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H0358...............................................by REVENUE AND TAXATION
CIGARETTES - PERMITS - Adds to and amends existing law to provide that a
cigarette permit held by a person who reports no cigarette activity for
twelve consecutive months shall expire automatically; to revise the
definition of "wholesale sales price" for tobacco tax purposes; and to
impose a tobacco products use tax on tobacco products not otherwise taxed.
01/17 House intro - 1st rdg - to printing
01/18 Rpt prt - to Rev/Tax
01/21 Rpt out - rec d/p - to 2nd rdg
01/22 2nd rdg - to 3rd rdg
01/24 3rd rdg - PASSED - 68-2-0
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew,
Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Harwood,
Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador, Lake,
LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Raybould,
Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
Shepherd(08), Shirley, Shively, Smith(30), Smith(24), Snodgrass,
Stevenson, Thayn, Trail, Vander Woude, Wills, Wood(27), Wood(35), Mr.
Speaker
NAYS -- Bowers, Thomas
Absent and excused -- None
Floor Sponsor - Smith(24)
Title apvd - to Senate
01/25 Senate intro - 1st rdg - to Loc Gov
02/06 Rpt out - rec d/p - to 2nd rdg
02/07 2nd rdg - to 3rd rdg
02/12 3rd rdg - PASSED - 34-0-1
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Geddes, Goedde,
Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little,
Lodge, Malepeai(Sagness), McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- Gannon
Floor Sponsor - Stegner
Title apvd - to House
02/13 To enrol
02/14 Rpt enrol - Sp signed
02/15 Pres signed
02/18 To Governor
02/19 Governor signed
Session Law Chapter 20
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 358 BY REVENUE AND TAXATION COMMITTEE 1 AN ACT 2 RELATING TO TAXES ON CIGARETTE AND TOBACCO PRODUCTS; AMENDING SECTION 63-2503, 3 IDAHO CODE, TO PROVIDE THAT A CIGARETTE PERMIT HELD BY A PERSON WHO 4 REPORTS NO CIGARETTE ACTIVITY FOR TWELVE CONSECUTIVE MONTHS SHALL EXPIRE 5 AUTOMATICALLY; AMENDING SECTION 63-2551, IDAHO CODE, TO REVISE THE DEFINI- 6 TION OF "WHOLESALE SALES PRICE"; AND AMENDING CHAPTER 25, TITLE 63, IDAHO 7 CODE, BY THE ADDITION OF A NEW SECTION 63-2552B, IDAHO CODE, TO IMPOSE A 8 TOBACCO PRODUCTS USE TAX ON TOBACCO PRODUCTS NOT OTHERWISE TAXED. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Section 63-2503, Idaho Code, be, and the same is hereby 11 amended to read as follows: 12 63-2503. PERMITS. (1) It shall be unlawful for a person to act as a 13 wholesaler of cigarettes without a permit. The permit shall be obtained by 14 application to the tax commission upon a form furnished by it, accompanied by 15 a fee of fifty dollars ($50.00). The wholesaler permit shall be nonassignable 16 and shall continue in force until surrendered or canceled. 17 (2) It shall be unlawful for any retailer to purchase, sell, offer for 18 sale, distribute, store or possess any cigarettes without first applying for 19 and receiving a seller's permit under section 63-3620, Idaho Code. 20 (3) A permit shall be held only by persons actively engaged in making 21 wholesale sales of cigarettes subject to tax under this chapter. Any person 22 not so engaged shall forthwith surrender his permit to the state tax commis- 23 sion for cancellation. 24 (4) Whenever any person fails to comply with any provision of this chap- 25 ter relating to the purchase, sale or offering for sale or distribution of 26 cigarettes or any rules of the state tax commission relating to the cigarette 27 tax prescribed and adopted under this chapter, the state tax commission may 28 revoke or suspend any permit held by the person or may deny a new permit to 29 such person. 30 (5) The state tax commission may revoke the permit of a person not activ- 31 ely engaged in activities requiring a permit under this section. 32 (6) Notice of revocation shall be given in the manner provided for defi- 33 ciencies in taxes in section 63-3629, Idaho Code, which shall be subject to 34 review as provided in section 63-3631, Idaho Code. 35 (7) A permit, held by a person who for a period of twelve (12) consecu- 36 tive monthsreports no cigarette tax duefiles reports showing no cigarette 37 activity reportable under this chapter, shall expire automatically upon the 38 state tax commission providing notice of the expiration to the last known 39 address of the person to whom the permit was issued. 