Compliance Checks of Cigarette and Tobacco Retailers

We help taxpayers understand cigarette and tobacco taxes and enforce compliance with the law by:

• Educating retailers, suppliers, and consumers about their tax obligations
• Auditing and investigating the cigarette and tobacco product records of retailers and suppliers

We enforce the cigarette and tobacco tax laws by:

• Assessing tax and civil penalties against people who do not comply with the law
• Seizing contraband cigarettes and tobacco products on which tax has not been paid
• Seeking criminal prosecution against people who intentionally evade cigarette and tobacco taxes

One way we monitor compliance is by conducting random inspections of cigarette and tobacco retailers.

During these visits, we:

• Inspect the retailer’s cigarette and tobacco inventory
• Check the retailer’s license to sell cigarette or tobacco products
• Review the retailer’s invoices from cigarette and tobacco suppliers

Watch our Minnesota Cigarette and Tobacco Retail Inspection video to learn more about the process.

During the inspection, we examine the cigarette inventory to verify that:

• Each pack of cigarettes is properly stamped in compliance with Minnesota law (the stamps must be completely intact and all 10 numbers legible to identify the distributor)
• Stamps are authentic and not counterfeit

Any pack of cigarettes that is not properly stamped is considered contraband and we may confiscate it.

Under Minnesota law, all retailers must buy their cigarettes and tobacco products from a licensed distributor or subjobber who paid the tax on the product.

View our licensed Cigarette and Tobacco Distributors List.

Retailers must:

• Keep a legible copy of each invoice for one year from the date of the invoice or as long as the cigarette or tobacco product listed on the invoice is available for sale or in their possession, whichever period is longer
• Keep copies of the invoices at each retail location or at a central location
• Provide copies at a retail location within one hour when requested by Revenue

Copies should be numbered and kept in chronological order.

For more information about invoices, go to Record Retention for Cigarette and Tobacco Product Invoices.

If you suspect Cigarette or Tobacco Tax violations, please report it to us. You may remain anonymous.

Email: tax.fraud@state.mn.us

Phone: 651-297-5195 or 1-800-657-3500 (toll-free)

Fax: 651-556-3105