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Who is liable for Tobacco Tax?

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​You may be liable for Tobacco Tax, depending on your involvement in the sale of tobacco products.

In general:

  • For tobacco received by a distributor located in Minnesota: The distributor is liable.
  • For tobacco received by a distributor located outside Minnesota: The distributor is liable when selling to a retailer in Minnesota, but is not liable when selling to a distributor in Minnesota.
  • For delivery sellers: Delivery sellers are liable for tobacco use tax owed on delivery sales of tobacco products to Minnesota residents unless they are an out-of-state delivery seller who does not meet a Wayfair threshold.

This table gives details about specific business situations.

Who are you? What did you do? Are you liable for the tax?

Minnesota distributor

 Sold tobacco products to a Minnesota retailer Yes, if you were the first distributor to receive the tobacco products at a location in Minnesota.
Minnesota distributor Sold tobacco products to a Minnesota distributor It depends. 
Yes, if you were the first distributor to receive 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 distributor Sold tobacco products to a Minnesota retailer Yes, if you shipped or transported the tobacco products to a retailer in Minnesota.
Out-of-state distributor Sold tobacco products to a Minnesota distributor No. The first distributor who received the tobacco products at a location in Minnesota is liable.
In-state delivery seller Made delivery sales of tobacco products to a Minnesota resident Yes, if you made delivery sales of tobacco products to a Minnesota resident who is subject to Tobacco Use Tax.
Out-of-state delivery seller Made delivery sales of tobacco products to a Minnesota resident It depends.
Yes, if you made delivery sales of tobacco products to a Minnesota resident who is subject to Tobacco Use Tax, and you met a Wayfair threshold.
No, if you made delivery sales of tobacco products to a Minnesota resident who is subject to Tobacco Use Tax, but you did not meet any Wayfair thresholds. In these cases, the Minnesota resident may be liable for the Tobacco Use Tax.
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