk purchaser's license. The application shall be made in a form and
74	74	3.9manner prescribed by the commissioner and shall be accompanied by the payment of a $25
75	75	3.10license fee. A bulk purchaser's license shall be issued to any responsible person qualifying
76	76	3.11as a bulk purchaser who makes proper application. The license shall be displayed in a
77	77	3.12conspicuous manner in the place of business and shall expire annually on November 30.
78	78	3.13 Sec. 5. Minnesota Statutes 2024, section 296A.06, subdivision 2, is amended to read:
79	79	3.14 Subd. 2.Suspension of license.(a) Notwithstanding subdivision 1, the license of a
80	80	3.15distributor, special fuel dealer, or bulk purchaser that has not filed a tax return or report or
81	81	3.16paid a delinquent tax or fee within five days after notice and demand by the commissioner
82	82	3.17is suspended. The suspension remains in effect until the demanded tax return or report has
83	83	3.18been filed and the tax and fees shown on that return or report have been paid. If the
84	84	3.19commissioner determines that the failure to file or failure to pay is due to reasonable cause,
85	85	3.20then a license must not be suspended, or if suspended, must be reinstated.
86	86	3.21 (b) A licensee whose license is suspended under this subdivision may request a contested
87	87	3.22case hearing under chapter 14. Any such hearing must be held within 20 days of the issuance
88	88	3.23of the notice and demand issued under paragraph (a), unless the parties agree to a later
89	89	3.24hearing date. The administrative law judge's report must be issued within 20 days after the
90	90	3.25close of the hearing record, unless the parties agree to a later report issuance date. The
91	91	3.26commissioner must issue a final decision within 30 days after receipt of the report of the
92	92	3.27administrative law judge and subsequent exceptions and argument under section 14.61. The
93	93	3.28suspension imposed under paragraph (a) remains in effect during any contested case hearing
94	94	3.29process requested pursuant to this paragraph.
95	95	3Article 1 Sec. 5.
96	96	25-02126 as introduced01/22/25 REVISOR KRB/MI 4.1 Sec. 6. Minnesota Statutes 2024, section 296A.061, is amended to read:
97	97	4.2 296A.061 CANCELLATION OR NONRENEWAL OF LICENSES.
98	98	4.3 The commissioner may cancel a license or not renew a license if one of the following
99	99	4.4conditions occurs:
100	100	4.5 (1) the license holder has not filed a petroleum tax return or report for at least one year;
101	101	4.6 (2) the license holder has not reported any petroleum tax liability on the license holder's
102	102	4.7returns or reports for at least one year; or
103	103	4.8 (3) the license holder requests cancellation of the license.
104	104	4.9 Sec. 7. Minnesota Statutes 2024, section 296A.12, is amended to read:
105	105	4.10 296A.12 GASOLINE AND OR SPECIAL FUEL TAX IN LIEU OF OTHER TAXES
106	106	4.11PROHIBITED.
107	107	4.12 Gasoline and special fuel excise taxes shall must not be in lieu of all other taxes imposed
108	108	4.13upon the business of selling or dealing in gasoline or special fuel, whether imposed by the
109	109	4.14state or by any of its political subdivisions, but are in addition to all ad valorem taxes now
110	110	4.15imposed by law. Nothing in this chapter is construed as prohibiting the governing body of
111	111	4.16any city of this state from licensing and regulating such business where its authority is
112	112	4.17conferred by state law or city charter.
113	113	4.18 Sec. 8. Minnesota Statutes 2024, section 296A.15, is amended to read:
114	114	4.19 296A.15 PAYMENT OF TAX REPORTS REQUIRED.
115	115	4.20 Subdivision 1.Monthly gasoline report; shrinkage allowance.(a) Except as provided
116	116	4.21in paragraph (e), On or before the 23rd day of each month, every person who is required to
117	117	4.22pay a gasoline tax shall engaged in buying and selling petroleum products or combustible
118	118	4.23gases regulated under this chapter must file with the commissioner a report, in the form and
119	119	4.24manner prescribed by the commissioner, showing the number of gallons of petroleum
120	120	4.25products received by the reporter during the preceding calendar month, and other information
121	121	4.26the commissioner may require. A written report is deemed to have been filed as required
122	122	4.27in this subdivision if postmarked on or before the 23rd day of the month in which the tax
123	123	4.28is payable.
124	124	4.29 (b) The number of gallons of gasoline must be reported in United States standard liquid
125	125	4.30gallons, 231 cubic inches, except that the commissioner may upon written application and
126	126	4.31for cause shown permit the distributor to report the number of gallons of gasoline as corrected
127	127	4Article 1 Sec. 8.
128	128	25-02126 as introduced01/22/25 REVISOR KRB/MI 5.1to a temperature of 60-degrees Fahrenheit. If the application is granted, all gasoline covered
129	129	5.2in the application and allowed by the commissioner must continue to be reported by the
130	130	5.3distributor on the adjusted basis for a period of one year from the date of the granting of
131	131	5.4the application. The number of gallons of petroleum products other than gasoline must be
132	132	5.5reported as originally invoiced. Each report must show separately the number of gallons of
133	133	5.6aviation gasoline received by the reporter during each calendar month and the number of
134	134	5.7gallons of gasoline sold to a dealer of aviation gasoline during each calendar month.
135	135	5.8 (c) Each report must also include the amount of gasoline tax on gasoline received by
136	136	5.9the reporter during the preceding month. In computing the tax a deduction of 2.5 percent
137	137	5.10of the quantity of gasoline received by a distributor shall be made for evaporation and loss.
138	138	5.11At the time of reporting, the reporter shall submit satisfactory evidence that one-third of the
139	139	5.122.5 percent deduction has been credited or paid to dealers on quantities sold to them.
140	140	5.13 (d) Each report shall contain a confession of judgment for the amount of the tax shown
141	141	5.14due to the extent not timely paid.
142	142	5.15 (e) Under certain circumstances and with the approval of the commissioner, taxpayers
143	143	5.16may be allowed to file reports annually.
144	144	5.17 Subd. 2.Petroleum tank release cleanup fee.Persons required to pay a petroleum tank
145	145	5.18release cleanup fee under section 115C.08, subdivision 3, must file a report with the
146	146	5.19commissioner of revenue. Each report must include the amount of fees due on petroleum
147	147	5.20products. Reports must be filed in the form and manner prescribed by the commissioner. A
148	148	5.21written report is considered filed as required if postmarked on or before the 23rd day of the
149	149	5.22month in which the fee is payable.
150	150	5.23 Subd. 3.Monthly special fuel report; shrinkage allowance.On or before the 23rd day
151	151	5.24of each month, distributors, special fuel dealers, and bulk purchasers shall file a report in
152	152	5.25the form and manner prescribed by the commissioner. Reports shall contain information as
153	153	5.26follows:
154	154	5.27 (a) Distributors of undyed diesel fuel and undyed kerosene must file a monthly tax return
155	155	5.28report with the commissioner listing all purchases or receipts of undyed diesel fuel and
156	156	5.29undyed kerosene. Distributors may be allowed to take a credit or credits under section
157	157	5.30296A.16, subdivision 1.
158	158	5.31 (b) Distributors and dealers of special fuel other than undyed diesel fuel or undyed
159	159	5.32kerosene shall report the total number of gallons delivered to them during the preceding
160	160	5.33calendar month and shall pay the special fuel excise tax due to the commissioner. The
161	161	5Article 1 Sec. 8.
162	162	25-02126 as introduced01/22/25 REVISOR KRB/MI 6.1invoice must show the true and correct name and address of the purchaser, and the purchaser's
163	163	6.2signature. The report shall contain other information as the commissioner may require.
164	164	6.3 (c) Distributors and dealers of special fuel other than undyed diesel fuel or undyed
165	165	6.4kerosene must pay the special fuel excise tax on all special fuel delivered or sold into the
166	166	6.5supply tank of an aircraft or licensed motor vehicle and shall file a report with the
167	167	6.6commissioner. The report shall show the total number of gallons delivered or sold into the
168	168	6.7supply tank of an aircraft or licensed motor vehicle during the preceding calendar month
169	169	6.8and the special fuel excise tax due shall be paid to the commissioner. Any person delivering
170	170	6.9special fuel on which the excise tax has not previously been paid into the supply tank of an
171	171	6.10aircraft or a licensed motor vehicle shall report such delivery and shall pay or collect and
172	172	6.11pay to the commissioner the excise tax on the special fuel so delivered.
