Bill Text: GA SB281 | 2011-2012 | Regular Session | Introduced

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Bill Title: Taxes; provide any taxes imposed on cigars on/after 1/1/2012 shall be collected/paid through the use of stamps

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2011-04-12 - Senate Read and Referred [SB281 Detail]

Download: Georgia-2011-SB281-Introduced.html

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11 LC 36 1905

Senate Bill 281

By: Senators Ligon, Jr. of the 3rd, Shafer of the 48th, Carter of the 1st and Albers of the 56th

A BILL TO BE ENTITLED
AN ACT

To amend Chapter 11 of Title 48 of the Official Code of Georgia Annotated, relating to taxes on tobacco products, so as to provide that any taxes imposed on cigars on or after January 1, 2012, shall be collected and paid through the use of stamps; to provide that the commissioner of revenue shall provide by regulation for stamps to be affixed to cigars prior to April 10, 2012, for which taxes are collected and paid prior to January 1, 2012; to provide for changes throughout the chapter to certain provisions in order to remove references to the collection and payment of taxes on cigars using an alternate method; to provide for related matters; to provide for effective dates; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
PART I
SECTION 1-1.

Chapter 11 of Title 48 of the Official Code of Georgia Annotated, relating to taxes on tobacco products, is amended by revising Code Section 48-11-3, relating to collection of tax by stamps, sale at discount to distributors, basis of discount percentage, alternate method of collection of tax on cigars, prohibition of sale or exchange of stamps with another distributor, and redemption, as follows:

"48-11-3.

(a) Except as otherwise provided in this Code section, the taxes imposed by Code Section 48-11-2 shall be collected and paid through the use of stamps. The commissioner shall secure stamps of such design and materials as the commissioner deems appropriate to protect the revenue and shall sell the stamps to licensed distributors at a discount of not less than 2 percent and not more than 8 percent of the value of the stamps. The exact percentage of the discount shall be based on brackets according to the volume of cigars, cigarettes, and loose or smokeless tobacco handled by the distributor pursuant to regulations promulgated by the commissioner. The commissioner shall prescribe by regulation the condition, method, and manner in which stamps are to be affixed to containers of cigars, cigarettes, and loose or smokeless tobacco.

(b)(1)(A) The Prior to January 1, 2012, the commissioner may prescribe by regulation an alternate method, in lieu of the sale of stamps, of collecting and paying the tax imposed upon cigars and little cigars. Any such regulations shall be promulgated so that use of the alternate method will result in the same revenue to the state as the state would realize through the sale of stamps to the distributors.

(B) Beginning on January 1, 2012, the taxes imposed upon cigars shall be collected and paid through the use of stamps as provided in subsection (a) of this Code Section. The commissioner shall prescribe by regulation the condition, method, and manner in which stamps are to be affixed to containers of cigars for which taxes imposed upon cigars were collected and paid by an alternate method prior to January 1, 2012, such that all such containers of cigars for which taxes have been collected and paid imposed by Code Section 48-11-2 shall be required to have an affixed stamp as of April 10, 2012.

(2) The commissioner may also prescribe by regulation an alternate method, in lieu of the sale of stamps, of collecting and paying the tax imposed on loose or smokeless tobacco. Any such regulations shall be promulgated so that use of the alternate method will result in the same revenue to the state as the state would realize through the sale of stamps to the distributors.

(c) No distributor shall sell or exchange with another distributor any stamps issued pursuant to this chapter. The commissioner is authorized to redeem at cost price any stamps presented for redemption by a licensed distributor when the commissioner determines from physical inspection that no cigars, cigarettes, or loose or smokeless tobacco has been sold by the distributor under pretense of the tax imposed by this chapter having been paid through use of the stamps."

PART II
SECTION 2-1.

Said chapter is further amended by revising Code Section 48-11-3, relating to collection of tax by stamps, sale at discount to distributors, basis of discount percentage, alternate method of collection of tax on cigars, prohibition of sale or exchange of stamps with another distributor, and redemption, as follows:

"48-11-3.

