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H0609...............................................by REVENUE AND TAXATION
MOIST SNUFF - TAX - Amends existing law to provide that moist snuff shall
be taxed at the rate of seventy-six cents per ounce; and to provide for
distribution of the tax revenues effective January 1, 2001.
02/18 House intro - 1st rdg - to printing
02/21 Rpt prt - to Rev/Tax
02/28 Rpt out - rec d/p - to 2nd rdg
02/29 2nd rdg - to 3rd rdg
03/02 3rd rdg - PASSED - 34-33-3
AYES -- Barrett, Bruneel, Chase, Clark, Crow, Cuddy, Deal, Field(13),
Field(20), Geddes, Hansen(29), Henbest, Jaquet, Jones, Judd, Kellogg,
Kempton, Kunz, Linford, Marley, McKague, Meyer, Pomeroy, Ridinger,
Ringo, Sali, Sellman, Shepherd, Stoicheff, Stone, Taylor, Tilman,
Trail, Zimmermann
NAYS -- Alltus, Barraclough, Bell, Bieter, Black, Boe, Callister,
Campbell, Cheirrett, Denney, Ellsworth, Gagner, Hadley, Hammond,
Hansen(23), Hornbeck, Kendell, Lake, Loertscher, Mader, Mortensen,
Moss, Moyle, Pearce, Pischner, Reynolds, Robison, Schaefer(Tiegs),
Smith, Smylie, Stevenson, Wheeler, Wood
Absent and excused -- Gould, Montgomery, Mr Speaker
Floor Sponsor - Cuddy
Title apvd - to Senate
03/03 Senate intro - 1st rdg - to Loc Gov
H0609
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 609
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 PROVIDE A DEFINITION OF "MOIST SNUFF"; AMENDING
4 SECTION 63-2552, IDAHO CODE, TO EXCLUDE MOIST SNUFF FROM TAXATION AT AN AD
5 VALOREM RATE OF TAXATION AND TO MAKE A TECHNICAL CORRECTION; AMENDING SEC-
6 TION 63-2552A, IDAHO CODE, TO EXCLUDE MOIST SNUFF FROM TAXATION AT AN AD
7 VALOREM RATE OF TAXATION AND TO MAKE TECHNICAL CORRECTIONS; AMENDING CHAP-
8 TER 25, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-2552B,
9 IDAHO CODE, TO PROVIDE THAT MOIST SNUFF SHALL BE TAXED AT THE RATE OF
10 SEVENTY-SIX CENTS PER OUNCE OF MOIST SNUFF AND TO PROVIDE FOR DISTRIBUTION
11 OF THE TAX REVENUES; AMENDING SECTION 63-2553, IDAHO CODE, TO PROVIDE LEG-
12 ISLATIVE INTENT TO LEVY A TAX ON MOIST SNUFF AND TO MAKE A TECHNICAL COR-
13 RECTION; AND PROVIDING AN EFFECTIVE DATE.
14 Be It Enacted by the Legislature of the State of Idaho:
15 SECTION 1. That Section 63-2551, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 63-2551. TOBACCO PRODUCTS TAX -- DEFINITIONS. As used in this act:
18 (1) "Tobacco products" shall mean any cigars, cheroots, stogies, smoking
19 tobacco (including granulated, plug, cut, crimp cut, ready rubbed and any
20 other kinds and forms of tobacco suitable for smoking in a pipe or cigarette),
21 chewing tobacco (including cavendish, twist, plug, scrap and any other kinds
22 and forms of tobacco suitable for chewing) and snuff, however prepared; and
23 shall include any other articles or products made of tobacco or any substitute
24 therefor, except cigarettes;
25 (2) "Moist snuff" means any finely cut, ground or powdered tobacco
26 intended to be placed in the oral cavity, but not including dry snuff;
27 (3) "Manufacturer" means a person who manufactures and sells tobacco
28 products;
29 (34) "Distributor" means (a) any person engaged in the business of sell-
30 ing tobacco products in this state who brings, or causes to be brought, into
31 this state from without the state any tobacco products for sale, (b) any per-
32 son who makes, manufactures, or fabricates tobacco products in this state for
33 sale in this state, (c) any person engaged in the business of selling tobacco
34 products without this state who ships or transports tobacco products to
35 retailers in this state, to be sold by those retailers;
36 (45) "Subjobber" means any person, other than a manufacturer or distribu-
37 tor, who buys tobacco products from a distributor and sells them to persons
38 other than the ultimate consumers;
39 (56) "Retailer" means any person engaged in the business of selling
40 tobacco products to ultimate consumers;
41 (67) "Sale" means any transfer, exchange, or barter, in any manner or by
42 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, tThere is levied and there shall be collected a tax upon the sale, use,
20 consumption, handling, or distribution of all tobacco products, except moist
21 snuff, in this state at the rate of thirty-five per cent percent (35%) of the
22 wholesale sales price of such tobacco products. Such tax shall be imposed at
23 the time the distributor (a) brings, or causes to be brought, into this state
24 from without the state tobacco products for sale, (b) makes, manufactures, or
25 fabricates tobacco products in this state for sale in this state, or (c) ships
26 or transports tobacco products to retailers in this state, to be sold by those
27 retailers.