173	173	6.12 (d) Distributors and special fuel dealers may, subject to the approval of the commissioner,
174	174	6.13elect to pay to the commissioner the special fuel excise tax report on all special fuel delivered
175	175	6.14or sold into the supply tank of an aircraft or licensed motor vehicle. Under this option, an
176	176	6.15invoice must be issued at the time of each delivery showing the name and address of the
177	177	6.16purchaser, date of sale, number of gallons, price per gallon, and total amount of sale. A
178	178	6.17separate sales ticket book shall be maintained for special fuel sales. The tax is also imposed
179	179	6.18on all special fuel held in storage on the effective date of this election.
180	180	6.19 (e) Bulk purchasers shall report and pay the special fuel excise tax on all special fuel,
181	181	6.20including alternative fuels, except undyed diesel fuel or undyed kerosene purchased by them
182	182	6.21for storage during the preceding calendar month. In such cases as the commissioner may
183	183	6.22permit, credit for the excise tax due or previously paid on special fuel not used in aircraft
184	184	6.23or licensed motor vehicles may be allowed in computing tax liability. The report shall
185	185	6.24contain other information as the commissioner may require.
186	186	6.25 (f) In computing the special fuel excise tax due, a deduction of one percent of the quantity
187	187	6.26of special fuel on which tax is due shall be made for evaporation and loss.
188	188	6.27 (g) Each report shall contain a confession of judgment for the amount of the tax shown
189	189	6.28due to the extent not timely paid.
190	190	6.29 Subd. 4.Failure to use or sell for intended purpose; report required.(a) Any person
191	191	6.30who buys aviation gasoline, including from a dealer of aviation gasoline, or special fuel for
192	192	6.31aircraft use, and who has paid the excise taxes due directly or indirectly through the amount
193	193	6.32of the tax being included in the price, or otherwise, and uses said gasoline or special fuel
194	194	6.33in motor vehicles or knowingly sells it to any person for use in motor vehicles shall, on or
195	195	6.34before the 23rd day of the month following that in which such gasoline or special fuel was
196	196	6Article 1 Sec. 8.
197	197	25-02126 as introduced01/22/25 REVISOR KRB/MI 7.1so used or sold, report the fact of the use or sale to the commissioner in the form and manner
198	198	7.2prescribed by the commissioner.
199	199	7.3 (b) Any person who buys gasoline and who has paid the motor vehicle gasoline excise
200	200	7.4tax directly or indirectly through the amount of the tax being included in the price of the
201	201	7.5gasoline, or otherwise, who knowingly sells such gasoline to any person to be used for the
202	202	7.6purpose of producing or generating power for propelling aircraft, or who receives, stores,
203	203	7.7or withdraws from storage gasoline to be used for that purpose, shall, on or before the 23rd
204	204	7.8day of the month following that in which such gasoline was so sold, stored, or withdrawn
205	205	7.9from storage, report the fact of the sale, storage, or withdrawal from storage to the
206	206	7.10commissioner in the form and manner prescribed by the commissioner.
207	207	7.11 Subd. 5.On-farm bulk storage of gasoline or special fuel; ethanol for personal
208	208	7.12use.Notwithstanding the provisions of this chapter, a farmer who uses gasoline or any
209	209	7.13special fuel on which a tax has not been paid shall report and pay the tax on all gasoline or
210	210	7.14special fuel delivered into the supply tank of a licensed motor vehicle during the preceding
211	211	7.15calendar year. The tax must be reported and paid in the form and manner prescribed by the
212	212	7.16commissioner together with any refund claim filed by the taxpayer under section 296A.16.
213	213	7.17If no refund claim is filed, the tax must be reported and paid annually by March 15 or more
214	214	7.18frequently, as the commissioner may prescribe. Any producer qualifying under this
215	215	7.19subdivision is exempt from the licensing requirements in section 296A.03, subdivision 1.
216	216	7.20 Subd. 6.Inspection fee.Persons required to pay an inspection fee under section 239.101
217	217	7.21must file a report with the commissioner of revenue. Each report must include the amount
218	218	7.22of inspection fees due on petroleum products. Reports must be filed in the form and manner
219	219	7.23prescribed by the commissioner. A written report is considered filed as required if postmarked
220	220	7.24on or before the 23rd day of the month in which the fee is payable.
221	221	7.25 Subd. 7.Electronic payment required.All remittances must be made by electronic
222	222	7.26means.
223	223	7.27 Subd. 8.Electronically filed return or report; signature.The commissioner may
224	224	7.28require that returns or reports be filed electronically. For purposes of this chapter, the name
225	225	7.29of the taxpayer reporter, the name of the taxpayer's reporter's authorized agent, or the
226	226	7.30taxpayer's reporter's identification number constitutes a signature when transmitted as part
227	227	7.31of the information on returns or reports filed by electronic means by the taxpayer reporter
228	228	7.32or at the taxpayer's reporter's direction. "Electronic means" includes, but is not limited to,
229	229	7.33the use of a touch-tone telephone to transmit return or report information in a manner
230	230	7.34prescribed by the commissioner.
231	231	7Article 1 Sec. 8.
232	232	25-02126 as introduced01/22/25 REVISOR KRB/MI 8.1 Sec. 9. Minnesota Statutes 2024, section 296A.21, is amended to read:
233	233	8.2 296A.21 STATUTE OF LIMITATIONS.
234	234	8.3 Subdivision 1.General rules.(a) The commissioner shall make determinations,
235	235	8.4corrections, assessments, and refunds with respect to taxes imposed before the effective
236	236	8.5date of this section and fees under this chapter, including interest, additions to taxes, and
237	237	8.6assessable penalties. Except as otherwise provided in this section, the amount of taxes
238	238	8.7assessable must be assessed within 3-1/2 years after the date the return is filed. For purposes
239	239	8.8of this section, a tax return filed before the last day prescribed by law for filing is considered
240	240	8.9to be filed on the last day.
241	241	8.10 (b) A claim for a refund of an overpayment of state tax imposed before the effective
242	242	8.11date of this section or fees must be filed within 3-1/2 years from the date prescribed for
243	243	8.12filing the return, plus any extension of time granted for filing the return, but only if filed
244	244	8.13within the extended time; or the claim must be filed within one year from the date of an
245	245	8.14order assessing tax or fees, or from the date of a return filed by the commissioner, upon
246	246	8.15payment in full of the tax, fees, penalties, and interest shown on the order or return, whichever
247	247	8.16period expires later.
248	248	8.17 Subd. 2.Collection.No action shall be brought for the collection of delinquent taxes
249	249	8.18imposed before the effective date of this section and fees under section 270C.61 unless
250	250	8.19commenced within five years after the date of assessment of the taxes and fees.
251	251	8.20 Subd. 3.False or fraudulent report.In the case of a false or fraudulent report with
252	252	8.21intent to evade taxes or fees or of a failure to file a report, the taxes imposed before the
253	253	8.22effective date of this section or fees may be assessed at any time, and a proceeding in court
254	254	8.23for their collection must be begun within five years after the assessment.
255	255	8.24 Subd. 4.Time limit for certain refunds.Notwithstanding subdivision 1, paragraph (b),
256	256	8.25no refund under Minnesota Statutes 2024, section 296A.16, subdivision 2, shall be made
257	257	8.26unless the claim for refund and invoice are filed with the commissioner within one year
258	258	8.27from the date of purchase.
259	259	8.28 Subd. 5.Suspension of time; bankruptcy.The period of time during which a tax
260	260	8.29imposed before the effective date of this section or fee must be assessed under this chapter
261	261	8.30or collection proceedings commenced under subdivision 2 or 3 is suspended during the
262	262	8.31period from the date of filing of a petition in bankruptcy until 30 days after the commissioner
263	263	8.32of revenue receives notice that the bankruptcy proceedings have been closed or dismissed
264	264	8.33or the automatic stay has been terminated or has expired. The suspension of the statute of
265	265	8.34limitations under this subdivision applies to the person against whom the petition in
266	266	8Article 1 Sec. 9.
267	267	25-02126 as introduced01/22/25 REVISOR KRB/MI 9.1bankruptcy is filed and all other persons who may also be wholly or partially liable for the
268	268	9.2tax under this chapter imposed before the effective date of this section.
269	269	9.3 Sec. 10. Minnesota Statutes 2024, section 296A.22, subdivision 1, is amended to read:
270	270	9.4 Subdivision 1.Penalty for failure to pay tax, general rule.Upon the failure of any
271	271	9.5person to pay any tax imposed before the effective date of this section or fee when due, a
272	272	9.6penalty of one percent per day for the first ten days of delinquency shall accrue, and thereafter
273	273	9.7the tax, fees, and penalty shall bear interest at the rate specified in section 270C.40 until
274	274	9.8paid.
