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H0405..................................................by REVENUE AND TAXATION
TAX - SOFT DRINKS - Adds to existing law to provide an excise tax on soft
drinks, with the revenue distributed to the General Fund.
04/03 House intro - 1st rdg - to printing
Rpt prt - to Rev/Tax
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 405
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION OF SOFT DRINKS; AMENDING TITLE 63, IDAHO CODE, BY THE
3 ADDITION OF A NEW CHAPTER 47, TITLE 63, IDAHO CODE, TO DEFINE TERMS, TO
4 LEVY AND IMPOSE AN EXCISE TAX ON BOTTLED SOFT DRINKS, SYRUPS AND DRY MIX-
5 TURES, TO PROVIDE FOR THE AFFIXING OF TAX STAMPS OR TAX CROWNS, TO PROVIDE
6 FOR CANCELLATION AND REMOVAL OF STAMPS, TO PROVIDE FOR DISPOSITION OF
7 UNUSED TAX CROWNS AND FOR PENALTIES, TO PROVIDE FOR PURCHASE OF TAX STAMPS
8 OR TAX CROWNS, TO PROVIDE FOR DUE DATE OF REPORTS, TO PROVIDE FOR DELIN-
9 QUENT TAXPAYERS AND ADMINISTRATION AND ENFORCEMENT, TO PROVIDE FOR SEIZURE
10 AND SALE OF SOFT DRINK SYRUPS BY THE STATE TAX COMMISSION, TO PROVIDE PEN-
11 ALTIES FOR ALTERING, COUNTERFEITING OR REUSING TAX STAMPS OR TAX CROWNS
12 AND TO PROVIDE FOR DISTRIBUTION OF MONEYS.
13 Be It Enacted by the Legislature of the State of Idaho:
14 SECTION 1. That Title 63, Idaho Code, be, and the same is hereby amended
15 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
16 ter 47, Title 63, Idaho Code, and to read as follows:
17 CHAPTER 47
18 SOFT DRINKS TAX
19 63-4701. DEFINITIONS. As used in this chapter:
20 (1) "Bottled soft drinks" shall include any and all nonalcoholic bever-
21 ages, whether carbonated or not, such as soda water, ginger ale, coca-cola,
22 lime cola, pepsi-cola, dr pepper, root beer, carbonated water, orangeade,
23 lemonade, fruit juice when any plain or carbonated water, flavoring or syrup
24 is added, or any and all preparations commonly referred to as "soft drinks" of
25 whatever kind, which are closed and sealed in glass, paper, or any other type
26 of container, envelope, package or bottle, whether manufactured with or with-
27 out the use of any syrup. The term "bottled soft drinks" shall not include
28 fluid milk to which no flavoring has been added, or natural undiluted fruit
29 juice or vegetable juice.
30 (2) "Commission" means the state tax commission, and where the meaning of
31 the context requires, all deputies and employees duly authorized by it.
32 (3) "Distributor" shall mean any person who manufactures, bottles, pro-
33 duces or purchases for sale to retail dealers any bottled soft drink or soft
34 drink syrup.
35 (4) "Natural undiluted fruit juice" shall mean the liquid resulting from
36 the pressing of fruit with or without sweetener being added, or the liquid
37 resulting from the reconstitution of natural fruit juice concentrate by the
38 restoration of water to dehydrated natural fruit juice with or without
39 sweetener being added.
40 (5) "Natural undiluted vegetable juice" shall mean the liquid resulting
41 from the pressing of vegetables with or without sweetener being added or the
42 liquid resulting from the reconstitution of natural vegetable juice concen-
2
1 trate by the restoration of water to dehydrated natural vegetable juice with
2 or without sweetener being added.
3 (6) "Person" shall mean and include an individual, firm, partnership,
4 association or corporation.
5 (7) "Retail dealer" includes every person other than a wholesale dealer
6 mixing, making, compounding or manufacturing any drink from a soft drink syrup
7 or powder base, or a person selling such syrup or powder.
