2003 Legislation
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HOUSE BILL NO. 378 – Cigarette tax, increased

HOUSE BILL NO. 378

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H0378..................................................by REVENUE AND TAXATION
CIGARETTE TAX - Amends and adds to existing law to increase the rate of the
cigarette tax to sixty-two cents per package of twenty cigarettes; to revise
the distribution of moneys derived from the tax; to reduce the percentage that
wholesalers are compensated for affixing stamps on packages of cigarettes; to
revise the distribution formula for certain cigarette tax moneys; to provide a
floor stocks tax for packages of cigarettes held in stock by a wholesaler on
June 1, 2003; and to provide when the tax is due and payable.
                                                                        
03/19    House intro - 1st rdg - to printing
03/20    Rpt prt - to Rev/Tax

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-seventh Legislature                 First Regular Session - 2003
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 378
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO TAXATION OF CIGARETTES; AMENDING SECTION 63-2506, IDAHO  CODE,  TO
  3        INCREASE  THE  RATE OF THE CIGARETTE TAX AND TO REVISE THE DISTRIBUTION OF
  4        CERTAIN MONEYS DERIVED FROM THE TAX; AMENDING SECTION 63-2509, IDAHO CODE,
  5        TO REDUCE THE PERCENTAGE THAT WHOLESALERS  ARE  COMPENSATED  FOR  AFFIXING
  6        STAMPS  ON  PACKAGES  OF  CIGARETTES  AND  TO MAKE A TECHNICAL CORRECTION;
  7        AMENDING SECTION 63-2520, IDAHO CODE, TO REVISE THE  DISTRIBUTION  FORMULA
  8        FOR  CERTAIN  CIGARETTE  TAX  MONEYS; AMENDING CHAPTER 25, TITLE 63, IDAHO
  9        CODE, BY THE ADDITION OF A NEW SECTION 63-2531, IDAHO CODE, TO  PROVIDE  A
 10        FLOOR  STOCKS TAX FOR PACKAGES OF CIGARETTES HELD IN STOCK BY A WHOLESALER
 11        ON JUNE 1, 2003, AND TO PROVIDE WHEN THE TAX IS DUE AND PAYABLE; DECLARING
 12        AN EMERGENCY AND PROVIDING EFFECTIVE DATES.
                                                                        
 13    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 14        SECTION 1.  That Section 63-2506, Idaho Code, be, and the same  is  hereby
 15    amended to read as follows:
                                                                        
 16        63-2506.  IMPOSITION  OF  TAX. A tax upon the purchase, storage, use, con-
 17    sumption, handling, distribution or wholesale sale  of  cigarettes  is  hereby
 18    imposed  at  the rate of one and four-tenths cent (1.4) for each cigarette or
 19    twenty-eight sixty-two cents (2862) per package of  twenty  (20)  cigarettes,
 20    which tax shall be paid by the wholesaler, and collected by the state tax com-
 21    mission.  Five  and  three hundred sixty-two thousandths cents (5.362) of the
 22    tax collected per package of twenty (20) cigarettes shall be subject to appro-
 23    priation to the public school income fund to be  utilized  to  facilitate  and
 24    provide  substance abuse programs in the public school system.  Five and three
 25    hundred sixty-two thousandths cents (5.362) of the tax collected per  package
 26    of  twenty (20) cigarettes shall be subject to appropriation to the department
 27    of juvenile corrections for distribution to the counties to  be  utilized  for
 28    county  juvenile  probation  services. Appropriated funds shall be distributed
 29    quarterly to the counties based upon the  percentage  the  population  of  the
 30    county  bears  to the population of the state as a whole. The remaining moneys
 31    collected and those moneys not appropriated under the provisions of this  sec-
 32    tion shall be distributed as specified in section  63-2520, Idaho Code.
                                                                        
 33        SECTION  2.  That  Section 63-2509, Idaho Code, be, and the same is hereby
 34    amended to read as follows:
                                                                        
 35        63-2509.  COMPENSATION FOR AFFIXING STAMPS. Wholesalers shall  be  allowed
 36    as compensation for affixing stamps, five per cent two and four-tenths percent
 37    (52.4%) of the face value of the stamps purchased by them.
                                                                        