275	275	9.9 Sec. 11. Minnesota Statutes 2024, section 296A.22, subdivision 2, is amended to read:
276	276	9.10 Subd. 2.Collection authority.Upon such a failure to pay any tax imposed before the
277	277	9.11effective date of this section or fees within the time provided by this chapter, all taxes and
278	278	9.12fees imposed by this chapter shall become immediately due and payable, and may be
279	279	9.13collected as provided in chapter 270C.
280	280	9.14 Sec. 12. Minnesota Statutes 2024, section 296A.22, subdivision 3, is amended to read:
281	281	9.15 Subd. 3.Operating without license.If any person operates as a distributor, special fuel
282	282	9.16dealer, bulk purchaser, or motor carrier without first securing the license required under
283	283	9.17this chapter, any tax imposed before the effective date of this section or fee imposed by this
284	284	9.18chapter shall become immediately due and payable. A penalty of 25 percent is imposed
285	285	9.19upon the tax and fee due. The tax and fees shall bear interest at the rate specified in section
286	286	9.20270C.40. The penalty imposed in this subdivision shall bear interest from the date provided
287	287	9.21in section 270C.40, subdivision 3, to the date of payment of the penalty.
288	288	9.22 Sec. 13. Minnesota Statutes 2024, section 296A.22, subdivision 6, is amended to read:
289	289	9.23 Subd. 6.Sale prohibited under certain conditions.No petroleum product shall be
290	290	9.24unloaded or sold by any person or distributor whose tax imposed before the effective date
291	291	9.25of this section and fees are the basis for collection action under subdivision 2.
292	292	9.26 Sec. 14. Minnesota Statutes 2024, section 296A.22, subdivision 7, is amended to read:
293	293	9.27 Subd. 7.Payment of penalties.The penalties imposed by this section are collected and
294	294	9.28paid in the same manner as taxes fees.
295	295	9Article 1 Sec. 14.
296	296	25-02126 as introduced01/22/25 REVISOR KRB/MI 10.1 Sec. 15. Minnesota Statutes 2024, section 296A.22, subdivision 9, is amended to read:
297	297	10.2 Subd. 9.Abatement of penalty.(a) The commissioner may by written order abate any
298	298	10.3penalty imposed under this section, if in the commissioner's opinion there is reasonable
299	299	10.4cause to do so.
300	300	10.5 (b) A request for abatement of penalty must be filed with the commissioner within 60
301	301	10.6days of the notice date of the penalty. For purposes of this section, "notice date" means the
302	302	10.7notice date designated by the commissioner on the order or other notice that a penalty has
303	303	10.8been imposed.
304	304	10.9 (c) If the commissioner issues an order denying a request for abatement of penalty, the
305	305	10.10taxpayer requester may file an administrative appeal as provided in section 270C.35 or
306	306	10.11appeal to Tax Court as provided in section 271.06. If the commissioner does not issue an
307	307	10.12order on the abatement request within 60 days from the date the request is received, the
308	308	10.13taxpayer requester may appeal to Tax Court as provided in section 271.06.
309	309	10.14Sec. 16. Minnesota Statutes 2024, section 296A.23, subdivision 2, is amended to read:
310	310	10.15 Subd. 2.Willful evasion.A person who willfully attempts in any manner to evade or
311	311	10.16defeat any tax imposed by this chapter before the effective date of this section, including,
312	312	10.17but not limited to, making and subscribing any false statement in any report, record, claim,
313	313	10.18or sales ticket required by this chapter; or making a false claim for a refund under Minnesota
314	314	10.19Statutes 2024, section 296A.16, subdivision 2, is guilty of a felony.
315	315	10.20Sec. 17. Minnesota Statutes 2024, section 296A.23, subdivision 8, is amended to read:
316	316	10.21 Subd. 8.Certain blending of gasoline prohibited permitted.The blending of gasoline
317	317	10.22on which the tax has been paid or the liability accrued, with any substance on which the tax
318	318	10.23has not been paid or the liability thereafter accrued, is prohibited.
319	319	10.24 This section does not preclude The addition of any of the various inhibitors which that
320	320	10.25in total do not exceed one-half of one percent by volume of the product treated, nor is
321	321	10.26permitted. The addition to fuel for two-cycle gasoline engines of a lubricant not exceeding
322	322	10.27five percent by volume or of the product treated; nor does this subdivision preclude the
323	323	10.28addition of is permitted. Fuel oil added to gasoline for the purpose of generating power for
324	324	10.29the propulsion of farm tractors is permitted.
325	325	10Article 1 Sec. 17.
326	326	25-02126 as introduced01/22/25 REVISOR KRB/MI 11.1 Sec. 18. Minnesota Statutes 2024, section 296A.24, subdivision 1, is amended to read:
327	327	11.2 Subdivision 1.Seizure.The commissioner or authorized agents may seize gasoline or
328	328	11.3special fuel being transported for delivery in violation of section 296A.03, subdivision 1,
329	329	11.4and any vehicle or other method of conveyance used for transporting the gasoline or special
330	330	11.5fuel. Any untaxed motor vehicle fuel that is received by a person other than a licensee is
331	331	11.6subject to seizure along with the vehicle or other means of transportation used to transport
332	332	11.7the motor vehicle fuel. Any motor vehicle fuel, along with the transporting vehicle, brought
333	333	11.8into the state of Minnesota by a transporter for use, distribution, storage, or sale that is not
334	334	11.9supported by a manifest, bill of lading, or invoice, reflecting the licensed distributor
335	335	11.10responsible for the tax and/or fees is subject to seizure by the Minnesota Department of
336	336	11.11Revenue. Property seized under this subdivision is subject to forfeiture as provided in
337	337	11.12subdivision 2.
338	338	11.13Sec. 19. TRANSFERS.
339	339	11.14 The commissioner of management and budget must transfer $911,485,000 in fiscal year
340	340	11.152026 and $905,105,000 in fiscal year 2027 from the general fund to the highway user tax
341	341	11.16distribution fund. The base for this transfer is $898,769,000 in fiscal year 2028 and
342	342	11.17$892,478,000 in fiscal year 2029.
343	343	11.18Sec. 20. REPEALER.
344	344	11.19 Minnesota Statutes 2024, sections 296A.01, subdivision 36; 296A.07; 296A.08;
345	345	11.20296A.083; 296A.09; 296A.10; 296A.11; 296A.13; 296A.14; 296A.16, subdivisions 1, 2,
346	346	11.213, 4, 4a, 4b, 5, 7, and 8; 296A.17; 296A.18, subdivisions 1, 2, 3, 4, 5, 6, 6a, 7, and 8; 296A.22,
347	347	11.22subdivision 4; 296A.23, subdivisions 3, 4, and 6; and 296A.26, are repealed.
348	348	11.23 ARTICLE 2
349	349	11.24 CONFORMING CHANGES
350	350	11.25Section 1. Minnesota Statutes 2024, section 84.794, subdivision 1, is amended to read:
351	351	11.26 Subdivision 1.Registration revenue.Fees from the registration of off-highway
352	352	11.27motorcycles and the unrefunded gasoline tax attributable to off-highway motorcycle use
353	353	11.28under section 296A.18 must be deposited in the state treasury and credited to the off-highway
354	354	11.29motorcycle account in the natural resources fund.
355	355	11Article 2 Section 1.
356	356	25-02126 as introduced01/22/25 REVISOR KRB/MI 12.1 Sec. 2. Minnesota Statutes 2024, section 84.803, subdivision 1, is amended to read:
357	357	12.2 Subdivision 1.Registration revenue.Fees from the registration of off-road vehicles
358	358	12.3and unrefunded gasoline tax attributable to off-road vehicle use under section 296A.18 must
359	359	12.4be deposited in the state treasury and credited to the off-road vehicle account in the natural
360	360	12.5resources fund.
361	361	12.6 Sec. 3. Minnesota Statutes 2024, section 84.83, subdivision 2, is amended to read:
362	362	12.7 Subd. 2.Money deposited in account.Fees from the registration of snowmobiles and
363	363	12.8from the issuance of snowmobile state trail passes and the unrefunded gasoline tax
364	364	12.9attributable to snowmobile use pursuant to section 296A.18 shall must be deposited in the
365	365	12.10state treasury and credited to the snowmobile trails and enforcement account.
366	366	12.11Sec. 4. Minnesota Statutes 2024, section 84.927, subdivision 1, is amended to read:
367	367	12.12 Subdivision 1.Registration revenue.Fees from the registration of all-terrain vehicles
368	368	12.13and the unrefunded gasoline tax attributable to all-terrain vehicle use under section 296A.18,
369	369	12.14as well as the net proceeds from the sale of all-terrain vehicles forfeited pursuant to section
370	370	12.15169A.63, shall must be deposited in the state treasury and credited to the all-terrain vehicle
371	371	12.16account in the natural resources fund.
