2006 Legislation
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HOUSE BILL NO. 787 – Snuff, moist, tax

HOUSE BILL NO. 787

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Bill Status



H0787...............................................by REVENUE AND TAXATION
SNUFF - TOBACCO - TAXATION - Amends, adds to and repeals existing law to
define "moist snuff"; to provide the rate of taxation for tobacco products
other than moist snuff and to provide for distribution of revenues; to
provide that moist snuff shall be taxed at the rate of one dollar per ounce
of moist snuff, if the wholesale price is $2.50 or less per ounce, or forty
percent of the wholesale price of moist snuff, if the wholesale price is
greater than $2.50 per ounce; and to provide for distribution of tax
revenues.
                                                                        
03/07    House intro - 1st rdg - to printing
03/08    Rpt prt - to Rev/Tax
03/10    Rpt out - rec d/p - to 2nd rdg
03/13    2nd rdg - to 3rd rdg
03/15    3rd rdg - PASSED - 53-15-2
      AYES -- Andrus, Barraclough, Bastian, Bedke, Bell, Bilbao, Block,
      Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon, Clark, Collins,
      Crow, Deal, Denney, Field(18), Field(23), Garrett, Hart, Henbest,
      Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez,
      Mathews, McKague, Miller, Mitchell, Moyle, Nielsen, Pasley-Stuart,
      Pence, Raybould, Ring, Ringo, Rusche, Rydalch, Sayler, Shirley,
      Skippen, Smith(30), Smylie, Stevenson, Trail, Wills, Wood, Mr.
      Speaker
      NAYS -- Anderson, Barrett, Bayer, Black, Edmunson, Eskridge, Harwood,
      McGeachin, Nonini, Sali, Schaefer, Shepherd(2), Shepherd(8),
      Smith(24), Snodgrass
      Absent and excused -- Ellsworth, Roberts
    Floor Sponsors - Field(18) & Lake
    Title apvd - to Senate
03/16    Senate intro - 1st rdg - to St Aff

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 787
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO  THE  TAXATION  OF  CERTAIN  TOBACCO  PRODUCTS;  AMENDING  SECTION
  3        63-2551,  IDAHO CODE, TO DEFINE "MOIST SNUFF" AND TO MAKE A TECHNICAL COR-
  4        RECTION; AMENDING SECTION 63-2552, IDAHO CODE, TO PROVIDE THE RATE OF TAX-
  5        ATION FOR TOBACCO PRODUCTS OTHER THAN MOIST SNUFF, TO PROVIDE FOR  DISTRI-
  6        BUTION  OF  REVENUES  AND TO MAKE TECHNICAL CORRECTIONS; REPEALING SECTION
  7        63-2552A, IDAHO CODE, RELATING TO AN ADDITIONAL  TAX  IMPOSED  ON  TOBACCO
  8        PRODUCTS  AND REPEALING SECTION 63-2564, IDAHO CODE, RELATING TO DISTRIBU-
  9        TION OF TAX REVENUES FROM THE TOBACCO PRODUCTS TAX; AMENDING  CHAPTER  25,
 10        TITLE  63,  IDAHO  CODE,  BY THE ADDITION OF A NEW SECTION 63-2552A, IDAHO
 11        CODE, TO PROVIDE THAT MOIST SNUFF SHALL BE TAXED AT THE RATE OF ONE DOLLAR
 12        PER OUNCE OR FORTY PERCENT OF THE WHOLESALE SALES  PRICE  OF  MOIST  SNUFF
 13        DEPENDING  ON  THE WHOLESALE PRICE OF THE MOIST SNUFF,  AND TO PROVIDE FOR
 14        DISTRIBUTION OF TAX REVENUES ON MOIST SNUFF.
                                                                        
 15    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 16        SECTION 1.  That Section 63-2551, Idaho Code, be, and the same  is  hereby
 17    amended to read as follows:
                                                                        
