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H0275...............................................by REVENUE AND TAXATION
TOBACCO PRODUCTS - 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; to provide the rate of taxation on moist snuff; and
to provide for distribution of tax revenues.
03/05 House intro - 1st rdg - to printing
03/06 Rpt prt - to Rev/Tax
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 275
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 TECHNICAL CORREC-
4 TIONS; AMENDING SECTION 63-2552, IDAHO CODE, TO PROVIDE THE RATE OF TAXA-
5 TION FOR TOBACCO PRODUCTS OTHER THAN MOIST SNUFF AND TO PROVIDE FOR DIS-
6 TRIBUTION OF REVENUES; REPEALING SECTION 63-2552A, IDAHO CODE, RELATING TO
7 ADDITIONAL TAXATION OF TOBACCO PRODUCTS AND REPEALING SECTION 63-2564,
8 IDAHO CODE, RELATING TO DISTRIBUTION OF TAX REVENUES FROM THE TOBACCO
9 PRODUCTS TAX; AMENDING CHAPTER 25, TITLE 63, IDAHO CODE, BY THE ADDITION
10 OF A NEW SECTION 63-2552A, IDAHO CODE, TO PROVIDE THE RATE OF TAX ON MOIST
11 SNUFF AND TO PROVIDE FOR DISTRIBUTION OF TAX REVENUES ON MOIST SNUFF.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Section 63-2551, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 63-2551. TOBACCO PRODUCTS TAX -- DEFINITIONS. As used in this act:
16 (1) "Tobacco products" shall mean any cigars, cheroots, stogies, smoking
17 tobacco, (including granulated, plug, cut, crimp cut, ready rubbed and any
18 other kinds and forms of tobacco suitable for smoking in a pipe or cigarette),
19 chewing tobacco, (including cavendish, twist, plug, scrap and any other kinds
20 and forms of tobacco suitable for chewing), and snuff, however prepared; and
21 shall include any other articles or products made of tobacco or any substitute
22 therefor, except cigarettes;
23 (2) "Moist snuff" means any finely cut, ground, or powdered tobacco
24 intended to be placed in the oral cavity, but not including dry snuff.
25 (3) "Manufacturer" means a person who manufactures and sells tobacco
26 products;
27 (34) "Distributor" means: (a) any person engaged in the business of sell-
28 ing tobacco products in this state who brings, or causes to be brought, into
29 this state from without the state any tobacco products for sale, (b) any per-
30 son who makes, manufactures, or fabricates tobacco products in this state for
31 sale in this state, (c) any person engaged in the business of selling tobacco
32 products without this state who ships or transports tobacco products to
33 retailers in this state, to be sold by those retailers;
34 (45) "Subjobber" means any person, other than a manufacturer or distribu-
35 tor, who buys tobacco products from a distributor and sells them to persons
36 other than the ultimate consumers;
37 (56) "Retailer" means any person engaged in the business of selling
38 tobacco products to ultimate consumers;
39 (67) "Sale" means any transfer, exchange, or barter, in any manner or by
40 any means whatsoever, for a consideration, and includes and means all sales
41 made by any person. It includes a gift by a person engaged in the business of
42 selling tobacco products, for advertising, as a means of evading the provi-
43 sions of this chapter, or for any other purposes whatsoever;
2
1 (78) "Wholesale sales price" means the established price for which a man-
2 ufacturer sells a tobacco product to a distributor, exclusive of any discount
3 or other reduction;
4 (89) "Business" means any trade, occupation, activity, or enterprise
5 engaged in for the purpose of selling or distributing tobacco products in this
6 state;
7 (910) "Place of business" means any place where tobacco products are manu-
8 factured, stored, or kept for the purpose of sale or consumption, including
9 any vessel, vehicle, airplane, train, or vending machine;
10 (101) "Retail outlet" means each place of business from which tobacco
11 products are sold to consumers;
12 (112) "Commission" means the Idaho state tax commission.
13 SECTION 2. That Section 63-2552, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 63-2552. TOBACCO PRODUCTS TAX IMPOSED -- RATE. (1) From and after July 1,
16 1972 2007, there is levied and there shall be collected a tax upon the sale,
17 use, consumption, handling, or distribution of all tobacco products, except
18 moist snuff, in this state at the rate of thirty-five per cent forty percent
19 (3540%) of the wholesale sales price of such tobacco products.
20 (2) Such tax shall be imposed at the time the distributor
21 (a) brings, or causes to be brought, into this state from without the
22 state tobacco products for sale,
23 (b) makes, manufactures, or fabricates tobacco products in this state for
24 sale in this state, or
25 (c) ships or transports tobacco products to retailers in this state, to
26 be sold by those retailers.
27 (2) A floor stocks tax is hereby imposed upon every distributor of
28 tobacco products at the rate of thirty-five per cent (35%) of the wholesale
29 sales price of each tobacco product in his possession or under his control on
30 July 1, 1972.
31 Each distributor, within twenty (20) days after July 1, 1972, shall file a
32 report with the commission, in such form as the commission may prescribe,
33 showing the tobacco products on hand on July 1, 1972, and the amount of tax
34 due thereon.
35 The tax imposed by this subdivision shall be due and payable within twenty
36 (20) days after July 1, 1972, and thereafter shall bear interest at the rate
37 of one per cent (1%) per month
38 (3) The revenues received from the tax imposed by this section and any
39 penalties, interest or deficiency additions, shall be distributed by the tax
40 commission as follows:
41 (a) An amount of money shall be distributed to the state refund account,
42 sufficient to pay current refund claims. All refunds authorized by the
43 commission shall be paid through the state refund account, and those
44 moneys are continuously appropriated.
