Subdivision 1.Tax imposed.

There is imposed an excise tax on gasoline, gasoline blended with ethanol, and agricultural alcohol gasoline used in producing and generating power for propelling motor vehicles used on the public highways of this state. The tax is imposed on the first licensed distributor who received the product in Minnesota. For purposes of this section, gasoline is defined in section 296A.01, subdivisions 8b, 10, 18, 20, 23, 24, 25, 32, and 34. The tax is payable at the time and in the form and manner prescribed by the commissioner. The tax is payable at the rates specified in subdivision 3, subject to the exceptions and reductions specified in section 296A.17.

Subd. 2.Tax imposed for marine use.

Terms Used In Minnesota Statutes 296A.07

  • Adult: means an individual 18 years of age or older. See Minnesota Statutes 645.451
  • Agricultural alcohol gasoline: means a gasoline-ethanol blend satisfying the provisions of section 239. See Minnesota Statutes 296A.01
  • Aircraft: means any contrivance, now or hereafter invented, used or designed for navigation of or flight in the air. See Minnesota Statutes 296A.01
  • Aviation gasoline: means any gasoline that is used to produce or generate power for propelling internal combustion engine aircraft. See Minnesota Statutes 296A.01
  • Commissioner: means the commissioner of revenue. See Minnesota Statutes 296A.01
  • Dealer: means any person, except a distributor, engaged in the business of buying and selling gasoline and other petroleum products in this state. See Minnesota Statutes 296A.01
  • Distributor: means any person who (1) receives petroleum products in this state for storage and subsequent distribution by tank car or tank truck or both, (2) produces, manufactures, or refines petroleum products in this state, or (3) imports petroleum products into this state via boat, barge, or pipeline for storage and subsequent delivery at or further transportation from boat, barge, or pipe line terminals in this state. See Minnesota Statutes 296A.01
  • Gasoline: means :

    (1) all products commonly or commercially known or sold as gasoline regardless of their classification or uses, except casinghead gasoline, absorption gasoline, condensation gasoline, drip gasoline, or natural gasoline that under the requirements of section 239. See Minnesota Statutes 296A.01

  • Gasoline blended with ethanol: means a gasoline-ethanol blend satisfying the provisions of section 239. See Minnesota Statutes 296A.01
  • Highway: means the entire width between the boundary lines of every way publicly maintained when part of the way is open for the public. See Minnesota Statutes 296A.01
  • Marine gasoline: means gasoline used in producing and generating power for propelling motorboats used on the waters of this state. See Minnesota Statutes 296A.01
  • public highways: includes bridges. See Minnesota Statutes 296A.01
  • state: extends to and includes the District of Columbia and the several territories. See Minnesota Statutes 645.44
  • Tax: means any fee, charge, exaction, or assessment imposed by a governmental entity on an individual, person, entity, transaction, good, service, or other thing. See Minnesota Statutes 645.44
  • terminal: means any petroleum refinery, pipeline terminal, river terminal, storage facility, or other point of origin where petroleum products are manufactured, or imported by rail, truck, barge, or pipe; and held, stored, transferred, offered for distribution, distributed, offered for sale, or sold. See Minnesota Statutes 296A.01

Subject to the provisions of section 296A.16, subdivision 2, there is imposed an excise tax, at the same rate per gallon as the gasoline excise tax, on all marine gasoline received, sold, stored, or withdrawn from storage in this state. This tax is payable at the times, in the manner, and by persons specified in this chapter.

Subd. 3.Rate of tax.

(a) Subject to paragraph (b), the gasoline excise tax is imposed at the following rates:

(1) E85 is taxed at the rate of 17.75 cents per gallon;

(2) M85 is taxed at the rate of 14.25 cents per gallon; and

(3) all other gasoline is taxed at the rate of 25 cents per gallon.

(b) Annually on August 1, the commissioner must determine the tax rate applicable to the sale of E85, M85, and all other gasoline subject to tax under this section for the upcoming 12-month period beginning on January 1. The adjusted rate must equal the current rate, multiplied by one plus the percentage increase, if any, in the Minnesota Highway Construction Cost Index for the reference year. The tax rate must be rounded to the nearest tenth of a cent. Each of the tax rates for E85, M85, and all other gasoline must not be lower than the respective rates specified in paragraph (a). Beginning with the calculation on August 1, 2025, the percentage change in each of the tax rates for E85, M85, and all other gasoline as a result of the requirements under this paragraph must not exceed three percent.

(c) For purposes of this subdivision:

(1) the Minnesota Highway Construction Cost Index is as determined by the commissioner of transportation; and

(2) “reference year” means the 12-month period ending on June 30 two years prior to the year in which the calculation is made.

Subd. 4.Exemptions.

The provisions of subdivision 1 do not apply to gasoline or denatured ethanol purchased by:

(1) a transit system or transit provider receiving financial assistance or reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384;

(2) providers of transportation to recipients of medical assistance home and community-based services waivers enrolled in day programs, including adult day care, family adult day care, day treatment and habilitation, prevocational services, and structured day services;

(3) an ambulance service licensed under chapter 144E;

(4) providers of medical or dental services by a federally qualified health center, as defined under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile medical unit;

(5) a licensed distributor to be delivered to a terminal for use in blending; or

(6) a dealer of aviation gasoline, but only to the extent that the gasoline is intended to be dispensed directly into the fuel tank of an aircraft.