Bill Text: CA AB1901 | 2015-2016 | Regular Session | Chaptered
Bill Title: Taxation: cigarettes: unaffixed stamps.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Passed) 2016-09-26 - Chaptered by Secretary of State - Chapter 662, Statutes of 2016. [AB1901 Detail]
Download: California-2015-AB1901-Chaptered.html
BILL NUMBER: AB 1901 CHAPTERED
BILL TEXT
CHAPTER 662
FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2016
APPROVED BY GOVERNOR SEPTEMBER 26, 2016
PASSED THE SENATE AUGUST 18, 2016
PASSED THE ASSEMBLY AUGUST 24, 2016
AMENDED IN SENATE AUGUST 1, 2016
AMENDED IN ASSEMBLY MARCH 14, 2016
INTRODUCED BY Assembly Member Quirk
FEBRUARY 11, 2016
An act to amend Section 30473.5 of the Revenue and Taxation Code,
relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1901, Quirk. Taxation: cigarettes: unaffixed stamps.
The Cigarette and Tobacco Products Tax Law imposes a tax on
distributors of cigarettes at the rate of $0.87 per package of 20
cigarettes. That law requires that tax be paid through the use of
stamps or meter impressions, and requires that these stamps or meter
impressions be affixed to each package of cigarettes distributed.
That law also imposes a fine of up to $50,000, as specified, or
imprisonment not to exceed one year in county jail, or both, for
possessing, selling, or buying false or fraudulent cigarette tax
stamps or meter impressions, and requires the destruction by the
State Board of Equalization of any stamps seized. Existing law
requires any fines assessed to be deposited in the Cigarette and
Tobacco Products Compliance Fund, amounts in which are available for
specified expenditure upon appropriation by the Legislature.
This bill would extend those penalties for possessing, selling, or
buying unaffixed cigarette tax stamps, and would require any fines
assessed to be deposited in the Cigarette and Tobacco Products
Compliance Fund. This bill would require the board to destroy any
unaffixed cigarette tax stamps.
By expanding the scope of existing crimes, this bill imposes a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Existing law does not allow the State Board of Equalization to
seize and destroy used cigarette tax stamps aggregated for reuse
purposes nor does it provide criminal sanctions or penalties related
to a person's possession, sale, or purchase of used cigarette tax
stamps.
(b) Unlike postage stamps or trading cards that are collectibles
with value, used cigarette tax stamp collections have value for
purposes solely related to tax evasion. Board staff has identified
some significant tax evasion incidents. During enforcement operations
at retail shops, board staff found unaffixed and used stamps in
storage units that were prepared for affixation to cigarette packs.
One of these cases uncovered a collection of unaffixed and used
stamps with a cumulative value of over $178,000.
(c) Criminalizing the possession, sale, or purchase of unaffixed,
used cigarette stamps aggregated for reuse purposes and authorizing
the board to seize and destroy those stamps will combat tax evasion
before it occurs and assist in making the marketplace fair and
equitable for those distributors who legitimately pay their cigarette
excise taxes.
SEC. 2. Section 30473.5 of the Revenue and Taxation Code is
amended to read:
30473.5. (a) Any person who possesses, sells, or offers to sell,
or buys or offers to buy, any false, fraudulent, or unaffixed stamps
or meter impressions provided for or authorized under this part in a
quantity of less than 2,000 is guilty of a misdemeanor, punishable by
a fine not to exceed five thousand dollars ($5,000) or imprisonment
not exceeding one year in a county jail, or by both the fine and
imprisonment.
(b) Any person who possesses, sells, or offers to sell, or buys or
offers to buy, any false, fraudulent, or unaffixed stamps or meter
impressions provided for or authorized under this part in a quantity
of 2,000 or greater, is guilty of a misdemeanor, punishable by a fine
not to exceed fifty thousand dollars ($50,000) or imprisonment not
exceeding one year in a county jail, or by both the fine and
imprisonment. The court shall order any fines assessed be deposited
in the Cigarette and Tobacco Products Compliance Fund.
(c) For purposes of this section, "unaffixed stamps" means stamps
for which the tax has previously been paid by a licensed distributor
and previously affixed to a package. "Unaffixed stamps" do not
include any unused and unapplied rolls of stamps or loose stamps
acquired from the board or its authorized agent and in the possession
of a licensed distributor.
(d) The board shall destroy any stamps seized under this section.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
