2006 Legislation
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HOUSE BILL NO. 693 – Cigars, tax

HOUSE BILL NO. 693

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Bill Status



H0693...............................................by REVENUE AND TAXATION
CIGARS - TAXATION - Amends existing law to provide that the tax on cigars
shall not exceed fifty cents per cigar.
                                                                        
02/16    House intro - 1st rdg - to printing
02/17    Rpt prt - to Rev/Tax
02/28    Rpt out - rec d/p - to 2nd rdg
03/01    2nd rdg - to 3rd rdg
03/06    3rd rdg - PASSED - 43-23-4
      AYES -- Anderson, Barrett, Bastian, Bayer, Bilbao, Black, Bradford,
      Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Henderson, Jaquet, Kemp, Martinez, McGeachin, McKague, Miller,
      Mitchell, Nielsen, Raybould, Sali, Schaefer, Shepherd(2),
      Shepherd(8), Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Wills,
      Mr. Speaker
      NAYS -- Andrus, Barraclough, Bedke, Bell, Bolz, Brackett, Cannon,
      Lake, LeFavour, Loertscher, Mathews, Moyle, Pasley-Stuart, Pence,
      Ring, Ringo, Roberts, Rusche, Rydalch, Shirley, Stevenson, Trail,
      Wood
      Absent and excused -- Block, Boe, Nonini, Sayler
    Floor Sponsor - Clark
    Title apvd - to Senate
03/07    Senate intro - 1st rdg - to Loc Gov

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 693
                                                                        
                             BY REVENUE AND TAXATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE TAX ON TOBACCO PRODUCTS; AMENDING SECTION 63-2552, IDAHO CODE,
  3        TO PROVIDE THAT THE TAX ON CIGARS SHALL NOT EXCEED FIFTY CENTS PER  CIGAR,
  4        TO REMOVE ARCHAIC LANGUAGE AND TO MAKE TECHNICAL CORRECTIONS; AND AMENDING
  5        SECTION  63-2552A, IDAHO CODE, TO PROVIDE THAT THE TAX ON CIGARS SHALL NOT
  6        EXCEED FIFTY CENTS PER CIGAR AND TO REMOVE ARCHAIC LANGUAGE.
                                                                        
  7    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
  8        SECTION 1.  That Section 63-2552, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:
                                                                        
 10        63-2552.  TAX  IMPOSED -- RATE. (1) From and after July 1, 1972, tThere is
 11    levied and there shall be collected a tax upon  the  sale,  use,  consumption,
 12    handling, or distribution of all tobacco products in this state at the rate of
 13    thirty-five  per  cent  percent  (35%)  of  the  wholesale sales price of such
 14    tobacco products, except that effective July 1, 2006, the tax on cigars  shall
 15    not  exceed fifty cents (50¢) per cigar. Such tax shall be imposed at the time
 16    the distributor: (a) brings, or causes to be brought,  into  this  state  from
 17    without  the  state  tobacco  products  for sale,; (b) makes, manufactures, or
 18    fabricates tobacco products in this state for sale  in  this  state,;  or  (c)
 19    ships or transports tobacco products to retailers in this state, to be sold by
 20    those retailers.
 21        (2)  A  floor  stocks  tax  is  hereby  imposed  upon every distributor of
 22    tobacco products at the rate of thirty-five per cent (35%)  of  the  wholesale
 23    sales  price of each tobacco product in his possession or under his control on
 24    July 1, 1972.
 25        Each distributor, within twenty (20) days after July 1, 1972, shall file a
 26    report with the commission, in such form  as  the  commission  may  prescribe,
 27    showing  the  tobacco  products on hand on July 1, 1972, and the amount of tax
 28    due thereon.
 29        The tax imposed by this subdivision shall be due and payable within twenty
 30    (20) days after July 1, 1972, and thereafter shall bear interest at  the  rate
 31    of one per cent (1%) per month.
                                                                        
 32        SECTION  2.  That Section 63-2552A, Idaho Code, be, and the same is hereby
 33    amended to read as follows:
                                                                        
 34        63-2552A.  ADDITIONAL TAX IMPOSED -- RATE. (1)  In  addition  to  the  tax
 35    imposed  in section 63-2552, Idaho Code, from and after July 1, 1994, there is
 36    levied and there shall be collected an additional tax upon the sale, use, con-
 37    sumption, handling, or distribution of all tobacco products in this  state  at
 38    the  rate  of  five  percent (5%) of the wholesale sales price of such tobacco
 39    products, except that effective July 1, 2006, the  tax  on  cigars  shall  not
 40    exceed  fifty cents (50¢) per cigar. Such tax shall be imposed at the time the
 41    distributor:
                                                                        
                                           2
                                                                        
  1        (a)  Brings, or causes to be brought, into this  state  from  without  the
  2        state tobacco products for sale;
  3        (b)  Makes, manufactures, or fabricates tobacco products in this state for
  4        sale in this state; or
  5        (c)  Ships or transports tobacco products to retailers in this state to be
  6        sold by those retailers.
  7        (2)  Each  distributor,  within twenty (20) days after July 1, 1994, shall
  8    file a report with the commission, in such form as  the  commission  may  pre-
  9    scribe,  showing  the tobacco products on hand on July 1, 1994, and the amount
 10    of tax due thereon. The tax imposed in this subsection shall be due  and  pay-
 11    able  within  twenty  (20)  days after July 1, 1994, and thereafter shall bear
 12    interest at the rate of one percent (1%) per month.
 13        (3)  Fifty percent (50%) of the tax collected  pursuant  to  this  section
 14    shall  be subject to appropriation to the public school income fund to be uti-
 15    lized to facilitate and provide substance abuse programs in the public  school
 16    system  of which amount two hundred fifty thousand dollars ($250,000) shall be
 17    remitted annually to the Idaho state police to increase toxicology lab  capac-
 18    ity  in  the  bureau  of  forensic services for drug testing of juveniles, and
 19    fifty percent (50%) shall be subject to appropriation  to  the  department  of
 20    juvenile corrections for distribution quarterly to the counties to be utilized
 21    for  county juvenile probation services, based upon the percentage the popula-
 22    tion of the county bears to the population of the state as a whole. The moneys
 23    remitted to the Idaho state police shall be reviewed annually  and  any  money
 24    excess  to  the  operations  needs of the laboratory for juvenile drug testing
 25    will be returned to the public school income fund for substance abuse programs
 26    in the public  school  system.  The  laboratory  may  utilize  this  increased
 27    toxicology  capacity  for adult drug testing to the extent that timely testing
 28    for juveniles is not adversely impacted.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 15857

These amendments to 63-2552 and 63-2552A, Idaho Code, will make
the retail sale of premium cigars in Idaho more competitive with
the neighboring states of Utah and Nevada.  Their excise tax rate
is lower than Idaho and on a level playing field with the
adjoining states of Washington and Oregon, where the excise tax
on cigars is capped at fifty cents.



                           FISCAL NOTE

Passage of this legislation will result in more premium cigars
being sold by the box in Idaho resulting in more excise and sales
tax revenue.  In 2004 Idaho's excise tax on cigars generated only
about $175,000 from the sale of premium, handmade cigars.  Since
January, 2002, when Oregon's fifty cents per cigar cap became
effective, premium cigar sales in that state (through 2004) have
increased 37.7%, and excise tax revenue from premium cigars has
jumped 164%.  It is estimated Idaho will experience similar
results if the excise tax on cigars is capped at fifty cents.



Contact
Name: Rep. Jim Clark 
Phone: (208) 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                         H 693