 18        63-2551.  TOBACCO PRODUCTS TAX -- DEFINITIONS. As used in this act:
 19        (1)  "Tobacco  products" shall mean any cigars, cheroots, stogies, smoking
 20    tobacco (including granulated, plug, cut, crimp  cut,  ready  rubbed  and  any
 21    other kinds and forms of tobacco suitable for smoking in a pipe or cigarette),
 22    chewing  tobacco  (including cavendish, twist, plug, scrap and any other kinds
 23    and forms of tobacco suitable for chewing) and snuff,  however  prepared;  and
 24    shall include any other articles or products made of tobacco or any substitute
 25    therefor, except cigarettes;
 26        (2)  "Moist  snuff"  means  any  finely  cut,  ground, or powdered tobacco
 27    intended to be placed in the oral cavity, but not including dry snuff.
 28        (3)  "Manufacturer" means a person  who  manufactures  and  sells  tobacco
 29    products;
 30        (34)  "Distributor" means: (a) any person engaged in the business of sell-
 31    ing  tobacco  products in this state who brings, or causes to be brought, into
 32    this state from without the state any tobacco products for sale, (b) any  per-
 33    son  who makes, manufactures, or fabricates tobacco products in this state for
 34    sale in this state, (c) any person engaged in the business of selling  tobacco
 35    products  without  this  state  who  ships  or  transports tobacco products to
 36    retailers in this state, to be sold by those retailers;
 37        (45)  "Subjobber" means any person, other than a manufacturer or distribu-
 38    tor, who buys tobacco products from a distributor and sells  them  to  persons
 39    other than the ultimate consumers;
 40        (56)  "Retailer"  means  any  person  engaged  in  the business of selling
 41    tobacco products to ultimate consumers;
 42        (67)  "Sale" means any transfer, exchange, or barter, in any manner or  by
 43    any  means  whatsoever,  for a consideration, and includes and means all sales
                                                                        
                                           2
                                                                        
  1    made by any person. It includes a gift by a person engaged in the business  of
  2    selling  tobacco  products,  for advertising, as a means of evading the provi-
  3    sions of this chapter, or for any other purposes whatsoever;
  4        (78)  "Wholesale sales price" means the established price for which a man-
  5    ufacturer sells a tobacco product to a distributor, exclusive of any  discount
  6    or other reduction;
  7        (89)  "Business"  means  any  trade,  occupation,  activity, or enterprise
  8    engaged in for the purpose of selling or distributing tobacco products in this
  9    state;
 10        (910) "Place of business" means any place where tobacco products are manu-
 11    factured, stored, or kept for the purpose of sale  or  consumption,  including
 12    any vessel, vehicle, airplane, train, or vending machine;
 13        (101) "Retail  outlet"  means  each  place  of business from which tobacco
 14    products are sold to consumers;
 15        (112) "Commission" means the Idaho state tax commission.
                                                                        
 16        SECTION 2.  That Section 63-2552, Idaho Code, be, and the same  is  hereby
 17    amended to read as follows:
                                                                        
 18        63-2552.  TOBACCO PRODUCTS TAX IMPOSED -- RATE. (1) From and after July 1,
 19    1972  2006,  there is levied and there shall be collected a tax upon the sale,
 20    use, consumption, handling, or distribution of all  tobacco  products,  except
 21    moist  snuff,  in this state at the rate of thirty-five per cent forty percent
 22    (3540%) of the wholesale sales price of such tobacco products.
 23        (2)  Such tax shall be imposed at the time the distributor:
 24        (a)  bBrings, or causes to be brought, into this state  from  without  the
 25        state tobacco products for sale,;
 26        (b)  mMakes,  manufactures,  or  fabricates tobacco products in this state
 27        for sale in this state,; or
 28        (c)  sShips or transports tobacco products to retailers in this state,  to
 29        be sold by those retailers.
 30        (2)  A  floor  stocks  tax  is  hereby  imposed  upon every distributor of
 31    tobacco products at the rate of thirty-five per cent (35%)  of  the  wholesale
 32    sales  price of each tobacco product in his possession or under his control on
 33    July 1, 1972.
 34        Each distributor, within twenty (20) days after July 1, 1972, shall file a
 35    report with the commission, in such form  as  the  commission  may  prescribe,
 36    showing  the  tobacco  products on hand on July 1, 1972, and the amount of tax
 37    due thereon.
 38        The tax imposed by this subdivision shall be due and payable within twenty
 39    (20) days after July 1, 1972, and thereafter shall bear interest at  the  rate
 40    of one per cent (1%) per month
 41        (3)  The  revenues  received from the tax imposed by this section  and any
 42    penalties, interest or deficiency additions, shall be distributed by  the  tax
 43    commission as follows:
 44        (a)  An  amount of money shall be distributed to the state refund account,
 45        sufficient to pay current refund claims. All  refunds  authorized  by  the
 46        commission  shall  be  paid  through  the  state refund account, and those
 47        moneys are continuously appropriated.
 48        (b)  From the balance remaining after deduction of the  amounts  in  para-
 49        graph  (a)  of  this subsection, the remaining moneys shall be remitted as
 50        follows:
 51             (i)   Eighty-seven and one-half percent (87.5%) directly to the  gen-
 52             eral fund;
 53             (ii)  Six  and one-quarter percent (6.25%) shall be subject to appro-
                                                                        