(a) Except as otherwise provided in this Code section, the taxes imposed by Code Section 48-11-2 shall be collected and paid through the use of stamps. The commissioner shall secure stamps of such design and materials as the commissioner deems appropriate to protect the revenue and shall sell the stamps to licensed distributors at a discount of not less than 2 percent and not more than 8 percent of the value of the stamps. The exact percentage of the discount shall be based on brackets according to the volume of cigars, cigarettes, and loose or smokeless tobacco handled by the distributor pursuant to regulations promulgated by the commissioner. The commissioner shall prescribe by regulation the condition, method, and manner in which stamps are to be affixed to containers of cigars, cigarettes, and loose or smokeless tobacco.

(b) The commissioner may prescribe by regulation an alternate method, in lieu of the sale of stamps, of collecting and paying the tax imposed upon cigars and little cigars. The commissioner may also prescribe by regulation an alternate method, in lieu of the sale of stamps, of collecting and paying the tax imposed on loose or smokeless tobacco. Any such regulations shall be promulgated so that use of the alternate method will result in the same revenue to the state as the state would realize through the sale of stamps to the distributors.

(c) No distributor shall sell or exchange with another distributor any stamps issued pursuant to this chapter. The commissioner is authorized to redeem at cost price any stamps presented for redemption by a licensed distributor when the commissioner determines from physical inspection that no cigars, cigarettes, or loose or smokeless tobacco has been sold by the distributor under pretense of the tax imposed by this chapter having been paid through use of the stamps."

SECTION 2-2.

Said chapter is further amended by revising Code Section 48-11-8, relating to prohibition of sale or possession of unstamped tobacco products, distributors to affix stamps or otherwise pay tax, payment of tax only once, and reports, as follows:

"48-11-8.

(a)(1) No person shall sell, offer for sale, or possess with intent to sell any cigarettes in this state when the cigarette container does not bear the tax stamps required by Code Section 48-11-3.

(2) No person shall sell, offer for sale, or possess with intent to sell in this state any cigars or little cigars upon which the tax has not been paid under the alternate method of collecting the taxes provided in Code Section 48-11-3 or which do not bear the tax stamps required by Code Section 48-11-3.

(3) No person shall sell, offer for sale, or possess with intent to sell any loose or smokeless tobacco in this state when the loose or smokeless tobacco container does not bear the tax stamps required by Code Section 48-11-3 or upon which the tax has not been paid under the alternate method of collecting the tax provided under Code Section 48-11-3.

(4) No person shall sell, offer for sale, or possess with intent to sell cigarettes as prohibited by Code Section 10-13A-5.

(b) Each distributor at the location for which such distributor's license is issued and in the manner specified by the commissioner shall affix the stamps required by this Code section to each individual package or container of cigarettes or cigars sold or distributed by such distributor, except as prohibited by Code Section 10-13A-5. Each distributor shall comply with the commissioner's regulations for the payment of the tax on cigars or loose or smokeless tobacco as provided in Code Section 48-11-3 or shall affix to each container of cigars or loose or smokeless tobacco sold by such distributor or from which such distributor sells cigars or loose or smokeless tobacco the stamps required by this chapter. The stamps may be affixed or the tax under the alternate method may be paid by a distributor at any time before the cigars, cigarettes, or loose or smokeless tobacco is transferred out of such distributor's possession.

(c) It is the intent of this chapter that the tax imposed by this chapter be paid only once and that, if the distributor acquires stamped cigarettes, tax-paid cigars, stamped cigars, stamped loose or smokeless tobacco, or tax-paid loose or smokeless tobacco, such distributor is not required to affix additional stamps or provide other evidence of payment of the tax.

(d) Every dealer who comes into possession of cigars, cigarettes, or loose or smokeless tobacco not bearing proper tax stamps or other evidence of the tax imposed by this chapter shall report the cigars, cigarettes, or loose or smokeless tobacco to the commissioner prior to displaying, selling, using, or otherwise disposing of the cigars, cigarettes, and loose or smokeless tobacco. After a report, the commissioner shall authorize a licensed distributor to affix the proper stamps to the cigars, cigarettes, and loose or smokeless tobacco or, in the case of cigars or loose or smokeless tobacco, authorize the dealer to remit the tax by the alternate method promulgated by the commissioner in accordance with Code Section 48-11-3. A licensed distributor shall affix the stamps or comply with the alternate regulations when presented a permit for such action issued by the commissioner. A licensed distributor shall stamp cigarettes or cigars or comply with the alternate method provided in this chapter with respect to cigars or loose or smokeless tobacco, other than such distributor's own, only when authorized by the permit issued by the commissioner.

