View Daily Data Tracking History
View Bill Text
View Statement of Purpose / Fiscal Impact
H0455...............................................by REVENUE AND TAXATION
CIGARETTE TAX - Amends existing law to apply the cigarette tax to use or
consumption other than cigarettes sold on Indian reservations for
consumption by tribal members; to apply the cigarette tax to all sales
except to members of the reservation's governing tribe on an Indian
reservation; and to establish a deduction method against cigarette taxes
for the exemption.
04/29 House intro - 1st rdg - to printing
04/30 Rpt prt - to 2nd rdg
05/01 Rls susp - FAILED - 18-52-0
AYES -- Barraclough(Schanz), Bedke, Bell, Block, Cuddy, Denney,
Harwood, McGeachin, Meyer, Miller, Moyle, Raybould, Roberts,
Smith(24), Stevenson, Tilman, Wood, Mr. Speaker
NAYS -- Andersen(Guyon), Barrett, Bauer, Bieter, Black, Boe, Bolz,
Bradford, Campbell, Cannon, Clark, Collins, Crow, Deal, Douglas,
Eberle, Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Gagner,
Garrett, Henbest, Jaquet, Jones, Kellogg, Kulczyk, Lake, Langford,
Langhorst, Martinez(Echohawk), McKague, Mitchell, Naccarato, Nielsen,
Ridinger, Ring, Ringo, Robison, Rydalch, Sali, Sayler, Schaefer,
Shepherd(Buell), Shirley, Skippen, Smith(30), Smylie, Snodgrass,
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. 455
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO TAXATION; AMENDING SECTION 63-2501, IDAHO CODE, TO APPLY THE CIGA-
3 RETTE TAX TO USE OR CONSUMPTION OTHER THAN CIGARETTES SOLD ON INDIAN RES-
4 ERVATIONS FOR CONSUMPTION BY TRIBAL MEMBERS; AMENDING SECTION 63-2506,
5 IDAHO CODE, TO APPLY THE CIGARETTE TAX TO ALL SALES EXCEPT TO MEMBERS OF
6 THE RESERVATION'S GOVERNING TRIBE ON AN INDIAN RESERVATION, TO ESTABLISH A
7 DEDUCTION METHOD AGAINST CIGARETTE TAXES FOR THE EXEMPTION AND TO MAKE A
8 TECHNICAL CORRECTION; PROVIDING FOR SEVERABILITY; AND PROVIDING AN EFFEC-
9 TIVE DATE.
10 Be It Enacted by the Legislature of the State of Idaho:
11 SECTION 1. That Section 63-2501, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 63-2501. PURPOSE. It is the intent and purpose of this act chapter to
14 levy a tax on all cigarettes sold, used, or consumed, handled or distributed
15 within this state, other than certain cigarettes sold on Indian reservations
16 for consumption by tribal members, and to precollect the tax from the person
17 who first sells, uses, consumes receives, handles, or distributes the ciga-
18 rettes. It is also the intent of this chapter to eliminate unfair competitive
19 business advantages now enjoyed by Indian tobacco retailers in direct competi-
20 tion with non-Indian businesses. This advantage arises because the legislature
21 of the state of Idaho in the past has not exercised its full constitutional
22 authority to require that Indian enterprises collect and remit state cigarette
23 taxes in regard to sales made to non-Indian customers. The legislature hereby
24 intends to exercise the full extent of the state's constitutional power to
25 require that cigarettes sold to non-Indian purchasers on an Indian reservation
26 must have an Idaho cigarette tax stamp affixed, even if sold by an Indian or
27 an Indian enterprise.
28 SECTION 2. That Section 63-2506, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 63-2506. IMPOSITION OF TAX. (1) A tax upon the purchase, storage, ciga-
31 rettes purchased at retail for use, or consumption, handling, distribution or
32 wholesale sale of cigarettes is hereby imposed at the rate of one and four-
33 tenths cent (1.4) for each cigarette or twenty-eight cents (28) per package
34 of twenty (20) cigarettes, which tax shall be precollected and paid by the
35 wholesaler, and collected by remitted to the state tax commission. Five cents
36 (5) of the tax collected per package of twenty (20) cigarettes shall be sub-
37 ject to appropriation to the public school income fund to be utilized to
38 facilitate and provide substance abuse programs in the public school system.
