(concurring in part, dissenting in part).
I dissent in part from the majority’s conclusion that the language of the 2003 amendment had no impact on the way tobacco taxes are calculated.
Up until 1999, a tobacco tax was assessed based on “the established price for which a manufacturer sells a tobacco product to a distributor.” Minn.Stat. § 297F.01, subd. 23 (1998). This language reflected the practice of most manufacturers selling their products directly to distributors like McLane. In 1999, the statute was amended to provide that the tax was charged on the wholesale price, defined as “the established price for which a manufacturer or person sells a tobacco product to a distributor, exclusive of any discount or other reduction.” (Emphasis added). Minn.Stat. § 297F.01, subd. 23 (2002). Act of May 25, 1999, ch. 243, art. 7, § 9, 1999 Minn. Laws 2054, 2166. Under the amended statute, the tobacco tax, previously calculated only on sales made by the manufacturer, would now be calculated based on taxable sales made by a distributor who is not a manufacturer. This language reflected a change in the practice of marketing by tobacco manufacturers. Instead of selling directly to distributors, manufactui’ers such as USSTC formed sales subsidiaries that sold tobacco products to distributors. These transactions were captured by the amended statutory language.
The legislature changed the statute again in 2003, to more specifically define wholesale price. Under the amended statute, “wholesale sales price” is the “price stated on the price list in effect at the time of sale.” Act of May 25, 2003, ch. 127, art. 7, § 5, 2003 Minn. Laws 731, 851. The amended statute further defines “price list” as “the manufacturer’s price at which tobacco products are made available for all distributors on an on-going basis.” Id. (emphasis added).
To me, the legislature’s language could not be more clear. From 1999 to the effective date of the 2003 amendment, taxes were calculated based on the wholesale sales price charged by either the manufacturer or a distributor selling to a second distributor. For that period of time, McLane was properly assessed taxes based on the price it paid to Sales for its products. However, after the 2003 amendment, the legislature specifically provided that, for purposes of calculating the tax, the wholesale price was what the manufacturer charged all of its distributors on an on-going basis. The fact that the manufacturer’s distributors charged other distributors a different price is of no moment. I would affirm the tax court’s decision with regard to the tax year 2002-2003 but reverse with regard to tax years 2003-2005.
I agree with the majority’s analysis of the commerce clause issues, and therefore join in section II of the opinion.