28 (2) A floor stocks tax is hereby imposed upon every distributor of
29 tobacco products at the rate of thirty-five per cent (35%) of the wholesale
30 sales price of each tobacco product in his possession or under his control on
31 July 1, 1972.
32 Each distributor, within twenty (20) days after July 1, 1972, shall file a
33 report with the commission, in such form as the commission may prescribe,
34 showing the tobacco products on hand on July 1, 1972, and the amount of tax
35 due thereon.
36 The tax imposed by this subdivision shall be due and payable within twenty
37 (20) days after July 1, 1972, and thereafter shall bear interest at the rate
38 of one per cent (1%) per month.
39 SECTION 3. That Section 63-2552A, Idaho Code, be, and the same is hereby
40 amended to read as follows:
41 63-2552A. ADDITIONAL TOBACCO PRODUCTS TAX IMPOSED -- RATE. (1) In addi-
42 tion to the tax imposed in section 63-2552, Idaho Code, from and after July 1,
43 1994, there is levied and there shall be collected an additional tax upon the
44 sale, use, consumption, handling, or distribution of all tobacco products,
45 except moist snuff, in this state at the rate of five per cent percent (5%) of
46 the wholesale sales price of such tobacco products. Such tax shall be imposed
47 at the time the distributor:
48 (a) Brings, or causes to be brought, into this state from without the
49 state tobacco products for sale;
50 (b) Makes, manufactures, or fabricates tobacco products in this state for
51 sale in this state; or
3
1 (c) Ships or transports tobacco products to retailers in this state to be
2 sold by those retailers.
3 (2) Each distributor, within twenty (20) days after July 1, 1994, shall
4 file a report with the commission, in such form as the commission may pre-
5 scribe, showing the tobacco products on hand on July 1, 1994, and the amount
6 of tax due thereon. The tax imposed in this subsection shall be due and pay-
7 able within twenty (20) days after July 1, 1994, and thereafter shall bear
8 interest at the rate of one per cent (1%) per month.
9 (3) Fifty per cent percent (50%) of the tax collected pursuant to this
10 section shall be subject to appropriation to the public school income fund to
11 be utilized to facilitate and provide substance abuse programs in the public
12 school system of which amount two hundred fifty thousand dollars ($250,000)
13 shall be remitted annually to the department of law enforcement to increase
14 toxicology lab capacity in the bureau of forensic services for drug testing of
15 juveniles, and fifty per cent percent (50%) shall be subject to appropriation
16 to the department of juvenile corrections for distribution quarterly to the
17 counties to be utilized for county juvenile probation services, based upon the
18 percentage the population of the county bears to the population of the state
19 as a whole. The moneys remitted to the department of law enforcement shall be
20 reviewed annually and any money excess to the operations needs of the labora-
21 tory for juvenile drug testing will be returned to the public school income
22 fund for substance abuse programs in the public school system. The laboratory
23 may utilize this increased toxicology capacity for adult drug testing to the
24 extent that timely testing for juveniles is not adversely impacted.
25 SECTION 4. That Chapter 25, Title 63, Idaho Code, be, and the same is
26 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
27 ignated as Section 63-2552B, Idaho Code, and to read as follows:
28 63-2552B. TAX IMPOSED ON MOIST SNUFF -- RATE -- DISTRIBUTION OF TAX REVE-
29 NUES. (1) From and after January 1, 2001, there is hereby levied and there
30 shall be collected a tax upon the sale, use, consumption, handling or distri-
31 bution of moist snuff, in this state at the rate of seventy-six cents (76)
32 per ounce, and a proportionate tax at the like rate on all fractional parts of
33 an ounce, of moist snuff. Such tax shall be imposed at the time the distribu-
34 tor:
35 (a) Brings, or causes to be brought, into this state from without the
36 state moist snuff for sale;
37 (b) Makes, manufactures or fabricates moist snuff in this state for sale
38 in this state; or
39 (c) Ships or transports moist snuff to retailers in this state to be sold
40 by those retailers.
