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S.287

Introduced by   Senator Lyons of Chittenden District, Senator Ayer of Addison District and Senator Leddy of Chittenden District

Referred to Committee on

Date:

Subject:  Taxation; cigarette and tobacco products taxes; rate increases

Statement of purpose:  This bill proposes to increase the cigarette and tobacco products tax rates.

AN ACT RELATING TO CIGARETTE AND TOBACCO PRODUCTS TAX RATE INCREASES

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  32 V.S.A. § 7771 is amended to read:

§ 7771.  RATE OF TAX

A tax is imposed on all cigarettes held in this state by any person for sale or by any person in possession of more than 10,000 cigarettes, unless such cigarettes shall be:

(1)  in the possession of a licensed wholesale dealer;

(2)  in the course of transit and consigned to a licensed wholesale dealer or retail dealer; or

(3)  in the possession of a retail dealer who has held the cigarettes for 24 hours or less.  Such tax shall be at the rate of 59.5 100 mills for each cigarette, and the payment thereof to be evidenced by the affixing of stamps to the packages containing the cigarettes, as hereinafter provided.  Any cigarette on which the tax imposed by this chapter has been paid, such payment being evidenced by the affixing of such stamp, shall not be subject to a further tax under this chapter.  Nothing contained in this chapter shall be construed to impose a tax on any transaction the taxation of which by this state is prohibited by the constitution of the United States.  The amount of taxes advanced and paid by a licensed wholesale dealer or a retail dealer as herein provided shall be added to and collected as part of the retail sale price on the cigarettes.  All taxes upon cigarettes under this chapter are declared to be a direct tax upon the consumer at retail and shall conclusively be presumed to be precollected for the purpose of convenience and facility only.

Sec. 2.  32 V.S.A. § 7811 is amended to read:

§ 7811.  IMPOSITION OF TOBACCO PRODUCTS TAX

There is hereby imposed and shall be paid a tax on all tobacco products possessed in the state of Vermont by any person for sale on and after July 1, 1959 which were imported into the state or manufactured in the state after said date, except that no tax shall be imposed on tobacco products sold under such circumstances that this state is without power to impose such tax, or sold to the United States, or sold to or by a voluntary unincorporated organization of the armed forces of the United States operating a place for the sale of goods pursuant to regulations promulgated by the appropriate executive agency of the United States.  Such tax on tobacco products shall be at the rate of 41 90 percent of the wholesale price and is intended to be imposed only once upon any tobacco product.  Provided, however, that upon payment of the tax within ten days, the distributor or dealer may deduct from the tax two percent of the tax due.  It shall be presumed that all tobacco products within the state are subject to tax until the contrary is established and the burden of proof that any tobacco products are not taxable hereunder shall be upon the person in possession thereof.

Sec. 3.  32 V.S.A. § 7814 is amended to read:

(a)  Tobacco products.  A floor stock tax is hereby imposed upon every retailer of tobacco products in this state at the rate of 21 49 percent of the wholesale price of each tobacco product.  The tax shall apply to tobacco products in the possession or control of the retailer at 12:01 a.m. o'clock on July 1, 1995 2006, but shall not apply to retailers who hold less than $500.00 in wholesale value of such tobacco products.  Each retailer subject to the tax shall, on or before July 25, 1995 2006, file a report to the commissioner in such form as the commissioner may prescribe showing the tobacco products on hand at 12:01 a.m. o'clock on July 1, 1995 2006, and the amount of tax due thereon.  The tax imposed by this section shall be due and payable on or before July 25, 1995 2006, and thereafter shall bear interest at the rate established under section 3108 of this title.  In case of timely payment of the tax, the retailer may deduct from the tax due two percent of the tax.  Any tobacco product with respect to which a floor stock tax has been imposed and paid under this section shall not again be subject to tax under section 7811 of this title.

(b)  Cigarettes.  Notwithstanding the prohibition against further tax on stamped cigarettes under section 7771 of this title, a floor stock tax is hereby imposed upon every dealer of cigarettes in this state who is either a wholesaler, or a retailer who at 12:01 a.m. o’clock on July 1, 2003 2006, has more than 10,000 cigarettes for retail sale in his or her possession or control.  The rate of tax shall be 13 40.5 mills for each cigarette in the possession or control of the wholesaler or retailer at 12:01 a.m. o’clock on July 1, 2003 2006, and on which cigarette stamps have been affixed before July 1, 2003 2006.  A floor stock tax is also imposed on each Vermont cigarette stamp in the possession or control of the wholesaler at 12:01 a.m. o’clock on July 1, 2003 2006, and not yet affixed to a cigarette package, and the tax shall be at the rate of 26 81 cents per stamp.  Each wholesaler and retailer subject to the tax shall, on or before September 25, 2003 2006, file a report to the commissioner in such form as the commissioner may prescribe showing the cigarettes and stamps on hand at 12:01 a.m. o’clock on July 1, 2003 2006, and the amount of tax due thereon.  The tax imposed by this section shall be due and payable on or before September 25, 2003 2006, and thereafter shall bear interest at the rate established under section 3108 of this title.  In case of timely payment of the tax, the wholesaler or retailer may deduct from the tax due two and three‑tenths of one percent of the tax.  Any cigarettes with respect to which a floor stock tax has been imposed under this section shall not again be subject to tax under section 7771 of this title.

Sec. 4.  EFFECTIVE DATES

This act shall take effect on passage, except that Secs. 1 and 2 of this act shall apply to taxable cigarettes and tobacco products on and after July 1, 2006.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us