372	372	12.17Sec. 5. Minnesota Statutes 2024, section 86B.706, subdivision 2, is amended to read:
373	373	12.18 Subd. 2.Money deposited in account.The following shall be deposited in the state
374	374	12.19treasury and credited to the water recreation account:
375	375	12.20 (1) fees from titling and licensing of watercraft under this chapter;
376	376	12.21 (2) fines, installment payments, and forfeited bail according to section 86B.705,
377	377	12.22subdivision 2;
378	378	12.23 (3) mooring fees and receipts from the sale of marine gas at state-operated or state-assisted
379	379	12.24small craft harbors and mooring facilities according to section 86A.21; and
380	380	12.25 (4) the unrefunded gasoline tax attributable to watercraft use under section 296A.18;
381	381	12.26and
382	382	12.27 (5) (4) fees for permits issued to control or harvest aquatic plants other than wild rice
383	383	12.28under section 103G.615, subdivision 2.
384	384	12Article 2 Sec. 5.
385	385	25-02126 as introduced01/22/25 REVISOR KRB/MI 13.1 Sec. 6. Minnesota Statutes 2024, section 86B.706, subdivision 3, is amended to read:
386	386	13.2 Subd. 3.Purposes.The money in the account may be expended only as appropriated
387	387	13.3by law for the following purposes:
388	388	13.4 (1) as directed under section 296A.18, subdivision 2, for acquisition, development,
389	389	13.5maintenance, and rehabilitation of public water access and boating facilities on public waters;
390	390	13.6lake and river improvements; and boat and water safety;
391	391	13.7 (2) from the fees collected at state-operated or state-assisted small craft harbors and
392	392	13.8mooring facilities from daily and seasonal moorings and the sale of marine gas, for
393	393	13.9maintenance, operation, replacement, and expansion of these facilities and for the debt
394	394	13.10service on state bonds sold to finance these facilities;
395	395	13.11 (3) for administration and enforcement of this chapter as it pertains to titling and licensing
396	396	13.12of watercraft and use and safe operation of watercraft; grants for county-sponsored and
397	397	13.13administered boat and water safety programs; and state boat and water safety efforts;
398	398	13.14 (4) for management of aquatic invasive species and the implementation of chapter 84D
399	399	13.15as it pertains to aquatic invasive species, including control, public awareness, law
400	400	13.16enforcement, assessment and monitoring, management planning, and research; and
401	401	13.17 (5) for management of aquatic plants and the implementation of section 103G.615 as it
402	402	13.18pertains to aquatic plants, including plant removal permitting, control, public awareness,
403	403	13.19law enforcement, assessment and monitoring, management planning, and research.
404	404	13.20Sec. 7. Minnesota Statutes 2024, section 89.70, is amended to read:
405	405	13.21 89.70 STATE FOREST ROAD ACCOUNT.
406	406	13.22 There is created in the state treasury a state forest road account in the special revenue
407	407	13.23fund, consisting of money credited under section 296A.18, subdivision 7. Money in the
408	408	13.24state forest road account is appropriated to the commissioner and remains available until
409	409	13.25expended for:
410	410	13.26 (1) acquisition, development, maintenance, and administration of state forest roads under
411	411	13.27the jurisdiction of the commissioner of natural resources; and
412	412	13.28 (2) the commissioner's share of the cost of cooperative maintenance agreements made
413	413	13.29with other providers of forest roads.
414	414	13Article 2 Sec. 7.
415	415	25-02126 as introduced01/22/25 REVISOR KRB/MI 14.1 Sec. 8. Minnesota Statutes 2024, section 89.72, is amended to read:
416	416	14.2 89.72 COUNTY FOREST ACCESS ROAD ACCOUNT.
417	417	14.3 There is created in the state treasury a county forest access road account in the special
418	418	14.4revenue fund, consisting of money credited under section 296A.18, subdivision 7. Money
419	419	14.5in the county forest access road account is appropriated to the commissioner for distribution
420	420	14.6to counties managing forest lands administered through a county land department under the
421	421	14.7jurisdiction of a land commissioner appointed under section 282.13. The payments must be
422	422	14.8made by July 15 and January 15 of each year through the commissioner and in proportion
423	423	14.9to each county's ownership of commercial forest lands, for purposes of constructing,
424	424	14.10reconstructing, acquiring, and maintaining county management access roads, including the
425	425	14.11acquisition of rights-of-way or easements as may be needed.
426	426	14.12Sec. 9. Minnesota Statutes 2024, section 115C.08, subdivision 3, is amended to read:
427	427	14.13 Subd. 3.Petroleum tank release cleanup fee.A petroleum tank release cleanup fee is
428	428	14.14imposed on the use of tanks that contain petroleum products defined in section 296A.01.
429	429	14.15On products other than gasoline, the fee must be paid in the manner provided in section
430	430	14.16296A.15 by the first licensed distributor receiving the product in Minnesota, as defined in
431	431	14.17section 296A.01. When the product is gasoline, the distributor responsible for payment of
432	432	14.18the gasoline tax imposed before the effective date of this section is also responsible for
433	433	14.19payment of the petroleum tank cleanup fee. The fee must be imposed as required under
434	434	14.20subdivision 2, at a rate of $20 per 1,000 gallons of petroleum products, rounded to the
435	435	14.21nearest 1,000 gallons. A distributor who fails to pay the fee imposed under this section is
436	436	14.22subject to the penalties provided in section 296A.22.
437	437	14.23Sec. 10. Minnesota Statutes 2024, section 297A.68, subdivision 19, is amended to read:
438	438	14.24 Subd. 19.Petroleum products.The following Petroleum products regulated under
439	439	14.25chapter 296A are exempt:.
440	440	14.26 (1) products upon which a tax has been imposed and paid under chapter 296A, and for
441	441	14.27which no refund has been or will be allowed because the buyer used the fuel for nonhighway
442	442	14.28use;
443	443	14.29 (2) products that are used in the improvement of agricultural land by constructing,
444	444	14.30maintaining, and repairing drainage ditches, tile drainage systems, grass waterways, water
445	445	14.31impoundment, and other erosion control structures;
446	446	14Article 2 Sec. 10.
447	447	25-02126 as introduced01/22/25 REVISOR KRB/MI 15.1 (3) products purchased by a transit system receiving financial assistance under section
448	448	15.2174.24, 256B.0625, subdivision 17, or 473.384;
449	449	15.3 (4) products purchased by an ambulance service licensed under chapter 144E;
450	450	15.4 (5) products used in a passenger snowmobile, as defined in section 296A.01, subdivision
451	451	15.539, for off-highway business use as part of the operations of a resort as provided under
452	452	15.6section 296A.16, subdivision 2, clause (2);
453	453	15.7 (6) products purchased by a state or a political subdivision of a state for use in motor
454	454	15.8vehicles exempt from registration under section 168.012, subdivision 1, paragraph (b);
455	455	15.9 (7) products purchased by providers of transportation to recipients of medical assistance
456	456	15.10home and community-based services waivers enrolled in day programs, including adult day
457	457	15.11care, family adult day care, day treatment and habilitation, prevocational services, and
458	458	15.12structured day services;
459	459	15.13 (8) products used in a motor vehicle used exclusively as a mobile medical unit for the
460	460	15.14provision of medical or dental services by a federally qualified health center, as defined
461	461	15.15under title 19 of the federal Social Security Act, as amended by section 4161 of the Omnibus
462	462	15.16Budget Reconciliation Act of 1990; or
463	463	15.17 (9) special fuel used for one of the following purposes:
464	464	15.18 (i) to power a refrigeration unit mounted on a licensed motor vehicle, provided that the
465	465	15.19unit has an engine separate from the one used to propel the vehicle and the fuel is used
466	466	15.20exclusively for the unit;
467	467	15.21 (ii) to power an unlicensed motor vehicle that is used solely or primarily to move
468	468	15.22semitrailers within a cargo yard, warehouse facility, or intermodal facility; or
469	469	15.23 (iii) to operate a power take-off unit or auxiliary engine in or on a licensed motor vehicle,
470	470	15.24whether or not the unit or engine is fueled from the same or a different fuel tank as that
471	471	15.25from which the motor vehicle is fueled.
472	472	15Article 2 Sec. 10.
473	473	25-02126 as introduced01/22/25 REVISOR KRB/MI Page.Ln 1.15MOTOR FUEL TAXES ABOLISHED..................................................ARTICLE 1
474	474	Page.Ln 11.23CONFORMING CHANGES.................................................................ARTICLE 2
475	475	1
476	476	APPENDIX
477	477	Article locations for 25-02126 296A.01 DEFINITIONS.