40 (8) A person who engaged in activities requiring a permit under this sec- 41 tion without a permit or after a permit has been revoked or suspended, and any 42 person who is a responsible person, as defined in section 63-3627, Idaho 43 Code, of such a business shall, after receiving written notice from the state 2 1 tax commission, be subject to a civil penalty not in excess of one hundred 2 dollars ($100), and each day shall constitute a separate offense, which the 3 state tax commission may assess as a deficiency pursuant to section 63-2516, 4 Idaho Code. 5 SECTION 2. That Section 63-2551, Idaho Code, be, and the same is hereby 6 amended to read as follows: 7 63-2551. TOBACCO PRODUCTS TAX -- DEFINITIONS. As used in this act: 8 (1) "Tobacco products" shall mean any cigars, cheroots, stogies, smoking 9 tobacco (including granulated, plug, cut, crimp cut, ready rubbed and any 10 other kinds and forms of tobacco suitable for smoking in a pipe or cigarette), 11 chewing tobacco (including cavendish, twist, plug, scrap and any other kinds 12 and forms of tobacco suitable for chewing) and snuff, however prepared; and 13 shall include any other articles or products made of tobacco or any substitute 14 therefor, except cigarettes; 15 (2) "Manufacturer" means a person who manufactures and sells tobacco 16 products; 17 (3) "Distributor" means (a) any person engaged in the business of selling 18 tobacco products in this state who brings, or causes to be brought, into this 19 state from without the state any tobacco products for sale, (b) any person who 20 makes, manufactures, or fabricates tobacco products in this state for sale in 21 this state, (c) any person engaged in the business of selling tobacco products 22 without this state who ships or transports tobacco products to retailers in 23 this state, to be sold by those retailers; 24 (4) "Subjobber" means any person, other than a manufacturer or distribu- 25 tor, who buys tobacco products from a distributor and sells them to persons 26 other than the ultimate consumers; 27 (5) "Retailer" means any person engaged in the business of selling 28 tobacco products to ultimate consumers; 29 (6) "Sale" means any transfer, exchange, or barter, in any manner or by 30 any means whatsoever, for a consideration, and includes and means all sales 31 made by any person. It includes a gift by a person engaged in the business of 32 selling tobacco products, for advertising, as a means of evading the provi- 33 sions of this chapter, or for any other purposes whatsoever; 34 (7) "Wholesale sales price" means the established price for which a manu- 35 facturer sells a tobacco product to a distributor that is not a related person 36 as defined in section 267 of the Internal Revenue Code, exclusive of any dis- 37 count or other reduction; 38 (8) "Business" means any trade, occupation, activity, or enterprise 39 engaged in for the purpose of selling or distributing tobacco products in this 40 state; 41 (9) "Place of business" means any place where tobacco products are manu- 42 factured, stored, or kept for the purpose of sale or consumption, including 43 any vessel, vehicle, airplane, train, or vending machine; 44 (10) "Retail outlet" means each place of business from which tobacco prod- 45 ucts are sold to consumers; 46 (11) "Commission" means the Idaho state tax commission. 47 SECTION 3. That Chapter 25, Title 63, Idaho Code, be, and the same is 48 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 49 ignated as Section 63-2552B, Idaho Code, and to read as follows: 50 63-2552B. TOBACCO PRODUCTS USE TAX. Any person who does not hold a 51 tobacco products tax permit who possesses, purchases or consumes tobacco prod- 3 1 ucts upon which tax imposed by this chapter has not been paid, including 2 tobacco products sold by internet, catalog, telephone and facsimile sellers, 3 is liable for the taxes imposed by sections 63-2552 and 63-2552A, Idaho Code, 4 to be reported and paid as required in section 63-2560, Idaho Code.
STATEMENT OF PURPOSE
RS 17383
This bill makes three updates to the statutes relating to
taxes on cigarettes and tobacco products.
First, the bill changes the provision for automatic
expiration of cigarette tax permits. A permit will expire
after twelve months of reporting no cigarette purchases or
sales, rather than no tax. This change allows a person
required to report activity, but having no tax to retain a
permit.
Second, the bill modifies the definition of “wholesale
sales price,” on which the tobacco products tax is based.
The change excludes sales by a manufacturer to a related
wholesaler because related party sales may not be at true
market prices.
Third, the bill adds a tobacco products use tax to
require payment of taxes on products purchased from
unlicensed sellers such as Internet and catalog sellers.
FISCAL NOTE
Item 2 increases tobacco tax revenue by $100,000
Item 3 increases tobacco tax revenue by $150,000
CONTACT
Name: Ted Spangler/Dan John
Agency: State Tax Commission
Phone: 334-7530
STATEMENT OF PURPOSE/FISCAL NOTE H 358