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H0135..................................................by REVENUE AND TAXATION
CIGARETTE SALES - TAX - Amends existing law to apply the cigarette tax to all
sales except to members of an Indian tribe on an Indian reservation; and to
establish a deduction for the exemption against the cigarette tax.
01/30 House intro - 1st rdg - to printing
01/31 Rpt prt - to Rev/Tax
03/11 Rpt out - rec d/p - to 2nd rdg
03/12 2nd rdg - to 3rd rdg
03/14 3rd rdg - FAILED - 32-38-0
AYES -- Barraclough, Bedke, Bell, Block, Bolz, Bradford, Collins, Cuddy,
Denney, Ellsworth, Field(18), Field(23), Gagner, Garrett, Harwood, Lake,
Langford, McGeachin, McKague, Meyer, Moyle, Ring, Roberts, Sali,
Schaefer, Smith(24), Smylie, Snodgrass, Stevenson, Tilman, Wood, Mr.
Speaker
NAYS -- Andersen, Barrett, Bauer, Bieter, Black, Boe, Campbell, Cannon,
Clark, Crow, Deal, Douglas, Eberle, Edmunson, Eskridge, Henbest, Jaquet,
Jones, Kellogg, Kulczyk, Langhorst(Wallace), Martinez, Miller, Mitchell,
Naccarato, Nielsen, Raybould, Ridinger, Ringo, Robison, Rydalch, Sayler,
Shepherd, Shirley, Skippen, Smith(30), Trail, Wills
Absent and excused -- None
Floor Sponsor - Denney
Filed w/Office of the Chief Clerk
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 135
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO THE APPLICATION OF THE CIGARETTE TAX ON INDIAN RESERVATIONS; PRO-
3 VIDING LEGISLATIVE INTENT; AMENDING SECTION 63-2501, IDAHO CODE, TO APPLY
4 THE CIGARETTE TAX TO USE OR CONSUMPTION OF CIGARETTES; AND AMENDING SEC-
5 TION 63-2506, IDAHO CODE, TO APPLY THE CIGARETTE TAX TO ALL SALES EXCEPT
6 TO MEMBERS OF AN INDIAN TRIBE ON AN INDIAN RESERVATION AND TO ESTABLISH A
7 DEDUCTION METHOD AGAINST CIGARETTE TAXES FOR THE EXEMPTION.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. LEGISLATIVE INTENT. It is the intent of this act to eliminate
10 unfair competitive business advantages now enjoyed by Indian tobacco retailers
11 in direct competition with non-Indian businesses. This advantage arises
12 because the Legislature of the State of Idaho in the past has not exercised
13 its full constitutional authority to require that Indian enterprises collect
14 and remit state cigarette taxes in regard to sales made to non-Indian custom-
15 ers. In enacting this act, the Legislature intends to exercise the full
16 extent of the state's constitutional power to require that cigarettes sold to
17 non-Indian purchasers on an Indian reservation must have an Idaho cigarette
18 tax stamp affixed, even if sold by an Indian or an Indian enterprise.
19 SECTION 2. That Section 63-2501, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 63-2501. PURPOSE. It is the intent and purpose of this act to levy a tax
22 on all cigarettes sold, used, consumed, handled or distributed or purchased
23 for any purpose other than resale in the regular course of business, within
24 this state, and to precollect the tax from the person who first sells, uses,
25 consumes receives, handles, or distributes the cigarettes.
26 SECTION 3. That Section 63-2506, Idaho Code, be, and the same is hereby
27 amended to read as follows:
28 63-2506. IMPOSITION OF TAX. (1) A tax upon the purchase, storage, use,
29 for any purpose other than resale in the regular course of business, consump-
30 tion, handling, distribution or wholesale sale or use of cigarettes is hereby
31 imposed at the rate of one and four-tenths cent (1.4) for each cigarette or
32 twenty-eight cents (28) per package of twenty (20) cigarettes, which tax
33 shall be precollected and paid by the wholesaler, and collected by the state
34 tax commission. Five cents (5) of the tax collected per package of twenty
35 (20) cigarettes shall be subject to appropriation to the public school income
36 fund to be utilized to facilitate and provide substance abuse programs in the
37 public school system. Five cents (5) of the tax collected per package of
38 twenty (20) cigarettes shall be subject to appropriation to the department of
39 juvenile corrections for distribution to the counties to be utilized for
40 county juvenile probation services. Appropriated funds shall be distributed
2
1 quarterly to the counties based upon the percentage the population of the
2 county bears to the population of the state as a whole. The remaining moneys
3 collected and those moneys not appropriated under the provisions of this sec-
4 tion shall be distributed as specified in section 63-2520, Idaho Code.