478	478	Subd. 36.Motor vehicle gasoline excise tax."Motor vehicle gasoline excise tax" means the
479	479	tax imposed on gasoline used in producing and generating power for propelling motor vehicles
480	480	used on the public highways of this state.
481	481	296A.07 GASOLINE TAX.
482	482	Subdivision 1.Tax imposed.There is imposed an excise tax on gasoline, gasoline blended with
483	483	ethanol, and agricultural alcohol gasoline used in producing and generating power for propelling
484	484	motor vehicles used on the public highways of this state. The tax is imposed on the first licensed
485	485	distributor who received the product in Minnesota. For purposes of this section, gasoline is defined
486	486	in section 296A.01, subdivisions 8b, 10, 18, 20, 23, 24, 25, 32, and 34. The tax is payable at the
487	487	time and in the form and manner prescribed by the commissioner. The tax is payable at the rates
488	488	specified in subdivision 3, subject to the exceptions and reductions specified in section 296A.17.
489	489	Subd. 2.Tax imposed for marine use.Subject to the provisions of section 296A.16, subdivision
490	490	2, there is imposed an excise tax, at the same rate per gallon as the gasoline excise tax, on all marine
491	491	gasoline received, sold, stored, or withdrawn from storage in this state. This tax is payable at the
492	492	times, in the manner, and by persons specified in this chapter.
493	493	Subd. 3.Rate of tax.(a) Subject to paragraph (b), the gasoline excise tax is imposed at the
494	494	following rates:
495	495	(1) E85 is taxed at the rate of 17.75 cents per gallon;
496	496	(2) M85 is taxed at the rate of 14.25 cents per gallon; and
497	497	(3) all other gasoline is taxed at the rate of 25 cents per gallon.
498	498	(b) Annually on August 1, the commissioner must determine the tax rate applicable to the sale
499	499	of E85, M85, and all other gasoline subject to tax under this section for the upcoming 12-month
500	500	period beginning on January 1. The adjusted rate must equal the current rate, multiplied by one
501	501	plus the percentage increase, if any, in the Minnesota Highway Construction Cost Index for the
502	502	reference year. The tax rate must be rounded to the nearest tenth of a cent. Each of the tax rates for
503	503	E85, M85, and all other gasoline must not be lower than the respective rates specified in paragraph
504	504	(a). Beginning with the calculation on August 1, 2025, the percentage change in each of the tax
505	505	rates for E85, M85, and all other gasoline as a result of the requirements under this paragraph must
506	506	not exceed three percent.
507	507	(c) For purposes of this subdivision:
508	508	(1) the Minnesota Highway Construction Cost Index is as determined by the commissioner of
509	509	transportation; and
510	510	(2) "reference year" means the 12-month period ending on June 30 two years prior to the year
511	511	in which the calculation is made.
512	512	Subd. 4.Exemptions.The provisions of subdivision 1 do not apply to gasoline or denatured
513	513	ethanol purchased by:
514	514	(1) a transit system or transit provider receiving financial assistance or reimbursement under
515	515	section 174.24, 256B.0625, subdivision 17, or 473.384;
516	516	(2) providers of transportation to recipients of medical assistance home and community-based
517	517	services waivers enrolled in day programs, including adult day care, family adult day care, day
518	518	treatment and habilitation, prevocational services, and structured day services;
519	519	(3) an ambulance service licensed under chapter 144E;
520	520	(4) providers of medical or dental services by a federally qualified health center, as defined
521	521	under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget
522	522	Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile medical unit;
523	523	(5) a licensed distributor to be delivered to a terminal for use in blending; or
524	524	(6) a dealer of aviation gasoline, but only to the extent that the gasoline is intended to be
525	525	dispensed directly into the fuel tank of an aircraft.
526	526	1R
527	527	APPENDIX
528	528	Repealed Minnesota Statutes: 25-02126 296A.08 SPECIAL FUEL TAX.
529	529	Subdivision 1.Tax imposed.(a) There is imposed an excise tax on all special fuel at the rates
530	530	specified in subdivision 2. For purposes of this section, "owner or operator" means the operation
531	531	of licensed motor vehicles, whether loaded or empty, whether for compensation or not for
532	532	compensation, and whether owned by or leased to the motor carrier who operates them or causes
533	533	them to be operated.
534	534	(b) For undyed diesel fuel and undyed kerosene, the tax is imposed on the first licensed distributor
535	535	who received the product in Minnesota.
536	536	(c) For dyed fuel being used illegally in a licensed motor vehicle, the tax is imposed on the
537	537	owner or operator of the motor vehicle.
538	538	(d) For dyed fuel used in a motor vehicle but subject to a federal exemption, although no federal
539	539	tax may be imposed, the owner or operator of the vehicle is liable for the state tax.
540	540	(e) For other fuels, including jet fuel, propane, and compressed natural gas, the tax is imposed
541	541	on the distributor, special fuel dealer, or bulk purchaser.
542	542	(f) Any person delivering special fuel on which the excise tax has not previously been paid,
543	543	into the supply tank of an aircraft or a licensed motor vehicle shall report such delivery and shall
544	544	pay, or collect and pay the excise tax on the special fuel so delivered to the commissioner.
545	545	Subd. 2.Rate of tax.(a) Subject to paragraph (b), the special fuel excise tax is imposed at the
546	546	following rates:
547	547	(1) liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon;
548	548	(2) liquefied natural gas is taxed at the rate of 15 cents per gallon;
549	549	(3) compressed natural gas is taxed at the rate of $1.974 per thousand cubic feet or 25 cents per
550	550	gasoline equivalent; and
551	551	(4) all other special fuel is taxed at the same rate as the gasoline excise tax as specified in section
552	552	296A.07, subdivision 2.
553	553	(b) Annually on August 1, the commissioner must determine the tax rate applicable to the sale
554	554	of E85, M85, and all other gasoline subject to tax under this section for the upcoming 12-month
555	555	period beginning on January 1. The rate must be adjusted as provided in section 296A.07, subdivision
556	556	3, paragraph (b). The tax rate must be rounded to the nearest tenth of a cent. Each of the tax rates
557	557	for liquefied natural gas or propane, liquefied natural gas, compressed natural gas, and all other
558	558	special fuel must not be lower than the respective rates specified in paragraph (a).
559	559	(c) The tax is payable in the form and manner prescribed by the commissioner.
560	560	(d) For purposes of this subdivision, "gasoline equivalent," as defined by the National Conference
561	561	on Weights and Measures, is 5.66 pounds of natural gas or 126.67 cubic feet.
562	562	Subd. 3.Exemptions.The provisions of subdivisions 1 and 2 do not apply to special fuel or
563	563	alternative fuels purchased by:
564	564	(1) a transit system or transit provider receiving financial assistance or reimbursement under
565	565	section 174.24, 256B.0625, subdivision 17, or 473.384;
566	566	(2) providers of transportation to recipients of medical assistance home and community-based
567	567	services waivers enrolled in day programs, including adult day care, family adult day care, day
568	568	treatment and habilitation, prevocational services, and structured day services;
569	569	(3) an ambulance service licensed under chapter 144E;
570	570	(4) providers of medical or dental services by a federally qualified health center, as defined
571	571	under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget
572	572	Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile medical unit; or
573	573	(5) a licensed distributor to be delivered to a terminal for use in blending.
574	574	Subd. 4.Tax imposed on use.If it is determined by the commissioner from an examination of
575	575	any records pertaining to the operation of any licensed motor vehicle which uses special fuel, that
576	576	the special fuel tax on the special fuel used in this state has not been paid to this state, or to any
577	577	other state if purchased in such other state, there is hereby imposed an excise tax at the same rate
578	578	per gallon as the gasoline tax, on all such special fuel. All assessments of tax made under this
579	579	2R
580	580	APPENDIX
581	581	Repealed Minnesota Statutes: 25-02126 subdivision shall be paid by the user to the commissioner upon demand. For purposes of this
582	582	subdivision, "special fuel" means any fuel other than gasoline used in a licensed motor vehicle in
583	583	this state.
584	584	Subd. 5.Intended use.All special fuel except that used for aviation fuel shall be deemed to be
585	585	intended for use in a licensed motor vehicle in this state at the time of sale or delivery.
586	586	Subd. 6.Liability for failure to keep adequate records.If adequate records are not kept, or
587	587	if the sales are not adequately accounted for, then all sales of combustible gases and liquid petroleum
588	588	products, except gasoline, are deemed to be sales of special fuel. In such cases, there is imposed
589	589	an excise tax of the same rate per gallon as the gasoline excise tax on all such products, and the
590	590	vendor is liable for the tax.