(e) No wholesale or retail distributor or wholesale or retail dealer shall accept deliveries of unstamped cigars, cigarettes, or loose or smokeless tobacco or nontax-paid cigars or loose or smokeless tobacco which is shipped to such distributor or acquired by such distributor at any place within the state except as authorized and provided in this Code section. All cigars, cigarettes, and loose or smokeless tobacco shall be examined by the distributor or dealer on receipt, and the distributor shall immediately report the cigars, cigarettes, or loose or smokeless tobacco to the commissioner as provided in subsection (d) of this Code section.

(f) The commissioner may prescribe the charges which may be made by a distributor to any person for the services of the distributor as provided in this chapter in affixing the tax stamps to each individual package or container of cigars, cigarettes, or loose or smokeless tobacco and may prescribe the charges which may be made by a distributor in complying with the commissioner's alternate regulations for the collection of the tax on cigars and little cigars or loose or smokeless tobacco.

(g) This Code section shall not apply to unstamped cigars and little cigars or loose or smokeless tobacco upon which the tax has been paid in accordance with the alternate regulations promulgated by the commissioner under Code Section 48-11-3."

SECTION 2-3.

Said chapter is further amended by revising Code Section 48-11-9, relating to seizure as contraband of unstamped tobacco products, exceptions, sale at public auction, procedure, disposition of proceeds, hearing, bond, and contraband vending machines, as follows:

"48-11-9.

(a)(1) Any cigars, cigarettes, or loose or smokeless tobacco found at any place in this state without stamps affixed to them as required by this chapter and any cigarettes seized pursuant to subsection (b) of Code Section 10-13A-8 are declared to be contraband articles and may be seized by the commissioner, the commissioner's agents or employees, or any peace officer of this state when directed by the commissioner to do so.

(2) Paragraph (1) of this subsection shall not apply when:

(A) The tax has been paid on the unstamped cigars and little cigars or loose or smokeless tobacco in accordance with the commissioner's regulations promulgated pursuant to Code Section 48-11-3;

(B) The cigars, cigarettes, or loose or smokeless tobacco is in the possession of a licensed distributor;

(C) The cigars, cigarettes, or loose or smokeless tobacco is in course of transit from outside the state and is consigned to a licensed distributor;

(D) The cigars, cigarettes, or loose or smokeless tobacco is in the possession of a transporter who is in compliance with Code Section 48-11-22; or

(E) The cigars, cigarettes, or loose or smokeless tobacco is in the possession of a registered taxpayer as defined in Code Section 48-11-14 and the time for making the report required by Code Section 48-11-14 has not expired.

(3) This subsection shall not be construed to require the commissioner to confiscate unstamped or nontax-paid cigars, cigarettes, and loose or smokeless tobacco or other property when the commissioner has reason to believe that the owner of the cigars, cigarettes, loose or smokeless tobacco, or property is not willfully or intentionally evading the tax imposed by this chapter.

(b) Any cigars, cigarettes, loose or smokeless tobacco, or other property seized pursuant to this chapter may be offered for sale by the commissioner, at the commissioner's discretion, at public auction to the highest bidder after advertisement as provided in this Code section. The commissioner shall deliver to the Office of the State Treasurer the proceeds of any sale made under this Code section. Before delivering any cigars, cigarettes, or loose or smokeless tobacco sold to a purchaser at the sale, the commissioner shall require the purchaser to affix to the packages the amount of stamps required by this chapter or to comply with the commissioner's alternate method. The seizure and sale of any cigars, cigarettes, loose or smokeless tobacco, or property pursuant to this chapter shall not relieve any person from a fine, imprisonment, or other penalty for violation of this chapter.