                                           3
                                                                        
  1             priation to the public school income fund to be utilized  to  facili-
  2             tate and provide substance abuse programs in the public school system
  3             of  which  amount two hundred fifty thousand dollars ($250,000) shall
  4             be remitted annually to the state police to increase toxicology labo-
  5             ratory capacity in the bureau of forensic services for  drug  testing
  6             of  juveniles.  The  moneys  remitted  to  the  state police shall be
  7             reviewed annually and any money in excess of the operations needs  of
  8             the laboratory for juvenile drug testing will be returned to the pub-
  9             lic  school  income  fund  for substance abuse programs in the public
 10             school system. The laboratory may utilize this  increased  toxicology
 11             capacity for adult drug testing to the extent that timely testing for
 12             juveniles is not adversely impacted.
 13             (iii) Six  and one-quarter percent (6.25%) shall be subject to appro-
 14             priation to the department of juvenile corrections  for  distribution
 15             quarterly  to  the counties to be utilized for county juvenile proba-
 16             tion services, based upon the percentage the population of the county
 17             bears to the population of the state as a whole.
                                                                        
 18        SECTION 3.  That Sections 63-2552A and 63-2564, Idaho Code,  be,  and  the
 19    same are hereby repealed.
                                                                        
 20        SECTION  4.  That  Chapter  25,  Title 63, Idaho Code, be, and the same is
 21    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 22    ignated as Section 63-2552A, Idaho Code, and to read as follows:
                                                                        
 23        63-2552A.  TAX IMPOSED ON MOIST SNUFF -- RATE -- DISTRIBUTION OF TAX REVE-
 24    NUES.  (1)  On and after July 1, 2006, there is levied and there shall be col-
 25    lected a tax upon the sale, use, consumption,  handling,  or  distribution  of
 26    moist  snuff  in  this state at the rate of: (i) one dollar ($1.00) per ounce,
 27    and a proportionate tax at the like rate on all fractional parts of  an  ounce
 28    of  moist  snuff, whose wholesale price is two dollars and fifty cents ($2.50)
 29    or less per ounce; or (ii) at the rate of forty percent (40%) of the wholesale
 30    sales price of such moist snuff if the wholesale price  is  greater  than  two
 31    dollars and fifty cents ($2.50) per ounce. Provided however, each can or pack-
 32    age of moist snuff containing a net weight of less than one (1) ounce of moist
 33    snuff  shall  be  taxed  at the equivalent rate of a can or package containing
 34    moist snuff weighing one (1) ounce if the one dollar  ($1.00)  per  ounce  tax
 35    rate is being used. Such tax shall be imposed at the time the distributor:
 36        (a)  Brings,  or  causes  to  be brought, into this state from without the
 37        state moist snuff for sale;
 38        (b)  Makes, manufactures, or fabricates moist snuff in this state for sale
 39        in this state; or
 40        (c)  Ships or transports moist snuff to retailers in this state to be sold
 41        by those retailers.
 42        (2)  Each distributor, within twenty (20) days after July 1,  2006,  shall
 43    file  a  report  with  the commission, in such form as the commission may pre-
 44    scribe, showing the moist snuff on hand on July 1, 2006, and the amount of tax
 45    due thereon. The tax imposed in this section shall be due and  payable  within
 46    twenty  (20)  days  after  July 1, 2006, and thereafter shall bear interest as
 47    provided in section 63-3045, Idaho Code. If  the  distributor  has  previously
 48    paid  tax  to the state of Idaho upon the moist snuff on hand on July 1, 2006,
 49    the distributor shall pay the tax due pursuant to this section, but  shall  be
 50    entitled  to credit thereon for taxes previously paid on such moist snuff pur-
 51    suant to the law in effect prior to July 1, 2006.
 52        (3)  The revenues received from  the tax collected pursuant to  this  sec-
                                                                        