591	591	296A.083 DEBT SERVICE SURCHARGE.
592	592	Subdivision 1.Definitions.For purposes of this section, the following terms have the meanings
593	593	given them:
594	594	(1) "debt service" means the amount of principal and interest in each fiscal year attributable to
595	595	the trunk highway bonds authorized in Laws 2008, chapter 152, article 2; and
596	596	(2) "surcharge" means the rate imposed under this section on gasoline taxed under section
597	597	296A.07, subdivision 3, clause (3), and includes a proportional rate for each type of fuel taxed under
598	598	sections 296A.07, subdivision 3, clauses (1) and (2), and 296A.08, subdivision 2.
599	599	Subd. 2.Debt service forecast.On April 1 each year, the commissioner of management and
600	600	budget shall report to the commissioner of revenue on trunk highway debt service. The report must
601	601	include the annual amount of revenue from the surcharge previously deposited in the trunk highway
602	602	fund, and a forecast of the total and annual amounts necessary to pay the remaining debt service.
603	603	Subd. 3.Surcharge rate.(a) By May 1 each year, the commissioner of revenue shall calculate
604	604	and publish a surcharge as provided in paragraph (b). The surcharge is imposed beginning July 1
605	605	of the year it is published through June 30 of the following year.
606	606	(b) The commissioner shall set the surcharge at the lesser of (1) 3.5 cents, or (2) an amount
607	607	calculated so that the total proceeds from the surcharge deposited in the trunk highway fund from
608	608	fiscal year 2009 to the upcoming fiscal year equals the total amount of debt service from fiscal
609	609	years 2009 to 2039, and the surcharge is rounded to the nearest 0.1 cent.
610	610	Subd. 4.Apportionment.The surcharge under this section is subject to the apportionment
611	611	provisions of section 296A.18.
612	612	296A.09 AVIATION TAX.
613	613	Subdivision 1.Gasoline tax imposed.Subject to any refunds or credits there is imposed an
614	614	excise tax, at the rate of five cents per gallon on all aviation gasoline received, sold, stored, or
615	615	withdrawn from storage in this state. Aviation gasoline is defined in section 296A.01, subdivision
616	616	7.
617	617	Subd. 2.Jet fuel and special fuel tax imposed.There is imposed an excise tax of 15 cents per
618	618	gallon on all jet fuel or special fuel received, sold, stored, or withdrawn from storage in this state,
619	619	for use as substitutes for aviation gasoline and not otherwise taxed as gasoline. Jet fuel is defined
620	620	in section 296A.01, subdivision 8.
621	621	Subd. 3.Exception to tax for aviation use.The provisions of subdivisions 1 and 2 do not apply
622	622	to aviation gasoline or special fuel purchased and placed in the fuel tanks of an aircraft outside the
623	623	state, even though the gasoline may be consumed within this state.
624	624	Subd. 4.Manner of payment.These taxes are payable in the form and manner prescribed by
625	625	the commissioner.
626	626	Subd. 5.Tax not on consumption.The taxes imposed by subdivisions 1 and 2 are expressly
627	627	declared not to be a tax upon consumption of aviation gasoline or special fuel by an aircraft.
628	628	Subd. 6.Exemptions.The provisions of subdivisions 1 and 2 do not apply to aviation gasoline
629	629	or jet fuel purchased by an ambulance service licensed under chapter 144E.
630	630	296A.10 LIABILITY FOR UNPAID TAX.
631	631	Subdivision 1.Unreported fuel.It is the duty of every distributor, dealer, and person who sells
632	632	or uses gasoline manufactured, produced, received, or stored by the distributor, dealer, or person,
633	633	3R
634	634	APPENDIX
635	635	Repealed Minnesota Statutes: 25-02126 and of every person using gasoline in motor vehicles or special fuel in licensed motor vehicles to
636	636	know whether the tax has been paid on the fuel. If the tax has not been reported or if the tax has
637	637	not been paid, it is that person's duty to report to the commissioner the quantity of the gasoline or
638	638	special fuel sold or used and to pay the tax as provided in this chapter. All provisions of this chapter
639	639	relating to the calculation, collections, and payment of the tax shall be applicable to any such person,
640	640	dealer, or distributor.
641	641	Subd. 2.Unreported aviation gasoline.The provisions of subdivision 1 do not apply to aviation
642	642	gasoline. It is the duty of every distributor, dealer, and person who receives, sells, stores, or withdraws
643	643	from storage in this state aviation gasoline manufactured, produced, received, or stored by the
644	644	distributor, dealer, or person to know whether the tax has been paid on the aviation gasoline. If the
645	645	fuel has not been reported, or if the tax has not been paid to the commissioner, it is that person's
646	646	duty to report to the commissioner the quantity of such gasoline so received, sold, stored, or
647	647	withdrawn from storage. That person is also liable for the payment of the tax. All provisions of this
648	648	chapter relating to the calculation, collections, and payment of the tax apply to any such person,
649	649	dealer, or distributor.
650	650	296A.11 SELLER MAY COLLECT TAX.
651	651	A person who directly or indirectly pays a gasoline or special fuel tax as provided in this chapter
652	652	and who does not in fact use the gasoline or special fuel in motor vehicles in this state or receive,
653	653	store, or withdraw it from storage to be used personally for the purpose of producing or generating
654	654	power for propelling aircraft, but sells or otherwise disposes of the same, except as provided in
655	655	section 296A.16, subdivision 3, is hereby authorized to collect, from the person to whom the gasoline
656	656	or special fuel is so sold or disposed of, the tax so paid, and is hereby required, upon request, to
657	657	make, sign, and deliver to such person an invoice of such sale or disposition. The sums collected
658	658	must be held as a special fund in trust for the state of Minnesota.
659	659	296A.13 PERSONAL LIABILITY FOR TAX.
660	660	Liability for payment of taxes under this chapter includes a responsible person or entity described
661	661	in the personal liability provisions of section 270C.56.
662	662	296A.14 TAX AS PERSONAL DEBT OF FIDUCIARY.
663	663	The tax imposed by this chapter, and interest and penalties, is a personal debt of the taxpayer
664	664	from the time the liability arises, regardless of when the time for discharging the liability by payment
665	665	occurs. The debt is, in the case of any fiduciary, that of the individual in the individual's official or
666	666	fiduciary capacity only, unless the individual has voluntarily distributed the assets held in that
667	667	capacity without reserving sufficient assets to pay the tax, interest, and penalties, in which event
668	668	the individual is personally liable for the deficiency.
669	669	296A.16 REFUND OR CREDIT.
670	670	Subdivision 1.Credit or refund of gasoline or special fuel tax paid.The commissioner shall
671	671	allow the distributor credit or refund of the tax paid on gasoline and special fuel:
672	672	(1) exported or sold for export from the state, other than in the supply tank of a motor vehicle
673	673	or of an aircraft;
674	674	(2) sold to the United States government to be used exclusively in performing its governmental
675	675	functions and activities or to any "cost plus a fixed fee" contractor employed by the United States
676	676	government on any national defense project;
677	677	(3) if the fuel is placed in a tank used exclusively for residential heating;
678	678	(4) destroyed by accident while in the possession of the distributor;
679	679	(5) in error;
680	680	(6) in the case of gasoline only, sold for storage in an on-farm bulk storage tank, if the tax was
681	681	not collected on the sale; and
682	682	(7) in such other cases as the commissioner may permit, consistent with the provisions of this
683	683	chapter and other laws relating to the gasoline and special fuel excise taxes.
684	684	Subd. 2.Fuel used in other vehicle; claim for refund.Any person who buys and uses gasoline
685	685	for a qualifying purpose other than use in motor vehicles, snowmobiles except as provided in clause
686	686	(2), or motorboats, or special fuel for a qualifying purpose other than use in licensed motor vehicles,
687	687	and who paid the tax directly or indirectly through the amount of the tax being included in the price
688	688	4R
689	689	APPENDIX
690	690	Repealed Minnesota Statutes: 25-02126 of the gasoline or special fuel, or otherwise, shall be reimbursed and repaid the amount of the tax
691	691	paid upon filing with the commissioner a claim for refund in the form and manner prescribed by
692	692	the commissioner, and containing the information the commissioner shall require. By signing any
693	693	such claim which is false or fraudulent, the applicant shall be subject to the penalties provided in
694	694	this chapter for knowingly making a false claim. The claim shall set forth the total amount of the
695	695	gasoline so purchased and used by the applicant other than in motor vehicles, or special fuel
696	696	purchased and used by the applicant other than in licensed motor vehicles, and shall state when and
697	697	for what purpose it was used. When a claim contains an error in computation or preparation, the
698	698	commissioner is authorized to adjust the claim in accordance with the evidence shown on the claim
699	699	or other information available to the commissioner. The commissioner, on being satisfied that the
700	700	claimant is entitled to the payments, shall approve the claim and transmit it to the commissioner of
701	701	management and budget. The words "gasoline" or "special fuel" as used in this subdivision do not
702	702	include aviation gasoline or special fuel for aircraft. Gasoline or special fuel bought and used for
703	703	a "qualifying purpose" means:
704	704	(1) Gasoline or special fuel used in carrying on a trade or business, used on a farm situated in
705	705	Minnesota, and used for a farming purpose. "Farm" and "farming purpose" have the meanings given
706	706	them in section 6420(c)(2), (3), and (4) of the Internal Revenue Code as defined in section 289A.02,
707	707	subdivision 7.
