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Who is liable for Tobacco Tax?

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​In general:

  • For tobacco received by a distributor located in Minnesota: The distributor is liable for the tobacco excise tax.
  • For tobacco sales from a distributor located outside Minnesota: The distributor is liable for the tobacco excise tax when selling to a retailer in Minnesota, but is not liable when selling to a distributor located in Minnesota.

For details about specific business situations, refer to this table.

You are a: You sold tobacco products to: Are you liable for the tax?
Minnesota (resident) distributor a Minnesota retailer Yes, if you were the first distributor who received the tobacco products at a location in Minnesota.
Minnesota (resident) distributor a Minnesota (resident) distributor It depends. 
Yes, if you were the first distributor who received the tobacco products at a location in Minnesota.
No, if you shipped or transported the tobacco products from outside Minnesota directly to a distributor in Minnesota.
Out-of-state (non-resident) distributor a Minnesota retailer Yes. You shipped or transported the tobacco products to a retailer in Minnesota.
Out-of-state (non-resident) distributor a Minnesota (resident) distributor No. The first distributor who received the tobacco products at a location in Minnesota is liable for the tax.

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