Bill Text: HI SB291 | 2018 | Regular Session | Introduced
Bill Title: Relating To Chapter 245, Hawaii Revised Statutes.
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Introduced - Dead) 2017-11-30 - Carried over to 2018 Regular Session. [SB291 Detail]
Download: Hawaii-2018-SB291-Introduced.html
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THE SENATE |
S.B. NO. |
291 |
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TWENTY-NINTH LEGISLATURE, 2017 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to chapter 245, Hawaii revised statutes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that tobacco use is the single most preventable cause of disease, disability, and death in the United States. Tobacco use continues to be a problem in Hawaii, causing approximately 1,400 deaths per year among adults. An estimated 21,000 children in Hawaii currently under the age of eighteen will ultimately die prematurely from smoking. Tobacco use poses a heavy burden on Hawaii's health care system and economy. Each year, smoking costs approximately $526,000,000 in direct health care expenditures and $387,300,000 in lost productivity in the State.
The legislature further finds that cigars are addictive and cause serious health consequences. For example, studies indicate that:
(1) Cigar smoking causes cancer of the oral cavity, larynx, esophagus, and lung;
(2) Daily cigar smokers, particularly those who inhale, have an increased risk of heart disease and chronic obstructive pulmonary disease; and
(3) Cigar smokers are at an increased risk for an aortic aneurysm and have higher rates of lung cancer, heart disease, and lung disease than nonsmokers.
Furthermore, while many believe that cigars are not harmful because cigar smoke is not inhaled, studies show that some cigar smokers do inhale, thereby absorbing smoke into their lungs and bloodstream and depositing smoke particles in their lungs as well as their stomachs and digestive tracts. Cigar smoke is composed of the same toxic and carcinogenic constituents found in cigarette smoke. All cigar smokers, regardless of whether they inhale cigar smoke, expose their lips, tongue, and throat to smoke and its toxic and cancer-causing chemicals.
Moreover, due to their size, cigars can produce even more secondhand smoke than cigarettes and can contain substantially higher levels of carbon monoxide and other toxins than cigarette smoke. To the extent that cigar smoke is not inhaled as deeply as cigarette smoke, secondhand cigar smoke is also less "filtered" than secondhand cigarette smoke before bystanders are exposed to it.
The legislature also finds that while cigarette smoking has generally declined over the past several years, sales of cigars have been rising. One reason for the increase in cigar sales is that many still fail to realize the addiction and health risks associated with cigar smoking. However, another large reason is that almost every state taxes cigars at a much lower rate than it taxes cigarettes. In Hawaii, large cigars are imposed a lower excise tax than cigarettes and other tobacco products. Existing law imposes different rates of tax on various articles of tobacco. For example, the excise tax on wholesalers is equal to sixteen cents per cigarette ($3.20 per pack), which is the same rate for little cigars, however the tax rate is seventy per cent of the wholesale price of each article or item of tobacco products, other than large cigars, sold and fifty per cent of the wholesale price of each large cigar sold.
The legislature additionally finds that taxes on large cigars should be similar to the tax rates imposed on tobacco products pursuant to section 245-3, Hawaii Revised Statutes. Taxes on large cigars are imposed a lower rate than other tobacco products even though cigar use carries similar health risks. Research has shown that either a tax on cigarettes or increase in cigarette prices has the propensity to reduce the rate of smoking by adult and youth smokers. However, the legislature is concerned that as the price of cigarettes and other tobacco products increases, smokers may be tempted to purchase large cigars as they may be more affordable.
Finally, the legislature concludes that there should not be a lower-priced tobacco alternative to cigarettes or other tobacco products in Hawaii. Thus, a similar tax rate for cigarettes and tobacco products that acts as a deterrent for all forms of tobacco use is necessary. Higher tobacco product prices will encourage tobacco users to quit, sustain cessation, prevent youth initiation, and reduce consumption among those who continue to use tobacco.
It is the legislature's intent for large cigars to be subject to the same excise tax rate as tobacco products other than cigarettes and small cigars.
The purpose of this Act is to increase the excise tax from fifty to seventy per cent of the wholesale price of any large cigar sold by a wholesaler or dealer on and after January 1, 2018, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer.
SECTION 2. Section 245-3, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Every wholesaler or dealer, in addition to any other taxes provided by law, shall pay for the privilege of conducting business and other activities in the State:
(1) An excise tax equal to 5.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 1998, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(2) An excise tax equal to 6.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after September 30, 2002, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(3) An excise tax equal to 6.50 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2003, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(4) An excise tax equal to 7.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2004, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(5) An excise tax equal to 8.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2006, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(6) An excise tax equal to 9.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2007, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(7) An excise tax equal to 10.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2008, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(8) An excise tax equal to 13.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after July 1, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(9) An excise tax equal to 11.00 cents for each little cigar sold, used, or possessed by a wholesaler or dealer on and after October 1, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(10) An excise tax equal to 15.00 cents for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2010, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(11) An excise tax equal to 16.00 cents for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2011, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;
(12) An excise tax equal to seventy per cent of the wholesale price of each article or item
of tobacco products, other than large cigars, sold by the wholesaler or dealer
on and after September 30, 2009, whether or not sold at wholesale, or if not
sold then at the same rate upon the use by the wholesaler or dealer; [and]
(13) An excise tax equal to fifty per cent of the
wholesale price of each large cigar of any length, sold, used, or possessed by
a wholesaler or dealer on and after September 30, 2009, whether or not sold at
wholesale, or if not sold then at the same rate upon the use by the wholesaler
or dealer[.]; and
(14) An excise tax equal to seventy per cent of the wholesale price of each large cigar of any length, sold, used, or possessed by a wholesaler or dealer on and after January 1, 2018, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer.
Where the tax imposed has been paid on cigarettes, little cigars, or tobacco products that thereafter become the subject of a casualty loss deduction allowable under chapter 235, the tax paid shall be refunded or credited to the account of the wholesaler or dealer. The tax shall be applied to cigarettes through the use of stamps."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2017.
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INTRODUCED BY: |
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Report Title:
Tobacco Products; Large Cigars; Excise Tax
Description:
Increases the excise tax imposed on large cigars from fifty to seventy per cent of the wholesale price of any large cigar sold by a wholesaler or dealer on and after January 1, 2018, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