708	708	(2) Gasoline or special fuel used for off-highway business use.
709	709	(i) "Off-highway business use" means any use off the public highway by a person in that person's
710	710	trade, business, or activity for the production of income.
711	711	(ii) Off-highway business use includes use of a passenger snowmobile off the public highways
712	712	as part of the operations of a resort as defined in section 157.15, subdivision 11; and use of gasoline
713	713	or special fuel to operate a power takeoff unit on a vehicle, but not including fuel consumed during
714	714	idling time.
715	715	(iii) Off-highway business use does not include use as a fuel in a motor vehicle which, at the
716	716	time of use, is registered or is required to be registered for highway use under the laws of any state
717	717	or foreign country; or use of a licensed motor vehicle fuel tank in lieu of a separate storage tank
718	718	for storing fuel to be used for a qualifying purpose, as defined in this section. Fuel purchased to be
719	719	used for a qualifying purpose cannot be placed in the fuel tank of a licensed motor vehicle and must
720	720	be stored in a separate supply tank.
721	721	(3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles, manufactured in
722	722	Minnesota, and shipped by interstate carrier to destinations in other states or foreign countries.
723	723	Subd. 3.Destruction by accident; refund to dealer.Notwithstanding the provisions of
724	724	subdivision 1, the commissioner shall allow a dealer a refund of:
725	725	(1) the tax paid by the distributor on gasoline, undyed diesel fuel, or undyed kerosene destroyed
726	726	by accident while in the possession of the dealer; or
727	727	(2) the tax paid by a distributor or special fuels dealer on other special fuels destroyed by accident
728	728	while in the possession of the dealer.
729	729	Subd. 4.Refrigerator units; refunds.Notwithstanding the provisions of subdivision 1, the
730	730	commissioner shall allow a special fuel dealer a refund of the tax paid on fuel sold directly into a
731	731	supply tank of a refrigeration unit with a separate engine and used exclusively by that refrigeration
732	732	unit. A claim for refund may be filed as provided in this section.
733	733	Subd. 4a.Undyed kerosene; refunds.Notwithstanding subdivision 1, the commissioner shall
734	734	allow a refund of the tax paid on undyed kerosene used exclusively for a purpose other than as fuel
735	735	for a motor vehicle using the streets and highways. To obtain a refund, the person making the sale
736	736	to an end user must meet the Internal Revenue Service requirements for sales from a blocked pump.
737	737	A claim for a refund may be filed as provided in this section.
738	738	Subd. 4b.Racing gasoline; refunds.Notwithstanding subdivision 1, the commissioner shall
739	739	allow a licensed distributor a refund of the tax paid on leaded gasoline of 110 octane or more that
740	740	does not meet ASTM specification D4814 for gasoline and that is sold in bulk for use in nonregistered
741	741	motor vehicles. A claim for a refund may be filed as provided for in this section.
742	742	Subd. 5.Qualifying service station credit.Notwithstanding any other provision of law to the
743	743	contrary, the tax imposed on gasoline, undyed diesel fuel, or undyed kerosene delivered to a qualified
744	744	service station may not exceed, or must be reduced to, a rate not more than three cents per gallon
745	745	above the state tax rate imposed on such products sold by a service station in a contiguous state
746	746	5R
747	747	APPENDIX
748	748	Repealed Minnesota Statutes: 25-02126 located within the distance indicated in this subdivision. A distributor shall be allowed a credit or
749	749	refund for the amount of reduction computed in accordance with this subdivision. For purposes of
750	750	this subdivision, a "qualifying service station" means a service station located within 7.5 miles,
751	751	measured by the shortest route by public road, from a service station selling like product in the
752	752	contiguous state.
753	753	Subd. 7.Civil penalty for filing false claim.A person who violates section 296A.23, subdivision
754	754	1, shall forfeit the full amount of the claim. In addition, a person who is convicted under section
755	755	296A.23 for filing a false statement or claim shall, in addition to any criminal penalties imposed,
756	756	be prohibited from filing with the commissioner any claim for refund upon gasoline purchased
757	757	within six months after such conviction.
758	758	Subd. 8.Appropriation.There is appropriated to the persons entitled to refund or credit under
759	759	this section, from the fund or account in the state treasury to which the money was credited, an
760	760	amount sufficient to make the credit or refund.
761	761	296A.17 AVIATION REFUND.
762	762	Subdivision 1.Aviation refund requirements.Any person claiming to be entitled to any refund
763	763	or credit provided for in subdivision 3 shall receive the refund or credit upon filing with the
764	764	commissioner a claim in such form and manner prescribed by the commissioner. The claim shall
765	765	set forth, among other things, the total number of gallons of aviation gasoline or special fuel for
766	766	aircraft use upon which the claimant has directly or indirectly paid the excise tax provided for in
767	767	this chapter, during the calendar year, which has been received, stored, or withdrawn from storage
768	768	by the claimant in this state and not sold or otherwise disposed of to others. All claims for refunds
769	769	under this subdivision shall be made on or before April 30 following the end of the calendar year
770	770	for which the refund is claimed.
771	771	Subd. 2.Claim for refund; aviation tax.(a) Any person who buys aviation gasoline or special
772	772	fuel for aircraft use and who has paid the excise taxes directly or indirectly through the amount of
773	773	the tax being included in the price, or otherwise, who does not use it in motor vehicles or receive,
774	774	sell, store, or withdraw it from storage for the purpose of producing or generating power for
775	775	propelling aircraft, shall be reimbursed and repaid the amount of the tax paid upon filing with the
776	776	commissioner a claim in the form and manner prescribed by the commissioner. The claim shall
777	777	state the total amount of the aviation gasoline or special fuel for aircraft use purchased and used by
778	778	the applicant, and shall state when and for what purpose it was used. On being satisfied that the
779	779	claimant is entitled to payment, the commissioner shall approve the claim and transmit it to the
780	780	commissioner of management and budget. The postmark on the envelope in which a written claim
781	781	is mailed determines the date of filing.
782	782	(b) If a claim contains an error in preparation in computation or preparation, the commissioner
783	783	is authorized to adjust the claim in accordance with the evidence shown on the claim or other
784	784	information available to the commissioner.
785	785	(c) An applicant who files a claim that is false or fraudulent, is subject to the penalties provided
786	786	in section 296A.23 for knowingly and willfully making a false claim.
787	787	Subd. 3.Refund on graduated basis.Any person who has directly or indirectly paid the excise
788	788	tax on aviation gasoline or special fuel for aircraft use provided for by this chapter and has either
789	789	paid the airflight property tax under section 270.072 or is an aerial applicator with a category B,
790	790	general aerial license, under section 18B.33, shall, as to all such aviation gasoline and special fuel
791	791	received, stored, or withdrawn from storage by the person in this state in any calendar year and not
792	792	sold or otherwise disposed of to others, or intended for sale or other disposition to others, on which
793	793	such tax has been so paid, be entitled to the following graduated reductions in such tax for that
794	794	calendar year, to be obtained by means of the following refunds:
795	795	(1) on each gallon of aviation gasoline or special fuel up to 50,000 gallons, all but five cents
796	796	per gallon;
797	797	(2) on each gallon of aviation gasoline or special fuel above 50,000 gallons and not more than
798	798	150,000 gallons, all but two cents per gallon;
799	799	(3) on each gallon of aviation gasoline or special fuel above 150,000 gallons and not more than
800	800	200,000 gallons, all but one cent per gallon;
801	801	(4) on each gallon of aviation gasoline or special fuel above 200,000, all but one-half cent per
802	802	gallon.
