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H0693...............................................by REVENUE AND TAXATION
CIGARS - TAXATION - Amends existing law to provide that the tax on cigars
shall not exceed fifty cents per cigar.
02/16 House intro - 1st rdg - to printing
02/17 Rpt prt - to Rev/Tax
02/28 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 43-23-4
AYES -- Anderson, Barrett, Bastian, Bayer, Bilbao, Black, Bradford,
Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth,
Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
Henderson, Jaquet, Kemp, Martinez, McGeachin, McKague, Miller,
Mitchell, Nielsen, Raybould, Sali, Schaefer, Shepherd(2),
Shepherd(8), Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Wills,
Mr. Speaker
NAYS -- Andrus, Barraclough, Bedke, Bell, Bolz, Brackett, Cannon,
Lake, LeFavour, Loertscher, Mathews, Moyle, Pasley-Stuart, Pence,
Ring, Ringo, Roberts, Rusche, Rydalch, Shirley, Stevenson, Trail,
Wood
Absent and excused -- Block, Boe, Nonini, Sayler
Floor Sponsor - Clark
Title apvd - to Senate
03/07 Senate intro - 1st rdg - to Loc Gov
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 693
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO THE TAX ON TOBACCO PRODUCTS; AMENDING SECTION 63-2552, IDAHO CODE,
3 TO PROVIDE THAT THE TAX ON CIGARS SHALL NOT EXCEED FIFTY CENTS PER CIGAR,
4 TO REMOVE ARCHAIC LANGUAGE AND TO MAKE TECHNICAL CORRECTIONS; AND AMENDING
5 SECTION 63-2552A, IDAHO CODE, TO PROVIDE THAT THE TAX ON CIGARS SHALL NOT
6 EXCEED FIFTY CENTS PER CIGAR AND TO REMOVE ARCHAIC LANGUAGE.
7 Be It Enacted by the Legislature of the State of Idaho:
8 SECTION 1. That Section 63-2552, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 63-2552. TAX IMPOSED -- RATE. (1) From and after July 1, 1972, tThere is
11 levied and there shall be collected a tax upon the sale, use, consumption,
12 handling, or distribution of all tobacco products in this state at the rate of
13 thirty-five per cent percent (35%) of the wholesale sales price of such
14 tobacco products, except that effective July 1, 2006, the tax on cigars shall
15 not exceed fifty cents (50¢) per cigar. Such tax shall be imposed at the time
16 the distributor: (a) brings, or causes to be brought, into this state from
17 without the state tobacco products for sale,; (b) makes, manufactures, or
18 fabricates tobacco products in this state for sale in this state,; or (c)
19 ships or transports tobacco products to retailers in this state, to be sold by
20 those retailers.
21 (2) A floor stocks tax is hereby imposed upon every distributor of
22 tobacco products at the rate of thirty-five per cent (35%) of the wholesale
23 sales price of each tobacco product in his possession or under his control on
24 July 1, 1972.
25 Each distributor, within twenty (20) days after July 1, 1972, shall file a
26 report with the commission, in such form as the commission may prescribe,
27 showing the tobacco products on hand on July 1, 1972, and the amount of tax
28 due thereon.
29 The tax imposed by this subdivision shall be due and payable within twenty
30 (20) days after July 1, 1972, and thereafter shall bear interest at the rate
31 of one per cent (1%) per month.
32 SECTION 2. That Section 63-2552A, Idaho Code, be, and the same is hereby
33 amended to read as follows:
34 63-2552A. ADDITIONAL TAX IMPOSED -- RATE. (1) In addition to the tax
35 imposed in section 63-2552, Idaho Code, from and after July 1, 1994, there is
36 levied and there shall be collected an additional tax upon the sale, use, con-
37 sumption, handling, or distribution of all tobacco products in this state at
38 the rate of five percent (5%) of the wholesale sales price of such tobacco
39 products, except that effective July 1, 2006, the tax on cigars shall not
40 exceed fifty cents (50¢) per cigar. Such tax shall be imposed at the time the
41 distributor:
2
1 (a) Brings, or causes to be brought, into this state from without the
2 state tobacco products for sale;
3 (b) Makes, manufactures, or fabricates tobacco products in this state for
4 sale in this state; or
5 (c) Ships or transports tobacco products to retailers in this state to be
6 sold by those retailers.
7 (2) Each distributor, within twenty (20) days after July 1, 1994, shall
8 file a report with the commission, in such form as the commission may pre-
9 scribe, showing the tobacco products on hand on July 1, 1994, and the amount
10 of tax due thereon. The tax imposed in this subsection shall be due and pay-
11 able within twenty (20) days after July 1, 1994, and thereafter shall bear
12 interest at the rate of one percent (1%) per month.
13 (3) Fifty percent (50%) of the tax collected pursuant to this section
14 shall be subject to appropriation to the public school income fund to be uti-
15 lized to facilitate and provide substance abuse programs in the public school
16 system of which amount two hundred fifty thousand dollars ($250,000) shall be
17 remitted annually to the Idaho state police to increase toxicology lab capac-
18 ity in the bureau of forensic services for drug testing of juveniles, and
19 fifty percent (50%) shall be subject to appropriation to the department of
20 juvenile corrections for distribution quarterly to the counties to be utilized
21 for county juvenile probation services, based upon the percentage the popula-
22 tion of the county bears to the population of the state as a whole. The moneys
23 remitted to the Idaho state police shall be reviewed annually and any money
24 excess to the operations needs of the laboratory for juvenile drug testing
25 will be returned to the public school income fund for substance abuse programs
26 in the public school system. The laboratory may utilize this increased
27 toxicology capacity for adult drug testing to the extent that timely testing
28 for juveniles is not adversely impacted.
STATEMENT OF PURPOSE
RS 15857
These amendments to 63-2552 and 63-2552A, Idaho Code, will make
the retail sale of premium cigars in Idaho more competitive with
the neighboring states of Utah and Nevada. Their excise tax rate
is lower than Idaho and on a level playing field with the
adjoining states of Washington and Oregon, where the excise tax
on cigars is capped at fifty cents.
FISCAL NOTE
Passage of this legislation will result in more premium cigars
being sold by the box in Idaho resulting in more excise and sales
tax revenue. In 2004 Idaho's excise tax on cigars generated only
about $175,000 from the sale of premium, handmade cigars. Since
January, 2002, when Oregon's fifty cents per cigar cap became
effective, premium cigar sales in that state (through 2004) have
increased 37.7%, and excise tax revenue from premium cigars has
jumped 164%. It is estimated Idaho will experience similar
results if the excise tax on cigars is capped at fifty cents.
Contact
Name: Rep. Jim Clark
Phone: (208) 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 693