8 (8) "Simple syrup" shall mean the making, mixing, compounding or manufac-
9 turing, by dissolving sugar and water or any other mixtures that will create
10 simple syrup to which may or may not be added concentrates or extracts.
11 (9) "Soft drink syrups and powders" shall include the compound mixture or
12 the basic ingredients, whether dry or liquid, practically and commercially
13 usable in making, mixing or compounding soft drinks by the mixing thereof with
14 carbonated or plain water, ice, fruit, milk or any other product suitable to
15 make a soft drink, among such syrups being such products as coca-cola syrup,
16 cherry cola syrup, vanilla cola syrup, pepsi-cola syrup, dr pepper syrup, root
17 beer syrup, nu-grape syrup, lemon syrup, vanilla syrup, chocolate syrup,
18 cherry smash syrup, rock candy syrup, simple syrup, chocolate drink powder,
19 malt drink powder, or any other prepared syrups or powders sold or used for
20 the purpose of mixing soft drinks commercially at soda fountains, restaurants
21 or similar places as well as those powder bases prepared for the purpose of
22 domestically mixing soft drinks such as kool-aid and all other similar prod-
23 ucts.
24 (10) "Sweetener" shall mean sugar only, artificial or natural, which sin-
25 gularly flavors the taste of a natural undiluted fruit juice or natural
26 undiluted vegetable juice.
27 (11) "Wholesale dealer" includes only those persons who sell any bottled
28 soft drink or soft drink syrup to retail dealers for the purpose of resale.
29 63-4702. EXCISE TAX ON BOTTLED SOFT DRINKS, SYRUPS AND DRY MIXTURES --
30 DISPOSITION THEREOF. An excise tax is hereby levied and imposed upon the
31 sale, use, handling or distribution of all bottled soft drinks and all soft
32 drink syrups, whether manufactured within or without this state, as follows:
33 (1) On each bottled soft drink, a tax of one cent (1) on each twelve
34 (12) fluid ounces, or fraction thereof.
35 (2) On each gallon of soft drink syrup, a tax of one dollar ($1.00), and
36 in like ratio on each part gallon thereof.
37 (3) On each ounce by weight of dry mixture or fraction thereof used for
38 making soft drinks, a tax of one cent (1).
39 Any person manufacturing or producing within this state any bottled soft
40 drink or soft drink syrup for sale within this state and any distributor,
41 wholesale dealer or retail dealer or any other person who is the original con-
42 signee of any bottled soft drink or soft drink syrup manufactured or produced
43 outside this state, or who brings such drinks or syrups into this state, shall
44 be liable for the excise tax hereby imposed. The excise tax hereby imposed
45 shall not be collected more than once in respect to any bottled soft drink or
46 soft drink syrup manufactured, sold, used or distributed in this state.
47 63-4703. AFFIXING OF TAX STAMPS OR TAX CROWNS. The payment of the taxes
48 herein provided shall be evidenced by the affixing of soft drink tax stamps or
49 tax crowns to the original containers or bottles in which any bottled soft
50 drink or syrup is placed, received, stored or handled. Such stamps or crowns,
51 of the appropriate denomination, shall be affixed to each container of syrup
52 and to each bottled soft drink by the person who, under the provisions of this
53 chapter, is first required to pay the tax thereon, within twenty-four (24)
3
1 hours after such person has such bottled soft drink or syrup in his possession
2 for the first time. The provisions of this section shall not apply to syrup
3 used by bottlers in the manufacture of bottled soft drinks, or to bottled soft
4 drinks or syrups which are transported through this state and which are not
5 sold, delivered, used or stored herein, if transported in accordance with such
6 rules as may be promulgated by the commission, or to any bottled drink or
7 syrup which is manufactured in this state and sold to a purchaser outside this
8 state. Except as otherwise provided in this section, it shall be unlawful for
9 any person to sell, use, handle or distribute any bottled soft drink or soft
10 drink syrup to which the tax stamps or tax crowns required by this section are
11 not affixed, and any person who shall violate this provision shall be guilty
12 of a misdemeanor and, upon conviction thereof, shall be punished by a fine of
13 not less than one hundred dollars ($100) nor more than five hundred dollars
14 ($500), or by imprisonment for not more than six (6) months, or by both such
15 fine and imprisonment.