803	803	6R
804	804	APPENDIX
805	805	Repealed Minnesota Statutes: 25-02126 Subd. 4.Aviation gasoline tax refund claim; civil penalty.If any distributor or other person,
806	806	with intent to unlawfully secure any refund provided for in subdivision 3, shall knowingly file a
807	807	false or fraudulent claim, there is imposed upon the person a penalty in an amount equal to 50
808	808	percent of the amount of the refund unlawfully secured, in addition to that amount. The penalty
809	809	imposed by this subdivision shall be collected as part of the tax.
810	810	Subd. 5.Appropriation.There is appropriated to the persons entitled to refund under this
811	811	section, from the fund or account in the state treasury to which the money was credited, an amount
812	812	sufficient to make the credit or refund. All money in excess of the amount the commissioner certifies
813	813	is reasonably required for the refunds must be transferred by the commissioner of management and
814	814	budget to the state airports fund.
815	815	296A.18 APPORTIONMENT OF TAX; DEPOSIT OF PROCEEDS.
816	816	Subdivision 1.Intent; gasoline use.All gasoline received in this state and all gasoline produced
817	817	in or brought into this state except aviation gasoline and marine gasoline shall be determined to be
818	818	intended for use in motor vehicles in this state.
819	819	Subd. 2.Motorboat.Approximately 1-1/2 percent of all gasoline received in this state and
820	820	1-1/2 percent of all gasoline produced or brought into this state, except gasoline used for aviation
821	821	purposes, is being used as fuel for the operation of motorboats on the waters of this state and of the
822	822	total revenue derived from the imposition of the gasoline fuel tax for uses other than for aviation
823	823	purposes, 1-1/2 percent of the revenue is the amount of tax on fuel used in motorboats operated on
824	824	the waters of this state. The amount of unrefunded tax paid on gasoline used for motor boat purposes
825	825	as computed in this chapter shall be paid into the state treasury and credited to a water recreation
826	826	account in the special revenue fund for acquisition, development, maintenance, and rehabilitation
827	827	of sites for public access and boating facilities on public waters; lake and river improvement; and
828	828	boat and water safety.
829	829	Subd. 3.Snowmobile.Approximately one percent of all gasoline received in and produced or
830	830	brought into this state, except gasoline used for aviation purposes, is being used as fuel for the
831	831	operation of snowmobiles in this state, and of the total revenue derived from the imposition of the
832	832	gasoline fuel tax for uses other than for aviation purposes, one percent of such revenues is the
833	833	amount of tax on fuel used in snowmobiles operated in this state.
834	834	Subd. 4.All-terrain vehicle.Approximately 0.27 of one percent of all gasoline received in or
835	835	produced or brought into this state, except gasoline used for aviation purposes, is being used for
836	836	the operation of all-terrain vehicles in this state, and of the total revenue derived from the imposition
837	837	of the gasoline fuel tax, 0.27 of one percent is the amount of tax on fuel used in all-terrain vehicles
838	838	operated in this state.
839	839	Subd. 5.Off-highway motorcycles.Approximately 0.046 of one percent of all gasoline received
840	840	or produced in or brought into this state, except gasoline used for aviation purposes, is being used
841	841	for the operation of off-highway motorcycles in this state, and of the total revenue derived from
842	842	the imposition of the gasoline fuel tax for uses other than for aviation purposes, 0.046 of one percent
843	843	is the amount of tax on fuel used in off-highway motorcycles operated in this state.
844	844	Subd. 6.Off-road vehicle.Approximately 0.164 of one percent of all gasoline received or
845	845	produced in or brought into this state, except gasoline used for aviation purposes, is being used for
846	846	the off-road operation of off-road vehicles, as defined in section 84.797, in this state, and of the
847	847	total revenue derived from the imposition of the gasoline fuel tax for uses other than aviation
848	848	purposes, 0.164 of one percent is the amount of tax on fuel used for off-road operation of off-road
849	849	vehicles in this state.
850	850	Subd. 6a.Computation of nonhighway use amounts.The nonhighway use amounts determined
851	851	in subdivisions 2 to 6 must be transferred from the highway user tax distribution fund to the accounts
852	852	as provided for in sections 84.794, 84.803, 84.83, 84.927, and 86B.706. These amounts, together
853	853	with interest and penalties for delinquency in payment, paid or collected pursuant to the provisions
854	854	of this chapter, must be computed for each six-month period ending June 30 and December 31 and
855	855	must be transferred on November 1 and April 1 following each six-month period.
856	856	Subd. 7.Forest road.Approximately 0.116 percent of the total annual unrefunded revenue
857	857	from the gasoline fuel tax on all gasoline and special fuel received in, produced, or brought into
858	858	this state, except gasoline and special fuel used for aviation purposes, is derived from the operation
859	859	of motor vehicles on state forest roads and county forest access roads. This revenue, together with
860	860	interest and penalties for delinquency in payment, paid or collected pursuant to the provisions of
861	861	this chapter, is appropriated from the highway user tax distribution fund and must be transferred
862	862	7R
863	863	APPENDIX
864	864	Repealed Minnesota Statutes: 25-02126 and credited in equal installments on July 1 and January 1 to the state forest road account established
865	865	in section 89.70. Of this amount, 0.0605 percent is annually derived from motor vehicles operated
866	866	on state forest roads and 0.0555 percent is annually derived from motor vehicles operated on county
867	867	forest access roads in this state. An amount equal to 0.0555 percent of the unrefunded revenue must
868	868	be annually transferred to counties for the management and maintenance of county forest roads.
869	869	Subd. 8.Airports.The revenues derived from the excise taxes on aviation gasoline and on
870	870	special fuel received, sold, stored, or withdrawn from storage as substitutes for aviation gasoline,
871	871	shall be paid into the state treasury and credited to the state airports fund. There is hereby
872	872	appropriated such sums as are needed to carry out the provisions of this subdivision.
873	873	296A.22 NONPAYMENT OF TAX; CIVIL PENALTIES.
874	874	Subd. 4.Unlawful use of dyed fuel.(a) If any dyed fuel is sold or held for sale by a person for
875	875	any use which the person knows or has reason to know is not a nontaxable use of the fuel; or if any
876	876	dyed fuel is held for use or used in a licensed motor vehicle or for any other use by a person for a
877	877	use other than a nontaxable use and the person knew, or had reason to know, that the fuel was so
878	878	dyed; or if a person willfully alters, or attempts to alter, the strength or composition of any dye or
879	879	marking in any dyed fuel, then the person shall pay a penalty in addition to the tax, if any.
880	880	(b) Except as provided in paragraph (c), the amount of penalty under paragraph (a) for each act
881	881	is the greater of $1,000, or $10 for each gallon of dyed fuel involved.
882	882	(c) With regard to a multiple violation under paragraph (a), the penalty shall be applied by
883	883	increasing the amount in paragraph (b) by the product of (1) such amount, and (2) the number of
884	884	prior penalties, if any, imposed by this section on the person, or a related person, or any predecessor
885	885	of the person or related person.
886	886	(d) If a penalty is imposed under this subdivision on a business entity, each officer, employee,
887	887	or agent of the entity who willfully participated in any act giving rise to the penalty is jointly and
888	888	severally liable with the entity for the penalty.
889	889	296A.23 CRIMINAL PENALTIES.
890	890	Subd. 3.Operation of vehicle without payment of tax.A person who operates, or causes to
891	891	be operated, a licensed motor vehicle on the public highways of this state on special fuel on which
892	892	the excise tax provided by this chapter has not been paid, or the liability assumed by another person
893	893	licensed under this chapter, is guilty of a misdemeanor.
894	894	Subd. 4.Use of untaxed fuel in motor vehicle.A person who uses gasoline, which has been
895	895	delivered into an on-farm bulk storage tank, and on which no tax has been paid as provided in
896	896	section 296A.15, subdivision 5, and who uses this gasoline for propelling a motor vehicle on the
897	897	public highways of this state is guilty of a misdemeanor.
898	898	Subd. 6.Fiduciary relationship established.A person other than the commissioner who is
899	899	authorized to collect excise taxes on behalf of the state of Minnesota, establishes a fiduciary
900	900	relationship, and whoever violates that relationship is guilty of a violation of this chapter, and of
901	901	section 609.54, and may be punished accordingly.
902	902	296A.26 JUDICIAL REVIEW; APPEAL TO TAX COURT.
903	903	In lieu of an administrative appeal under section 270C.35, any person aggrieved by an order of
904	904	the commissioner fixing a tax, penalty, or interest under this chapter may, within 60 days from the
905	905	notice date of the order, appeal to the Tax Court in the manner provided under section 271.06. For
906	906	purposes of this section, "notice date" means the notice date designated by the commissioner on
907	907	the order fixing a tax, penalty, or interest.
908	908	8R
909	909	APPENDIX
910	910	Repealed Minnesota Statutes: 25-02126