 38        SECTION  3.  That  Section 63-2520, Idaho Code, be, and the same is hereby
 39    amended to read as follows:
                                                                        
                                           2
                                                                        
  1        63-2520.  DISTRIBUTION OF MONEYS COLLECTED.  Revenues  received  from  the
  2    taxes  imposed  by this chapter, and any revenues received from licenses, per-
  3    mits, penalties, interest, or deficiency additions, shall  be  distributed  by
  4    the tax commission as follows:
  5        (a)  An  amount  of money shall be distributed to the state refund account
  6    sufficient to pay current refund claims. All  refunds  authorized  under  this
  7    chapter  by the commission shall be paid through the state refund account, and
  8    those moneys are continuously appropriated.
  9        (b)  The balance remaining with the state treasurer  after  deducting  the
 10    amount described in paragraph (a) above shall be distributed as follows:
 11        (1)  43.3%  Sixteen  and thirteen-hundredths percent (16.13%) of such bal-
 12        ance shall be distributed to the permanent  building  account  created  by
 13        section 57-1108, Idaho Code.
 14        (2)  1%  Three hundred and seventy-six thousandths of one percent (0.376%)
 15        of such balance  shall  be  distributed  to  the  central  tumor  registry
 16        account.  The amount of money so distributed to the central tumor registry
 17        account shall not exceed the fiscal year's appropriation, and at such time
 18        as the appropriation has been distributed to the  central  tumor  registry
 19        account  during  any  fiscal year, all such distributions in excess of the
 20        appropriation shall be made instead to the general fund of  the  state  of
 21        Idaho.
 22        (3)  2.5%  Nine  hundred and forty-two thousandths of one percent (0.942%)
 23        of such balance shall be distributed to the cancer control account created
 24        by section 57-1702, Idaho Code. Revenues received in  the  cancer  control
 25        account shall be paid over to the state treasurer by the state tax commis-
 26        sion to be distributed as follows:
 27             (i)   Such amounts as are appropriated for purposes specified in sec-
 28             tion 57-1702, Idaho Code, shall be expended as appropriated;
 29             (ii)  Any  balance remaining in the cancer control account on June 30
 30             of any fiscal year after the amounts withdrawn by appropriation  have
 31             been  deducted, shall be reserved for transfer to the general fund on
 32             July 1 and the state controller shall order such transfer.
 33        (4)  All remaining moneys shall be distributed to the general fund of  the
 34        state of Idaho.
                                                                        
 35        SECTION  4.  That  Chapter  25,  Title 63, Idaho Code, be, and the same is
 36    hereby amended by the addition thereto of a NEW SECTION, to be known and  des-
 37    ignated as Section 63-2531, Idaho Code, and to read as follows:
                                                                        
 38        63-2531.  FLOOR  STOCKS TAX. (1) In addition to the tax imposed by section
 39    63-2506, Idaho Code, there is hereby imposed a one (1) time tax at the rate of
 40    thirty-four cents (34) per package of twenty (20)  cigarettes  on  all  ciga-
 41    rettes  to  which  stamps  have  been affixed and which are held in stock by a
 42    wholesaler at 12:01 a.m. on June 1, 2003.
 43        (2)  The tax imposed by this section shall be due and payable to the state
 44    tax commission on the due date of the cigarette  tax  return  due  under  this
 45    chapter and shall be reported on such return.  The tax shall be subject to all
 46    the collection, enforcement and administrative provisions of this chapter.
                                                                        
 47        SECTION  5.  An  emergency  existing  therefor,  which emergency is hereby
 48    declared to exist, Sections 1, 2 and 4 of this  act shall be in full force and
 49    effect on and after June 1, 2003. Section 3 of this act shall be in full force
 50    and effect on and after July 1, 2003.

Statement of Purpose / Fiscal Impact


                     STATEMENT  OF  PURPOSE
                            RS 13175
This legislation increases the cigarette tax rate from $0.28 per 20
cigarette pack to $0.62 per 20 cigarette pack effective June 1,
2003. It makes adjustments to the distribution formula to cause all
additional net revenue generated by this rate increase to go to the
General Fund, while holding all other recipients of cigarette tax
distributions harmless. The compensation for affixing stamps is
reduced from 5% to 2.4%.






                         FISCAL  IMPACT
Increases General Fund revenue $28.7 million beginning in FY 2004.




CONTACT   
Name:     Brian Whitlock
Agency:   Office of the Governor
Phone: 334-2100

Statement of Purpose/Fiscal Impact                                       H 378