(c) When any cigars, cigarettes, loose or smokeless tobacco, or other property has been seized pursuant to this chapter, the commissioner, at the commissioner's discretion, may advertise it for sale in a newspaper published or having a circulation in the place in which the seizure occurred, at least five days before the sale. Any person claiming an interest in the cigars, cigarettes, loose or smokeless tobacco, or other property may make written application to the commissioner for a hearing. The application shall state the person's interest in the cigars, cigarettes, loose or smokeless tobacco, or other property and such person's reasons why the cigars, cigarettes, loose or smokeless tobacco, or other property should not be forfeited. Further proceedings on the application for hearing shall be taken as provided in subsection (a) of Code Section 48-11-18. No sale of any cigars, cigarettes, loose or smokeless tobacco, or property seized pursuant to this chapter shall be made while an application for a hearing is pending before the commissioner. The pendency of an appeal under subsection (b) of Code Section 48-11-18 shall not prevent the sale unless the appellant posts a satisfactory bond with surety in an amount double the estimated value of the cigars, cigarettes, loose or smokeless tobacco, or other property and conditioned upon the successful termination of the appeal.

(d) Any vending machine containing or dispensing any cigars, cigarettes, or loose or smokeless tobacco which does not bear the tax stamps required under this chapter or containing or dispensing any cigars or loose or smokeless tobacco upon which the tax has not been paid either through the purchase of stamps or the alternate procedure provided by the commissioner as required under this chapter shall be a contraband article. The commissioner may seize any such machine and deal with it in the same manner as provided by law for the seizure and sale of unstamped cigarettes, cigars, or loose or smokeless tobacco and nontax-paid cigars or loose or smokeless tobacco.

SECTION 2-4.

Said chapter is further amended by revising subsection (a) of Code Section 48-11-12, relating to assessment of deficiencies and penalties for incorrect reports, nonpayment of tax, or purchase of insufficient stamps, assumption of illegal sale absent evidence to contrary, and penalty for deficiency due to fraud, as follows:

"48-11-12.

(a)(1) The commissioner shall assess a deficiency and may assess a penalty of 10 percent of the deficiency if, after an examination of the invoices, books, and records of a licensed distributor or dealer or of any other information obtained by the commissioner or the commissioner's authorized agents, the commissioner determines that:

(A) The report of the licensed distributor or licensed dealer is incorrect;

(B) The licensed distributor or dealer has not paid the tax in accordance with the alternate regulations promulgated by the commissioner under Code Section 48-11-3; or

(C) The licensed distributor or dealer has not purchased sufficient stamps to cover such licensed distributor or dealer's receipts for sales or other disposition of unstamped cigars, cigarettes, or loose or smokeless tobacco and nontax-paid cigars or loose or smokeless tobacco.

(2) In any case where a licensed distributor or dealer cannot produce evidence of sufficient stamps purchased or other payment of the tax to cover the receipt of unstamped cigars, cigarettes, or loose or smokeless tobacco or nontax-paid cigars or loose or smokeless tobacco, it shall be assumed that the cigars, cigarettes, and loose or smokeless tobacco were sold without having either the proper stamps affixed or the tax paid on unstamped cigars or loose or smokeless tobacco."

SECTION 2-5.

Said chapter is further amended by revising Code Section 48-11-15, relating to procedure for refund of taxes, cost price of affixed stamps, and tax on tobacco products unfit for sale, use, or consumption and destroyed or exported, as follows:

"48-11-15.

The Office of the State Treasurer is authorized to pay, on the order of the commissioner, claims for refunds of cigar, cigarette, or loose or smokeless tobacco taxes found by the commissioner or the courts to be due any distributor, dealer, or taxpayer. The commissioner, upon proof satisfactory to the commissioner and in accordance with regulations promulgated by the commissioner, shall refund the cost price of stamps affixed to any package or container of cigars, cigarettes, or loose or smokeless tobacco or shall refund the tax paid on cigars or loose or smokeless tobacco under the alternate method when the cigars, cigarettes, or loose or smokeless tobacco has become unfit for use, consumption, or sale and has been destroyed or shipped out of the state."

SECTION 2-6.

Said chapter is further amended by revising Code Section 48-11-23.1, relating to additional requirements on the sale of tobacco products, seizure and forfeiture of contraband, and revocation of licenses, as follows:

"48-11-23.1.

(a) As used in this Code section, the term 'package' means a pack, carton, or container of any kind in which cigars, cigarettes or loose or smokeless tobacco is offered for sale, sold, or otherwise distributed, or intended for distribution, to consumers.

