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BILL AS INTRODUCED 2007-2008

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H.481

Introduced by Representative Hube of Londonderry

Referred to Committee on

Date:

Subject:  Taxation; tobacco products tax; snuff and roll‑your‑own tobacco

Statement of purpose:  This bill proposes to tax snuff and roll‑your‑own tobacco as tobacco products, at 41 percent of wholesale price.

AN ACT RELATING TO TOBACCO PRODUCTS TAX

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

Sec. 1.  32 V.S.A. § 7702 is amended to read:

§ 7702.  DEFINITIONS

The following words and phrases, as used in this chapter, shall have the following meanings, unless the context otherwise requires:

(1)  “Cigarette” means:

(A)  any roll of tobacco wrapped in paper or wrapped in any substance not containing tobacco; and

* * *

(11)  “Roll‑your‑own tobacco” means any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes.

* * *

(13)  “Snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked.

* * *

Sec. 2.  32 V.S.A. § 7771 is amended to read:

§ 7771.  RATE OF TAX

(a)  A tax is imposed on all cigarettes, and little cigars, and roll‑your‑own tobacco held in this state by any person for sale, unless such products 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 products for 24 hours or less.

Payment of the tax on cigarettes under this subsection shall be evidenced by the affixing of stamps to the packages containing the cigarettes.  Where practicable, the commissioner may also require that stamps be affixed to packages containing little cigars or roll‑your‑own tobacco.  Any cigarette, or little cigar, or roll‑your‑own tobacco on which the tax imposed by this subsection has been paid, such payment being evidenced by the affixing of such stamp or such evidence as the commissioner may require, 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, or little cigars, or roll‑your‑own tobacco.

(b)  A tax is also imposed on all cigarettes, or little cigars, and roll‑your‑own tobacco possessed in this state by any person for any purpose other than sale, as follows:

(1)  This tax shall not apply to:

(A)  products bearing a stamp affixed pursuant to this chapter; or

(B)  products bearing a tax stamp affixed pursuant to the laws of another jurisdiction with a tax rate equal to or greater than the rate set forth in subsection (c) of this section; or

(C)  products purchased outside the state by an individual in quantities of 400 or fewer cigarettes, or little cigars, and 0.09 ounce units of roll‑your‑own tobacco, and brought into the state for that individual’s own use or consumption.  Products that are ordered from a source outside the state and delivered into this state are not “purchased outside the state” within the meaning of this subsection.

(2)  There is allowed a credit against the tax under this subsection for cigarette, cigarettes or little cigars, or roll‑your‑own tobacco tax paid to another jurisdiction and evidenced by tax stamps affixed to the subject products pursuant to the laws of that jurisdiction.

(3)  A person taxable under this subsection shall, within 30 days of first possessing the products in this state, file a return with the commissioner, showing the quantity of products brought into the state.  The return must be made in the form and manner prescribed by the commissioner and be accompanied by remittance of the tax due.

(c)  The tax imposed under this section shall be at the rate of 89.5 mills per cigarette or little cigar and for each 0.09 ounces of roll‑your‑own tobacco.  The interest and penalty provisions of section 3202 of this title shall apply to liabilities under this section.

Sec. 3.  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 except roll‑your‑own tobacco and little cigars taxed under section 7771 of this title 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 percent of the wholesale price for all tobacco products except snuff which shall be taxed at the rate of $1.49 per ounce, or fractional part thereof, 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. 4.  32 V.S.A. § 7814 is amended to read:

§ 7814.  FLOOR STOCK TAX

(a)  Snuff.  A floor stock tax is hereby imposed upon every retailer of snuff in this state in the amount by which the new tax exceeds the amount of the tax already paid on the snuff.  The tax shall apply to snuff in the possession or control of the retailer at 12:01 a.m. o’clock on July 1, 2006, but shall not apply to retailers who hold less than $500.00 in wholesale value of such snuff.  Each retailer subject to the tax shall, on or before July 25, 2006 file a report to the commissioner in such form as the commissioner may prescribe showing the snuff on hand at 12:01 a.m. o’clock on July 1, 2006, and the amount of tax due thereon.  The tax imposed by this section shall be due and payable on or before August 25, 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 snuff 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, little cigars, or roll‑your‑own tobacco.  Notwithstanding the prohibition against further tax on stamped cigarettes, or little cigars, or roll‑your‑own tobacco under section 7771 of this title, a floor stock tax is hereby imposed upon every dealer of cigarettes, or little cigars, or roll‑your‑own tobacco in this state who is either a wholesaler, or a retailer who at 12:01 a.m. o’clock on July 1, 2006, has more than 10,000 cigarettes or little cigars or who has $500.00 or more of wholesale value of roll‑your‑own tobacco, for retail sale in his or her possession or control.  The amount of the tax shall be the amount by which the new tax exceeds the amount of the tax already paid for each cigarette, or little cigar, or roll‑your‑own tobacco in the possession or control of the wholesaler or retailer at 12:01 a.m. o’clock on July 1, 2006, and on which cigarette stamps have been affixed before July 1, 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, 2006, and not yet affixed to a cigarette package, and the tax shall be at the rate of 60 cents per stamp.  Each wholesaler and retailer subject to the tax shall, on or before July 25, 2006, file a report to the commissioner in such form as the commissioner may prescribe showing the cigarettes, or little cigars, or roll‑your‑own tobacco and stamps on hand at 12:01 a.m. o’clock on July 1, 2006, and the amount of tax due thereon.  The tax imposed by this section shall be due and payable on or before August 25, 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, or little cigars, or roll‑your‑own tobacco 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. 5.  Sec. 40 of No. 191 of the Acts of the 2005 Adj. Sess. (2006) is amended to read:

Sec. 40.  CIGARETTE AND TOBACCO PRODUCTS; EFFECTIVE DATE;

               INCREASE

(a)  Secs. 36 through 39 of this act and this section shall take effect July 1, 2006.

(b)  On and after July 1, 2008, the tax on cigarettes imposed by 32 V.S.A. § 7771 shall be at the rate of 99.5 mills:

(1)  for each cigarette or little cigar; and

(2)  for each 0.09 of an ounce of roll‑your‑own tobacco.

(c)  On July 1, 2008, the tax on snuff imposed by 32 V.S.A. § 7811 on snuff shall be at the rate of $1.66 per ounce or fractional part thereof.

(d)  On July 1, 2008, the floor stock tax imposed by 32 V.S.A. § 7814(b) shall be at the rate of 10 mills:

(1)  for each cigarette or little cigar in the possession or control of a wholesaler or retailer who has more than 10,000 cigarettes or little cigars on July 1, 2008; and

(2)  for each 0.09 of an ounce of roll‑your‑own tobacco in the possession or control of a wholesaler or retailer who has $500.00 or more of retail value of roll‑your‑own tobacco on July 1, 2008.

(e)  On July 1, 2008, the floor stock tax imposed by 32 V.S.A. § 7814(a) shall be at the rate of 17 cents per ounce or fraction thereof on snuff in the possession or control of a retailer who has $500.00 or more in wholesale value of snuff on July 1, 2008.

(f)  The floor stock tax imposed by subsections subsection (d) and (e) of this section shall be reported by the wholesaler or dealer on or before July 25, 2008 and shall be due and payable on or before August 25, 2008.

Sec. 6.  EFFECTIVE DATE

This act shall take effect July 1, 2007.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us