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H0787...............................................by REVENUE AND TAXATION
SNUFF - TOBACCO - TAXATION - Amends, adds to and repeals existing law to
define "moist snuff"; to provide the rate of taxation for tobacco products
other than moist snuff and to provide for distribution of revenues; to
provide that moist snuff shall be taxed at the rate of one dollar per ounce
of moist snuff, if the wholesale price is $2.50 or less per ounce, or forty
percent of the wholesale price of moist snuff, if the wholesale price is
greater than $2.50 per ounce; and to provide for distribution of tax
revenues.
03/07 House intro - 1st rdg - to printing
03/08 Rpt prt - to Rev/Tax
03/10 Rpt out - rec d/p - to 2nd rdg
03/13 2nd rdg - to 3rd rdg
03/15 3rd rdg - PASSED - 53-15-2
AYES -- Andrus, Barraclough, Bastian, Bedke, Bell, Bilbao, Block,
Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon, Clark, Collins,
Crow, Deal, Denney, Field(18), Field(23), Garrett, Hart, Henbest,
Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez,
Mathews, McKague, Miller, Mitchell, Moyle, Nielsen, Pasley-Stuart,
Pence, Raybould, Ring, Ringo, Rusche, Rydalch, Sayler, Shirley,
Skippen, Smith(30), Smylie, Stevenson, Trail, Wills, Wood, Mr.
Speaker
NAYS -- Anderson, Barrett, Bayer, Black, Edmunson, Eskridge, Harwood,
McGeachin, Nonini, Sali, Schaefer, Shepherd(2), Shepherd(8),
Smith(24), Snodgrass
Absent and excused -- Ellsworth, Roberts
Floor Sponsors - Field(18) & Lake
Title apvd - to Senate
03/16 Senate intro - 1st rdg - to St Aff
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 787
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO THE TAXATION OF CERTAIN TOBACCO PRODUCTS; AMENDING SECTION
3 63-2551, IDAHO CODE, TO DEFINE "MOIST SNUFF" AND TO MAKE A TECHNICAL COR-
4 RECTION; AMENDING SECTION 63-2552, IDAHO CODE, TO PROVIDE THE RATE OF TAX-
5 ATION FOR TOBACCO PRODUCTS OTHER THAN MOIST SNUFF, TO PROVIDE FOR DISTRI-
6 BUTION OF REVENUES AND TO MAKE TECHNICAL CORRECTIONS; REPEALING SECTION
7 63-2552A, IDAHO CODE, RELATING TO AN ADDITIONAL TAX IMPOSED ON TOBACCO
8 PRODUCTS AND REPEALING SECTION 63-2564, IDAHO CODE, RELATING TO DISTRIBU-
9 TION OF TAX REVENUES FROM THE TOBACCO PRODUCTS TAX; AMENDING CHAPTER 25,
10 TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 63-2552A, IDAHO
11 CODE, TO PROVIDE THAT MOIST SNUFF SHALL BE TAXED AT THE RATE OF ONE DOLLAR
12 PER OUNCE OR FORTY PERCENT OF THE WHOLESALE SALES PRICE OF MOIST SNUFF
13 DEPENDING ON THE WHOLESALE PRICE OF THE MOIST SNUFF, AND TO PROVIDE FOR
14 DISTRIBUTION OF TAX REVENUES ON MOIST SNUFF.
15 Be It Enacted by the Legislature of the State of Idaho:
16 SECTION 1. That Section 63-2551, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 63-2551. TOBACCO PRODUCTS TAX -- DEFINITIONS. As used in this act:
19 (1) "Tobacco products" shall mean any cigars, cheroots, stogies, smoking
20 tobacco (including granulated, plug, cut, crimp cut, ready rubbed and any
21 other kinds and forms of tobacco suitable for smoking in a pipe or cigarette),
22 chewing tobacco (including cavendish, twist, plug, scrap and any other kinds
23 and forms of tobacco suitable for chewing) and snuff, however prepared; and
24 shall include any other articles or products made of tobacco or any substitute
25 therefor, except cigarettes;
26 (2) "Moist snuff" means any finely cut, ground, or powdered tobacco
27 intended to be placed in the oral cavity, but not including dry snuff.