                                           4
                                                                        
  1    tion  and any deficiency additions, shall be distributed by the state tax com-
  2    mission as follows:
  3        (a)  An amount of money shall be distributed to the state refund  account,
  4        sufficient  to  pay  current  refund claims. All refunds authorized by the
  5        commission shall be paid through  the  state  refund  account,  and  those
  6        moneys are continuously appropriated.
  7        (b)  The  sum  of eight hundred fifty thousand dollars ($850,000) shall be
  8        subject to appropriation by the legislature  to  the  drug  court,  mental
  9        health  court and  family court services fund created in the office of the
 10        state treasurer pursuant to section 1-1625, Idaho Code, to be utilized  by
 11        the supreme court as set forth in that section.
 12        (c)  From  the  balance  remaining after deduction of the amounts in para-
 13        graphs (a) and (b) of this  subsection,  the  remaining  moneys  shall  be
 14        remitted as follows:
 15             (i)   Eighty-seven  and one-half percent (87.5%) directly to the gen-
 16             eral fund;
 17             (ii)  Six and one-quarter percent (6.25%) shall be subject to  appro-
 18             priation  to  the public school income fund to be utilized to facili-
 19             tate and provide substance abuse programs in the public school system
 20             of which amount two hundred fifty thousand dollars  ($250,000)  shall
 21             be remitted annually to the state police to increase toxicology labo-
 22             ratory  capacity  in the bureau of forensic services for drug testing
 23             of juveniles. The moneys  remitted  to  the  state  police  shall  be
 24             reviewed  annually and any money in excess of the operations needs of
 25             the laboratory for juvenile drug testing will be returned to the pub-
 26             lic school income fund for substance abuse  programs  in  the  public
 27             school  system.  The laboratory may utilize this increased toxicology
 28             capacity for adult drug testing to the extent that timely testing for
 29             juveniles is not adversely impacted.
 30             (iii) Six and one-quarter percent (6.25%) shall be subject to  appro-
 31             priation  to  the department of juvenile corrections for distribution
 32             quarterly to the counties to be utilized for county  juvenile  proba-
 33             tion services, based upon the percentage the population of the county
 34             bears to the population of the state as a whole.

Statement of Purpose / Fiscal Impact



                      STATEMENT OF PURPOSE

                           RS 16174C1

The purpose of this legislation is to raise the tax on each
container of  moist snuff to a minimum of $1.00 per ounce and
continue the tax rate of higher priced products at 40% of
wholesale price of such tobacco products.
This legislation will also provide a dedicated revenue source of
funding for drug, family, and mental health courts to be expended
under the jurisdiction of the supreme court. 



                           FISCAL NOTE

This legislation will not impact the state general fund or
funding of other programs.
This change in tax methodology for moist snuff will result in
approximately $850,000 increase in tax revenue.  Likewise, up to
$850,000 will be subject to appropriation to the drug court,
mental health court and family court services fund to be utilized
by the Supreme Court for such purposes pursuant to section 1-
1625, Idaho Code. Present revenues and any future increases in
revenues above $850,000 will be distributed as presently
provided.



Contact
Name: Rep. Lake 
Phone: 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                          H 787