16 63-4704. CANCELLATION AND REMOVAL OF STAMPS. Any person subject to the
17 tax imposed by this chapter who affixes a soft drink stamp to a container
18 shall be required to immediately cancel the stamp by writing or marking ini-
19 tials thereon and the date upon which the stamp was affixed. When any con-
20 tainer to which a stamp has been affixed is emptied, the person emptying the
21 same or on whose behalf the same has been emptied shall be required to immedi-
22 ately remove or deface the tax stamp thereon.
23 63-4705. DISPOSITION OF UNUSED CROWNS -- PENALTY FOR VIOLATION. Unused
24 tax crowns upon which the tax imposed by this article has not been paid and
25 which the original purchaser has not used and does not intend to use, and
26 which are fit for use, shall be disposed of in the following manner only:
27 (1) By returning same to the manufacturer thereof and receiving from such
28 manufacturer a certificate which shall indicate the name of the person return-
29 ing the crowns, the date of return and the number and denominations of crowns
30 returned; or
31 (2) By transferring such crowns to any person and receiving in exchange
32 therefor a certificate issued by the commission authorizing the transferee to
33 acquire such crowns.
34 Upon receipt of either such certificate the commission shall credit the
35 account of the original purchaser in the amount indicated by the certificate.
36 In the event of the disposition of such crowns in a manner not authorized by
37 this section, the original purchaser thereof or his estate, and/or any person,
38 whether acting in an official capacity or otherwise, who shall make such unau-
39 thorized disposition shall be liable for the amount of tax which the crowns
40 represent; and, in addition, shall be guilty of a misdemeanor and, upon con-
41 viction thereof, shall be punished by a fine of five thousand dollars ($5,000)
42 and imprisonment in the county jail for not less than sixty (60) days nor more
43 than one (1) year, in the discretion of the court.
44 63-4706. PURCHASE OF TAX STAMPS OR TAX CROWNS -- DISCOUNTS AND COMMIS-
45 SIONS -- REFUNDS. (1) The commission is hereby authorized to promulgate rules
46 governing the design, purchase, sale and distribution of tax stamps and tax
47 crowns required by this chapter. Manufacturers or distributors of crowns may
48 be required to furnish bond to ensure faithful compliance with such rules. Any
49 person desiring to purchase such crowns shall obtain from the commission an
50 authorization to do so, which shall specify the number of crowns to be pur-
51 chased, and upon shipment thereof the manufacturer shall transmit to the com-
52 mission a copy of the invoice of such shipment. The commission shall not
4
1 authorize the purchase of crowns by any person who is in default in the pay-
2 ment of any tax required by this chapter.
3 (2) The commission shall sell the stamps required by this chapter, or may
4 authorize any sheriff, or any bank, savings and loan association or credit
5 union in this state, to sell such stamps and the commission may allow a fee of
6 one-half of one percent (.5%) of the face value of all stamps sold by such
7 entity. In the sale of such stamps the commission shall allow the following
8 discounts: on a sale of less than twenty-five dollars ($25.00), no discount;
9 on a sale of twenty-five dollars ($25.00) or over and less than fifty dollars
10 ($50.00), a discount of five percent (5%); and on a sale of fifty dollars
11 ($50.00) or more, a discount of ten percent (10%).
12 In the case of stamps, the tax imposed by this chapter shall be paid in
13 advance at the time the stamps are purchased. In the case of tax crowns, the
14 tax shall be paid in advance at the time the tax commission authorizes the
15 purchase of such tax crowns, unless the purchaser applies for and obtains
16 credit as provided in subsection (3) of this section.