28 (3) "Manufacturer" means a person who manufactures and sells tobacco
29 products;
30 (34) "Distributor" means: (a) any person engaged in the business of sell-
31 ing tobacco products in this state who brings, or causes to be brought, into
32 this state from without the state any tobacco products for sale, (b) any per-
33 son who makes, manufactures, or fabricates tobacco products in this state for
34 sale in this state, (c) any person engaged in the business of selling tobacco
35 products without this state who ships or transports tobacco products to
36 retailers in this state, to be sold by those retailers;
37 (45) "Subjobber" means any person, other than a manufacturer or distribu-
38 tor, who buys tobacco products from a distributor and sells them to persons
39 other than the ultimate consumers;
40 (56) "Retailer" means any person engaged in the business of selling
41 tobacco products to ultimate consumers;
42 (67) "Sale" means any transfer, exchange, or barter, in any manner or by
43 any means whatsoever, for a consideration, and includes and means all sales
2
1 made by any person. It includes a gift by a person engaged in the business of
2 selling tobacco products, for advertising, as a means of evading the provi-
3 sions of this chapter, or for any other purposes whatsoever;
4 (78) "Wholesale sales price" means the established price for which a man-
5 ufacturer sells a tobacco product to a distributor, exclusive of any discount
6 or other reduction;
7 (89) "Business" means any trade, occupation, activity, or enterprise
8 engaged in for the purpose of selling or distributing tobacco products in this
9 state;
10 (910) "Place of business" means any place where tobacco products are manu-
11 factured, stored, or kept for the purpose of sale or consumption, including
12 any vessel, vehicle, airplane, train, or vending machine;
13 (101) "Retail outlet" means each place of business from which tobacco
14 products are sold to consumers;
15 (112) "Commission" means the Idaho state tax commission.
16 SECTION 2. That Section 63-2552, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 63-2552. TOBACCO PRODUCTS TAX IMPOSED -- RATE. (1) From and after July 1,
19 1972 2006, there is levied and there shall be collected a tax upon the sale,
20 use, consumption, handling, or distribution of all tobacco products, except
21 moist snuff, in this state at the rate of thirty-five per cent forty percent
22 (3540%) of the wholesale sales price of such tobacco products.
23 (2) Such tax shall be imposed at the time the distributor:
24 (a) bBrings, or causes to be brought, into this state from without the
25 state tobacco products for sale,;
26 (b) mMakes, manufactures, or fabricates tobacco products in this state
27 for sale in this state,; or
28 (c) sShips or transports tobacco products to retailers in this state, to
29 be sold by those retailers.
30 (2) A floor stocks tax is hereby imposed upon every distributor of
31 tobacco products at the rate of thirty-five per cent (35%) of the wholesale
32 sales price of each tobacco product in his possession or under his control on
33 July 1, 1972.
34 Each distributor, within twenty (20) days after July 1, 1972, shall file a
35 report with the commission, in such form as the commission may prescribe,
36 showing the tobacco products on hand on July 1, 1972, and the amount of tax
37 due thereon.
38 The tax imposed by this subdivision shall be due and payable within twenty
39 (20) days after July 1, 1972, and thereafter shall bear interest at the rate
40 of one per cent (1%) per month
41 (3) The revenues received from the tax imposed by this section and any
42 penalties, interest or deficiency additions, shall be distributed by the tax
43 commission as follows:
44 (a) An amount of money shall be distributed to the state refund account,
45 sufficient to pay current refund claims. All refunds authorized by the
46 commission shall be paid through the state refund account, and those
47 moneys are continuously appropriated.
48 (b) From the balance remaining after deduction of the amounts in para-
49 graph (a) of this subsection, the remaining moneys shall be remitted as
50 follows:
51 (i) Eighty-seven and one-half percent (87.5%) directly to the gen-
52 eral fund;
53 (ii) Six and one-quarter percent (6.25%) shall be subject to appro-
3
1 priation to the public school income fund to be utilized to facili-
2 tate and provide substance abuse programs in the public school system
3 of which amount two hundred fifty thousand dollars ($250,000) shall
4 be remitted annually to the state police to increase toxicology labo-
5 ratory capacity in the bureau of forensic services for drug testing
6 of juveniles. The moneys remitted to the state police shall be
7 reviewed annually and any money in excess of the operations needs of
8 the laboratory for juvenile drug testing will be returned to the pub-
9 lic school income fund for substance abuse programs in the public
10 school system. The laboratory may utilize this increased toxicology
11 capacity for adult drug testing to the extent that timely testing for
12 juveniles is not adversely impacted.
13 (iii) Six and one-quarter percent (6.25%) shall be subject to appro-
14 priation to the department of juvenile corrections for distribution
15 quarterly to the counties to be utilized for county juvenile proba-
16 tion services, based upon the percentage the population of the county
17 bears to the population of the state as a whole.
18 SECTION 3. That Sections 63-2552A and 63-2564, Idaho Code, be, and the
19 same are hereby repealed.