5 (2) The tax imposed by this section shall not apply to cigarettes sold by
6 a wholesaler to an Indian retailer solely for resale within the boundaries of
7 an Indian reservation located in Idaho to members of a federally recognized
8 Indian tribe. Any cigarettes which are nontaxable under this subsection are
9 required to have affixed the cigarette stamps required by this chapter.
10 (3) Wholesalers making sales of cigarettes to Indian retailers located on
11 an Indian reservation located in Idaho may apply to the commission for an
12 authorization to deduct on its cigarette tax return taxes paid on cigarettes
13 sold by the retailers to members of an Indian tribe. The claim for any such
14 deduction must be made by the wholesaler and approved by the commission before
15 the cigarettes are sold by the wholesaler to the retailer. If not so claimed
16 the deduction shall be lost.
17 (4) The total amount of the deduction allowed by the commission to all
18 wholesalers claiming a deduction under subsection (3) of this section for any
19 reporting period shall not exceed an amount which is equal to the cigarette
20 tax on the average annual allocated consumption of cigarettes for all Indian
21 tribes located in Idaho. The allocated number of cigarettes for each feder-
22 ally recognized Indian tribe shall be determined by multiplying the tribal
23 service area population as determined by the bureau of Indian affairs by the
24 greater:
25 (a) The national cigarette consumption per capita average, as compiled
26 for the most recently completed calendar or fiscal year by the U.S.
27 department of health and human services or other reliable source of data
28 as determined by the state tax commission; or
29 (b) The cigarette consumption per capita average for a federally recog-
30 nized Indian tribe, as compiled for the most recently completed calendar
31 year.
32 (5) No deduction shall be allowed to a wholesaler, unless the wholesaler
33 certifies to the commission that the economic benefit of the deduction has
34 been passed by it to the retailers to whom the sales were made.
35 (6) As used in this section, the term "Indian reservation" means Indian
36 lands federally declared to be reservations because they are reserved for
37 Indian tribes by treaty between Indian tribes and any territorial governments,
38 state governments or the United States government; or established by acts of
39 the United States congress; or established by formal decision of the executive
40 branch of the United States.
41 (7) As used in this section, the term "Indian retailer" means only a
42 business or enterprise which is wholly owned and operated by an Idaho Indian
43 tribe identified in section 67-4001, Idaho Code, or a business or enterprise
44 which is wholly owned and operated by one (1) or more members of the tribe and
45 is licensed by the tribe on whose reservation the business or enterprise is
46 located.
STATEMENT OF PURPOSE
RS 12725
The purpose of this legislation is as follows: To require a
cigarette revenue stamp be affixed to each pack of cigarettes
sold in Idaho. To impose a tax to be pre-collected on all
cigarettes sold in Idaho. To designate responsibility for tax
collection. To provide for remittance of cigarette tax to the
State of Idaho. To allow Tribal members their federally
protected rights to not be taxed for cigarettes they purchase on
reservations for their personal consumption. This proposed
legislation eliminates unfair competitive advantages now enjoyed
by Tribal tobacco retailers in direct competition with non-Tribal
businesses operating in Idaho.
FISCAL IMPACT
Increased revenues (based on sale of 50 million packs)after ten
cents per pack is removed for substance abuse programs is
estimated to be as follows:
Permanent Building fund 43.30% $3.897 million
Central Tumor Registry 1.00% $90 thousand
Cancer Control Account 2.50% $225 thousand
State General Fund 53.20% $4.788 million
Contact
Name: Representative Denney
Phone:(208) 332-1000
Name: Don Pischner
Phone: (208) 667-5770
STATEMENT OF PURPOSE/FISCAL NOTE H 135