17 (3) Whenever any person applies for an authorization to purchase tax
18 crowns, he may apply for an extension of credit on the tax due with respect to
19 such crowns, and if he files a bond in the form prescribed by the commission,
20 with satisfactory corporate surety, in an amount not less than twenty-five
21 percent (25%) more than the tax due with respect to the tax crowns to be pur-
22 chased, the commission shall issue the necessary authorization. Any person who
23 obtains such credit shall, on or before the fifteenth day of each month, file
24 with the commission on forms prescribed by the commission a return stating the
25 number of tax crowns used by such person during the preceding month, and he
26 shall at the same time pay to the commission the tax due on the crowns so
27 used.
28 (4) The commission shall allow to each purchaser of tax crowns, whether
29 for cash or credit, a discount of twelve and one-half percent (12.5%) of the
30 tax value of such crowns. Such discount, and the discount allowed on the sale
31 of tax stamps, shall be in lieu of the allowance of any claim for refund by
32 reason of the breakage or destruction of containers stamped or crowned as pro-
33 vided in this chapter, the spoilage of the soft drinks or syrups, or the loss
34 or destruction of tax stamps or tax crowns; provided, that when the tax stamps
35 or crowns or soft drinks, soft drink powders or soft drink syrups upon which
36 tax has been paid are destroyed by fire, lightning or flood and when soft
37 drinks, syrups or powders upon which tax has been paid are exported from this
38 state or are required to be destroyed pursuant to federal or state order, the
39 taxpayer may file a claim for refund for an amount equal to the amount of tax
40 actually paid for such stamps or crowns. The commission shall cause a refund
41 to be made under this section only when a claim for refund is filed within one
42 hundred eighty (180) days from the date the tax stamps or crowns were
43 destroyed or the soft drink products upon which tax was paid were destroyed or
44 exported from this state. Any claim for refund shall also be subject to the
45 provisions of this chapter and rules promulgated pursuant thereto. At the
46 election of the taxpayer, the amount of any refund may be established as a
47 credit. The amount refunded or credited under this section shall not be sub-
48 ject to the interest provisions of this title.
49 63-4707. DUE DATE OF REPORTS -- ADDITIONAL REPORTS -- EXTENSION OF TIME.
50 Every person subject to the tax imposed by this chapter shall on or before the
51 fifteenth day of each month make and file with the commission a report of
52 such person's operations for the preceding month to verify liability for tax
53 under this chapter. This report shall be in a form prescribed by the tax com-
54 mission. The commission may, by fifteen (15) days' written notice, require the
5
1 filing of such additional reports as it deems necessary to verify a person's
2 liability under this chapter. Upon written application setting forth good
3 cause, the commission may extend the time for filing such reports or addi-
4 tional reports on such terms and conditions as it may require.
5 63-4708. DELINQUENT TAXPAYERS -- ADMINISTRATION AND ENFORCEMENT. (1) In
6 addition to the additions to tax, penalties and interest authorized in this
7 chapter, if any taxpayer fails to file a return or pay the proper amount of
8 tax within the time specified herein, the commission shall refuse to authorize
9 the purchase of tax stamps or crowns by the delinquent taxpayer; provided,
10 that if the failure to pay was due to reasonable cause, the commission may
11 waive this penalty. Before reusing the authorization, the commission shall
12 provide notice of the refusal in the manner provided for notices of deficiency
13 determination and the taxpayer shall have the right to seek a redetermination
14 of such refusal under chapter 30, title 63, Idaho Code.
15 (2) For the purpose of carrying out its duties to enforce or administer
16 the provisions of this chapter, the commission shall have the powers and
17 duties provided by sections 63-3038, 63-3039, 63-3040, 63-3042 through
18 63-3066, 63-3068, 63-3071, 63-3073 through 63-3078 and 63-217, Idaho Code,
19 which sections are incorporated by reference herein as though set out verba-
20 tim.