20 SECTION 4. That Chapter 25, Title 63, Idaho Code, be, and the same is
21 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
22 ignated as Section 63-2552A, Idaho Code, and to read as follows:
23 63-2552A. TAX IMPOSED ON MOIST SNUFF -- RATE -- DISTRIBUTION OF TAX REVE-
24 NUES. (1) On and after July 1, 2006, there is levied and there shall be col-
25 lected a tax upon the sale, use, consumption, handling, or distribution of
26 moist snuff in this state at the rate of: (i) one dollar ($1.00) per ounce,
27 and a proportionate tax at the like rate on all fractional parts of an ounce
28 of moist snuff, whose wholesale price is two dollars and fifty cents ($2.50)
29 or less per ounce; or (ii) at the rate of forty percent (40%) of the wholesale
30 sales price of such moist snuff if the wholesale price is greater than two
31 dollars and fifty cents ($2.50) per ounce. Provided however, each can or pack-
32 age of moist snuff containing a net weight of less than one (1) ounce of moist
33 snuff shall be taxed at the equivalent rate of a can or package containing
34 moist snuff weighing one (1) ounce if the one dollar ($1.00) per ounce tax
35 rate is being used. Such tax shall be imposed at the time the distributor:
36 (a) Brings, or causes to be brought, into this state from without the
37 state moist snuff for sale;
38 (b) Makes, manufactures, or fabricates moist snuff in this state for sale
39 in this state; or
40 (c) Ships or transports moist snuff to retailers in this state to be sold
41 by those retailers.
42 (2) Each distributor, within twenty (20) days after July 1, 2006, shall
43 file a report with the commission, in such form as the commission may pre-
44 scribe, showing the moist snuff on hand on July 1, 2006, and the amount of tax
45 due thereon. The tax imposed in this section shall be due and payable within
46 twenty (20) days after July 1, 2006, and thereafter shall bear interest as
47 provided in section 63-3045, Idaho Code. If the distributor has previously
48 paid tax to the state of Idaho upon the moist snuff on hand on July 1, 2006,
49 the distributor shall pay the tax due pursuant to this section, but shall be
50 entitled to credit thereon for taxes previously paid on such moist snuff pur-
51 suant to the law in effect prior to July 1, 2006.
52 (3) The revenues received from the tax collected pursuant to this sec-
4
1 tion and any deficiency additions, shall be distributed by the state tax com-
2 mission as follows:
3 (a) An amount of money shall be distributed to the state refund account,
4 sufficient to pay current refund claims. All refunds authorized by the
5 commission shall be paid through the state refund account, and those
6 moneys are continuously appropriated.
7 (b) The sum of eight hundred fifty thousand dollars ($850,000) shall be
8 subject to appropriation by the legislature to the drug court, mental
9 health court and family court services fund created in the office of the
10 state treasurer pursuant to section 1-1625, Idaho Code, to be utilized by
11 the supreme court as set forth in that section.
12 (c) From the balance remaining after deduction of the amounts in para-
13 graphs (a) and (b) of this subsection, the remaining moneys shall be
14 remitted as follows:
15 (i) Eighty-seven and one-half percent (87.5%) directly to the gen-
16 eral fund;
17 (ii) Six and one-quarter percent (6.25%) shall be subject to appro-
18 priation to the public school income fund to be utilized to facili-
19 tate and provide substance abuse programs in the public school system
20 of which amount two hundred fifty thousand dollars ($250,000) shall
21 be remitted annually to the state police to increase toxicology labo-
22 ratory capacity in the bureau of forensic services for drug testing
23 of juveniles. The moneys remitted to the state police shall be
24 reviewed annually and any money in excess of the operations needs of
25 the laboratory for juvenile drug testing will be returned to the pub-
26 lic school income fund for substance abuse programs in the public
27 school system. The laboratory may utilize this increased toxicology
28 capacity for adult drug testing to the extent that timely testing for
29 juveniles is not adversely impacted.
30 (iii) Six and one-quarter percent (6.25%) shall be subject to appro-
31 priation to the department of juvenile corrections for distribution
32 quarterly to the counties to be utilized for county juvenile proba-
33 tion services, based upon the percentage the population of the county
34 bears to the population of the state as a whole.
STATEMENT OF PURPOSE
RS 16174C1
The purpose of this legislation is to raise the tax on each
container of moist snuff to a minimum of $1.00 per ounce and
continue the tax rate of higher priced products at 40% of
wholesale price of such tobacco products.
This legislation will also provide a dedicated revenue source of
funding for drug, family, and mental health courts to be expended
under the jurisdiction of the supreme court.
FISCAL NOTE
This legislation will not impact the state general fund or
funding of other programs.
This change in tax methodology for moist snuff will result in
approximately $850,000 increase in tax revenue. Likewise, up to
$850,000 will be subject to appropriation to the drug court,
mental health court and family court services fund to be utilized
by the Supreme Court for such purposes pursuant to section 1-
1625, Idaho Code. Present revenues and any future increases in
revenues above $850,000 will be distributed as presently
provided.
Contact
Name: Rep. Lake
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 787