45 (b) From the balance remaining after deduction of the amounts in para-
46 graph (a) of this subsection, the remaining moneys shall be remitted as
47 follows:
48 (i) Eighty-seven and one-half percent (87.5%) directly to the gen-
49 eral fund;
50 (ii) Six and one-quarter percent (6.25%) shall be subject to appro-
51 priation to the public school income fund to be utilized to facili-
52 tate and provide substance abuse programs in the public school sys-
53 tem, of which amount two hundred fifty thousand dollars ($250,000)
3
1 shall be remitted annually to the state police to increase toxicology
2 laboratory capacity in the bureau of forensic services for drug test-
3 ing of juveniles. The moneys remitted to the state police shall be
4 reviewed annually and any money in excess of the operations needs of
5 the laboratory for juvenile drug testing will be returned to the pub-
6 lic school income fund for substance abuse programs in the public
7 school system. The laboratory may utilize this increased toxicology
8 capacity for adult drug testing to the extent that timely testing for
9 juveniles is not adversely impacted.
10 (iii) Six and one-quarter percent (6.25%) shall be subject to appro-
11 priation to the department of juvenile corrections for distribution
12 quarterly to the counties to be utilized for county juvenile proba-
13 tion services, based upon the percentage the population of the county
14 bears to the population of the state as a whole.
15 SECTION 3. That Sections 63-2552A and 63-2564, Idaho Code, be, and the
16 same are hereby repealed.
17 SECTION 4. That Chapter 25, Title 63, Idaho Code, be, and the same is
18 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
19 ignated as Section 63-2552A, Idaho Code, and to read as follows:
20 63-2552A. TAX IMPOSED ON MOIST SNUFF -- RATE -- DISTRIBUTION OF TAX REVE-
21 NUES. (1) On and after July 1, 2007, there is levied and there shall be col-
22 lected a tax upon the sale, use, consumption, handling, or distribution of
23 moist snuff in this state at the rate of: (a) one dollar ($1.00) per ounce,
24 and a proportionate tax at the like rate on all fractional parts of an ounce
25 of moist snuff, whose wholesale price is two dollars and fifty cents ($2.50)
26 or less per ounce; or (b) at the rate of forty percent (40%) of the wholesale
27 sales price of such moist snuff if the wholesale price is greater than two
28 dollars and fifty cents ($2.50) per ounce. Provided however, each can or pack-
29 age of moist snuff containing a net weight of less than one (1) ounce of moist
30 snuff shall be taxed at the equivalent rate of a can or package containing
31 moist snuff weighing one (1) ounce if the one dollar ($1.00) per ounce tax
32 rate is being used. Such tax shall be imposed at the time the distributor
33 ships or transports moist snuff to retailers in this state to be sold by those
34 retailers.
35 (2) Each distributor, within twenty (20) days after July 1, 2007, shall
36 file a report with the commission, in such form as the commission may pre-
37 scribe, showing the moist snuff on hand on July 1, 2007, and the amount of tax
38 due thereon. The tax imposed in this section shall be due and payable within
39 twenty (20) days after July 1, 2007, and thereafter shall bear interest as
40 provided in section 63-3045, Idaho Code. If the distributor has previously
41 paid tax to the state of Idaho upon the moist snuff on hand on July 1, 2007,
42 the distributor shall pay the tax due pursuant to this section, but shall be
43 entitled to credit thereon for taxes previously paid on such moist snuff pur-
44 suant to the law in effect prior to July 1, 2007.
45 (3) The revenues received from the tax collected pursuant to this sec-
46 tion and any deficiency additions, shall be distributed by the state tax com-
47 mission as follows:
48 (a) An amount of money shall be distributed to the state refund account,
49 sufficient to pay current refund claims. All refunds authorized by the
50 commission shall be paid through the state refund account, and those
51 moneys are continuously appropriated.
52 (b) The sum of one million dollars ($1,000,000) shall be subject to
4
1 appropriation to the substance abuse treatment fund.
2 (c) From the balance remaining after deduction of the amounts in para-
3 graphs (a) and (b) of this subsection, the remaining moneys shall be
4 remitted as follows:
5 (i) Eighty-seven and one-half percent (87.5%) directly to the gen-
6 eral fund;
7 (ii) Six and one-quarter percent (6.25%) shall be subject to appro-
8 priation to the public school income fund to be utilized to facili-
9 tate and provide substance abuse programs in the public school sys-
10 tem, of which amount two hundred fifty thousand dollars ($250,000)
11 shall be remitted annually to the state police to increase toxicology
12 laboratory capacity in the bureau of forensic services for drug test-
13 ing of juveniles. The moneys remitted to the state police shall be
14 reviewed annually and any money in excess of the operations needs of
15 the laboratory for juvenile drug testing will be returned to the pub-
16 lic school income fund for substance abuse programs in the public
17 school system. The laboratory may utilize this increased toxicology
18 capacity for adult drug testing to the extent that timely testing for
19 juveniles is not adversely impacted.
20 (iii) Six and one-quarter percent (6.25%) shall be subject to appro-
21 priation to the department of juvenile corrections for distribution
22 quarterly to the counties to be utilized for county juvenile proba-
23 tion services, based upon the percentage the population of the county
24 bears to the population of the state as a whole.
STATEMENT OF PURPOSE
RS 17119C2
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 the wholesale price for such tobacco products.
This legislation will also provide a dedicated revenue
source of funding for substance abuse treatment programs.
FISCAL NOTE
This change in tax methodology for moist snuff will
result in approximately a $1,000,000 increase in tax
revenue. $1,000,000 will be dedicated to the Substance Abuse
Treatment Fund.
CONTACT:
Representative Lake
332-1000
Ken Burgess
Phone: 385-7070
STATEMENT OF PURPOSE/FISCAL NOTE H 275