21 63-4709. SEIZURE AND SALE OF SOFT DRINK SYRUPS BY COMMISSION -- FORFEI-
22 TURE -- COLLECTION OF TAX. Whenever the commission or any of its duly autho-
23 rized agents shall discover any soft drink syrups, subject to tax as provided
24 by this chapter and upon which the tax has not been paid as herein required,
25 the commission or its duly authorized agent is hereby authorized and empow-
26 ered forthwith to seize and take possession of such soft drink syrups, which
27 shall thereupon be deemed to be forfeited to the state, and the commission
28 shall within a reasonable time thereafter sell such forfeited soft drink
29 syrups; and from the proceeds of such sale shall collect the tax and interest
30 due thereon, together with a penalty of fifty percent (50%) of the tax due and
31 the cost incurred in such proceedings, and pay the balance, if any, to the
32 person in whose possession such soft drink syrups were found; provided, that
33 such seizure and sale shall not be deemed to relieve any person from fine or
34 imprisonment provided herein for violation of any provision of this chapter.
35 Such sale shall be made in the county where most convenient and economical.
36 Notice of such sale shall be published as a twenty (20) day notice in compli-
37 ance with the provisions of section 60-109, Idaho Code, and the publication
38 area for such publication shall be the county wherein such seizure was made
39 and the county wherein the sale is to take place. Notice shall be published at
40 least five (5) days prior to the sale. All moneys collected under the provi-
41 sions of this section shall be paid into the state treasury and treated as
42 other taxes collected under this chapter.
43 63-4710. ALTERING, COUNTERFEITING OR REUSING TAX STAMPS OR TAX CROWNS --
44 PENALTY. Any person who falsely or fraudulently makes, forges, alters or coun-
45 terfeits any tax stamp or tax crown prescribed by the commission under the
46 provisions of this chapter, or who knowingly or willfully utters, passes or
47 tenders as true any such false, altered, forged or counterfeited stamp or
48 crown, or who uses more than once any stamp or crown for the purpose of evad-
49 ing the tax imposed by this chapter, shall be guilty of a felony and, upon
50 conviction thereof, shall be punished by imprisonment in the penitentiary for
51 not less than one (1) year nor more than five (5) years.
6
1 63-4711. DISTRIBUTION. The revenues received from the tax imposed by this
2 chapter and any penalties, interest or deficiency additions, or from the fees
3 imposed by the commission shall be distributed as follows:
4 (1) An amount of money equal to the actual cost of collecting, adminis-
5 tering and enforcing the soft drink tax provisions by the commission, as
6 determined by it shall be retained by the commission. The amount retained by
7 the commission shall not exceed the amount authorized to be expended by appro-
8 priation by the legislature. Any unencumbered balance in excess of the actual
9 cost of collecting, administering and enforcing the soft drinks tax require-
10 ments by the commission at the end of each fiscal year shall be distributed to
11 the general fund.
12 (2) An amount of money shall be distributed to the state refund account
13 sufficient to pay current refund claims. All refunds authorized by the commis-
14 sion to be paid under this chapter shall be paid from the state refund
15 account, those moneys being hereby continuously appropriated.
16 (3) The balance remaining with the commission after distributing the
17 amounts specified in subsections (1) and (2) of this section shall be distrib-
18 uted to the general fund.
STATEMENT OF PURPOSE
RS 13275
The purpose of this legislation is to impose an excise tax on
bottled soft drinks, syrups and dry mix and provide for the
affixing of tax stamps or crowns. The revenue will be one cent
for twelve fluid ounces; one dollar per gallon of soft drink
syrup; one cent each ounce by weight of dry mixture making soft
drinks.
FISCAL IMPACT
This bill would generate an increase to the General Fund revenues
by approximately $10 million.
Contact
Name: House Revenue and Taxation Committee
Phone: (208)332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 405