39 Five cents (5) of the tax collected per package of twenty (20) cigarettes
40 shall be subject to appropriation to the department of juvenile corrections
41 for distribution to the counties to be utilized for county juvenile probation
2
1 services. Appropriated funds shall be distributed quarterly to the counties
2 based upon the percentage the population of the county bears to the population
3 of the state as a whole. The remaining moneys collected and those moneys not
4 appropriated under the provisions of this section shall be distributed as
5 specified in section 63-2520, Idaho Code.
6 (2) The tax imposed by this section shall not apply to cigarettes sold by
7 a wholesaler pursuant to an authorization by the commission as provided by
8 this section to an Indian retailer solely for resale within the boundaries of
9 an Indian reservation located in Idaho to members of the reservation's govern-
10 ing tribe. Any cigarettes that are nontaxable under this subsection are
11 required to have affixed the cigarette stamps required by this chapter.
12 (3) Wholesalers making sales of cigarettes to Indian retailers located on
13 an Indian reservation located in Idaho may apply to the commission for an
14 authorization to deduct on its cigarette tax return cigarettes sold by the
15 Indian retailers to members of the reservation's governing tribe. The claim
16 for any such deduction must be made by the wholesaler and approved by the com-
17 mission before the wholesaler sells the cigarettes to a retailer. If not so
18 claimed, the deduction shall be lost.
19 (4) The total number of deductible cigarettes allowed by the commission
20 to wholesalers claiming a deduction under subsection (3) of this section for
21 any reporting period shall not exceed the allocated number of cigarettes for
22 the federally recognized Indian reservation in Idaho to which the cigarettes
23 are destined. The allocated number of cigarettes for each federally recognized
24 Indian reservation in Idaho shall be determined by the commission by multiply-
25 ing the tribal service area population as determined by the bureau of Indian
26 affairs of the United States department of interior by the greater of:
27 (a) The national cigarette consumption per capita average, as compiled
28 for the most recently completed calendar or fiscal year by the U.S.
29 department of health and human services or other reliable source of data
30 as determined by the state tax commission; or
31 (b) The cigarette consumption per capita average for that tribe as com-
32 piled for the most recently completed calendar year.
33 (5) A wholesaler may seek, and the commission may allow, a larger number
34 of deductible cigarettes upon documentary proof satisfactory to the commission
35 that actual sales to members of a reservation's governing tribe exceeded the
36 amounts computed in accordance with subsection (4) of this section, provided
37 that the deduction may not exceed the amount of the documented actual sales.
38 (6) No deduction shall be allowed to a wholesaler, unless the wholesaler
39 certifies to the commission that the economic benefit of the deduction has
40 been passed on to the retailers to whom the sales were made. The economic ben-
41 efit of the deduction shall be presumed to have been passed on to the Indian
42 retailer when the average price of cigarettes sold by the wholesaler to all
43 retailers other than Indian retailers during the reporting period exceeds, by
44 an amount equal to the tax imposed in this chapter, the average price of ciga-
45 rettes sold to Indian retailers during the same reporting period.
46 (7) The following definitions apply to terms used in this section:
47 (a) "Indian reservation" means lands in the state of Idaho lawfully
48 reserved, as of the date of the cigarette sale, for a federally recognized
49 Indian tribe by treaty with the United States, by federal statute, execu-
50 tive order or regulation.
51 (b) "Indian retailer" means only a business or enterprise which is wholly
52 owned and operated by an Idaho Indian tribe identified in section 67-4001,
53 Idaho Code, or a business or enterprise which is wholly owned and operated
54 by one (1) or more members of that tribe.
55 (c) "Reporting period" means the period for which a cigarette tax return
3
1 is due under section 63-2510, Idaho Code.
2 SECTION 3. SEVERABILITY. The provisions of this act are hereby declared
3 to be severable and if any provision of this act or the application of such
4 provision to any person or circumstance is declared invalid for any reason,
5 such declaration shall not affect the validity of the remaining portions of
6 this act.
7 SECTION 4. This act shall be in full force and effect on and after July
8 1, 2004.
STATEMENT OF PURPOSE
RS 13331
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. The enacting date is July 2004
allowing time for the Tribes and the State of Idaho to negotiate
an equitable agreement.
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) 332-100
STATEMENT OF PURPOSE/FISCAL NOTE H 455