Subd. 3a.

Cider.

"Cider" means a product that contains not less than one-half of one
percent nor more than deleted text beginsevendeleted text endnew text begin 8-1/2new text end percent alcohol by volume and is made from the alcoholic
fermentation of the juice of applesnew text begin or pearsnew text end. Cider includes, but is not limited to, flavored,
sparkling, and carbonated cider.

Subdivision 1.

General rate; distilled spirits and wine.

The following excise tax is
imposed on all distilled spirits and wine manufactured, imported, sold, or possessed in this
state:

		Standard		Metric
(a) Distilled spirits, liqueurs, cordials, and specialties regardless of alcohol content (excluding ethyl alcohol)	$	5.03 per gallon	$	1.33 per liter
(b) Wine containing deleted text begin14deleted text endnew text begin 16new text end percent or less alcohol by volume deleted text begin(except cider as defined in section 297G.01, subdivision 3a) deleted text end	$	.30 per gallon	deleted text begin $ deleted text end	deleted text begin .08 per liter deleted text end
(c) Wine containing more than deleted text begin14deleted text endnew text begin 16new text end percent but not more than 21 percent alcohol by volume	$	.95 per gallon	deleted text begin $ deleted text end	deleted text begin .25 per liter deleted text end
(d) Wine containing more than 21 percent but not more than 24 percent alcohol by volume	$	1.82 per gallon	deleted text begin $ deleted text end	deleted text begin .48 per liter deleted text end
(e) Wine containing more than 24 percent alcohol by volume	$	3.52 per gallon	deleted text begin $ deleted text end	deleted text begin .93 per liter deleted text end
(f) Natural and artificial sparkling wines containing alcohol	$	1.82 per gallon	deleted text begin $ deleted text end	deleted text begin .48 per liter deleted text end
(g) Cider as defined in section 297G.01, subdivision 3a	$	.15 per gallon	deleted text begin $ deleted text end	deleted text begin .04 per liter deleted text end
(h) Low-alcohol dairy cocktails	$	.08 per gallon	$	.02 per liter

In computing the tax on a package of distilled spirits or wine, a proportional tax at a like
rate on all fractional parts of a gallon or liter must be paid, except that the tax on a fractional
part of a gallon less than 1/16 of a gallon is the same as for 1/16 of a gallon.

Subd. 6.

Small winery credit.

(a) A qualified winery producing wine or cider is entitled
to a tax credit equal to the excise tax due under subdivision 1, paragraphs (b) to (g), on the
wine or cider sold in any fiscal year beginning July 1. A qualified winery may take the credit
on the 18th day of each month, but the total credit allowed may not exceed, in any fiscal
year, the lesser of:

(1) the liability for tax; or

(2) $136,275.

(b) For purposes of this subdivision, "qualified winery" means a winery, whether or not
located in this state, that manufactured fewer than 75,000 gallons of wine deleted text beginanddeleted text endnew text begin or 250,000
barrels ofnew text end cider in the calendar year immediately preceding the fiscal year for which the
credit under this subdivision is claimed.

(c) By February 15 of each year, beginning in 2019, the commissioner of revenue shall
provide a report to the chairs and ranking minority members of the legislative committees
having jurisdiction over taxes that includes the following information for the previous fiscal
year, regarding the credit authorized under this subdivision:

(1) the total amount of the tax expenditure for the credit, including the amount of credits
claimed by Minnesota small wineries and out-of-state small wineries; and

(2) the number of claimants for the credit, including the number of Minnesota small
wineries and the number of out-of-state small wineries.

Subd. 4.

Off-sale license.

A microdistillery may be issued a license by the local licensing
authority for off-sale of distilled spirits, with the approval of the commissioner. The license
may allow the sale of deleted text beginone 375 milliliter bottledeleted text endnew text begin up to 1.5 litersnew text end per customer per day of product
manufactured on site, subject to the following requirements:

(1) off-sale hours of sale must conform to hours of sale for retail off-sale licensees in
the licensing municipality; and

(2) no brand may be sold at the microdistillery unless it is also available for distribution
by wholesalers.

Subd. 3.

Total retail sales.

A brew pub's total retail sales at on- or off-sale under this
section may not exceed 3,500 barrels per year, provided that off-sales may not new text beginexceed 768
ounces per customer per day nor new text endtotal more than 750 barrelsnew text begin per yearnew text end.