(b) No tax stamp may be affixed to, or made upon, any package of cigars, cigarettes, or loose or smokeless tobacco if:

(1) The package differs in any respect with the requirements of the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. Sec. 1331, et seq., for the placement of labels, warnings, or any other information upon a package of cigarettes or loose or smokeless tobacco that is to be sold within the United States;

(2) The package is labeled 'For Export Only,' 'U.S. Tax Exempt,' 'For Use Outside U.S.,' or similar wording indicating that the manufacturer did not intend that the product be sold in the United States;

(3) The package, or a package containing individually stamped packages, has been altered by adding or deleting the wording, labels, or warnings described in paragraph (1) or (2) of this subsection;

(4) The package has been imported into the United States after January 1, 2000, in violation of 26 U.S.C. Sec. 5754;

(5) The package in any way violates federal trademark or copyright laws; or

(6) The package in any way violates Code Section 10-13A-5.

(c) Any person who sells or holds for sale a cigar, cigarette, or loose or smokeless tobacco package to which is affixed a tax stamp in violation of subsection (b) of this Code section shall be guilty of a misdemeanor.

(d) Notwithstanding any other provision of law, the commissioner may revoke any license issued under this chapter to any person who sells or holds for sale a cigar, cigarette, or loose or smokeless tobacco package to which is affixed a tax stamp in violation of subsection (b) of this Code section.

(e) Notwithstanding any other provision of law, the commissioner may seize and destroy or sell to the manufacturer, only for export, packages that do not comply with subsection (b) of this Code section.

(f) A violation of subsection (b) of this Code section shall constitute an unfair and deceptive act or practice under Part 2 of Article 15 of Chapter 1 of Title 10, the 'Fair Business Practices Act of 1975.'"

SECTION 2-7.

Said chapter is further amended by revising subsection (a) of Code Section 48-11-24, relating to penalties for possession of unstamped tobacco products, penalty for operation of unlicensed business or activity, procedure for enforcement and collection of penalties, and costs and expenses, as follows:

"(a) Any person who possesses unstamped cigars, cigarettes, or loose or smokeless tobacco or nontax-paid cigars or loose or smokeless tobacco in violation of this chapter shall be liable for a penalty of not more than $25.00 for each individual carton or container of unstamped cigars, cigarettes, or loose or smokeless tobacco and $50.00 for each individual box container of nontax-paid cigars or loose or smokeless tobacco in his or her possession."

SECTION 2-8.

Said chapter is further amended by revising Code Section 48-11-25, relating to violations of chapter and penalties, as follows:

"48-11-25.

(a)(1) It shall be unlawful for any person, with the intent to evade the tax imposed by this chapter, to possess unstamped cigars, cigarettes, or loose or smokeless tobacco or nontax-paid cigars or loose or smokeless tobacco.

(2) Any person who violates paragraph (1) of this subsection shall be guilty of a misdemeanor.

(b)(1) It shall be unlawful for any person, with the intent to evade the tax imposed by this chapter, to:

(A) Sell cigars, cigarettes, or loose or smokeless tobacco without the stamps required by this chapter being affixed to the cigars, cigarettes, or loose or smokeless tobacco; or

(B) Sell cigars or loose or smokeless tobacco without the stamp or stamps required by this chapter or without the tax being paid on the cigars or loose or smokeless tobacco in accordance with the alternate method.

(2) Any person who violates paragraph (1) of this subsection shall be guilty of a felony and, upon conviction thereof, shall be imprisoned for not less than one year nor more than ten years."

SECTION 2-9.

Said chapter is further amended by revising subsection (a) of Code Section 48-11-27, relating to false entries on invoices or records pursuant to chapter and penalty, as follows:

"(a) It shall be unlawful for any person to:

(1) Make a false entry upon any invoices or any record relating to the purchase, possession, or sale of cigars, cigarettes, or loose or smokeless tobacco; or

(2) With intent to evade any tax imposed by this chapter, present any false entry upon any such invoice or record for the inspection of the commissioner or the commissioner's authorized agents."

PART III
SECTION 3-1.

(a) Part 1 of this Act and this part shall become effective on July 1, 2011.
(b) Part 2 of this Act shall become effective on April 10, 2012, on which date the amendments made to Code Section 48-11-3 by Part I of this Act shall stand repealed.

SECTION 3-2.

All laws and parts of laws in conflict with this Act are repealed.