41 (2) Each distributor, within twenty (20) days after January 1, 2001,
42 shall file a report with the commission, in such form as the commission may
43 prescribe, showing the moist snuff on hand on January 1, 2001, and the amount
44 of tax due thereon. The tax imposed in this subsection shall be due and pay-
45 able within twenty (20) days after January 1, 2001, and thereafter shall bear
46 interest as provided in section 63-3045, Idaho Code. If the distributor has
47 previously paid tax to the state of Idaho upon the moist snuff on hand on Jan-
48 uary 1, 2001, the distributor shall pay the tax due pursuant to this section,
49 but shall be entitled to credit thereon for taxes previously paid on such
50 moist snuff pursuant to the law in effect prior to January 1, 2001.
51 (3) The revenues received from the tax imposed by this section and any
52 penalties, interest, or deficiency additions, shall be distributed by the tax
53 commission as follows:
4
1 (a) An amount of money shall be distributed to the state refund account,
2 sufficient to pay current refund claims. All refunds authorized by the
3 commission shall be paid through the state refund account, and those
4 moneys are continuously appropriated.
5 (b) From the balance remaining with the state treasurer after deducting
6 the amounts in paragraph (a) of this subsection, the remaining moneys
7 shall be remitted as follows:
8 (i) Eighty-seven and one-half percent (87.5%) directly to the water
9 pollution control account established in chapter 36, title 39, Idaho
10 Code, and shall be remitted to that account periodically, but no less
11 frequently than quarterly. Provided however, in the event that the
12 water pollution control account shall no longer be in existence,
13 then, and in that event, said percentage shall be remitted to the
14 general fund;
15 (ii) Six and one-quarter percent (6.25%) shall be subject to appro-
16 priation to the public school income fund to be utilized to facili-
17 tate and provide substance abuse programs in the public school system
18 of which amount two hundred fifty thousand dollars ($250,000) shall
19 be remitted annually to the department of law enforcement to increase
20 toxicology lab capacity in the bureau of forensic services for drug
21 testing of juveniles. The moneys remitted to the department of law
22 enforcement shall be reviewed annually and any money excess to the
23 operations needs of the laboratory for juvenile drug testing will be
24 returned to the public school income fund for substance abuse pro-
25 grams in the public school system. The laboratory may utilize this
26 increased toxicology capacity for adult drug testing to the extent
27 that timely testing for juveniles is not adversely impacted.
28 (iii) Six and one-quarter percent (6.25%) shall be subject to appro-
29 priation to the department of juvenile corrections for distribution
30 quarterly to the counties to be utilized for county juvenile proba-
31 tion services, based upon the percentage the population of the county
32 bears to the population of the state as a whole.
33 SECTION 5. That Section 63-2553, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 63-2553. LEGISLATIVE INTENT. It is the intent and purpose of this chapter
36 to levy a tax on all tobacco products, including moist snuff, sold, used, con-
37 sumed, handled, or distributed within this state and to collect the tax from
38 the distributor as defined in section 63-2551, Idaho Code. It is the further
39 intent and purpose of this chapter to impose the tax only once but nothing in
40 this chapter shall be construed to exempt any person taxable under any other
41 law or under any other tax imposed by the state of Idaho.
42 SECTION 6. This act shall be in full force and effect on and after Janu-
43 ary 1, 2001.
STATEMENT OF PURPOSE
RS 10026
This legislation applies a weight - based tax, rather than an ad valorem, to all moist snuff
tobacco products. The weight - based tax will provide an equal tax on all moist snuff products
and will create an easier mechanism for Idaho distributors to assess and collect taxes.
Currently, other tobacco products (OTP) are taxed upon an ad valorem basis. The new
section provides for a move from an ad valorem tax to a flat weight - based tax on moist snuff
products. Under the ad valorem tax, premium products are taxed at a higher rate than products
that sell at a lower price. As a result less tax is collected by the state on price - value products.
Under the weight - based tax proposed in this legislation, the tax on premium products will
remain the same, and price - value products will be taxed at an equal rate. Changing to a weight -
based tax will ensure equal taxation among moist snuff products and create an easier method of
tax application for Idaho distributors.
FISCAL IMPACT
This bill will have no impact on the general fund. This bill is designed to be revenue neutral,
however, based on current information, a $125,000 to $150,000 increase in taxes collected
for dedicated funds is expected.
Contact
Name: Bob Wells / Jeremy P. Pisca
UST Public Affairs
Phone: 395-0858 / 336-7930
STATEMENT OF PURPOSE / FISCAL NOTE H 609