Bill Text: IA HF2339 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to cigarettes, tobacco products, alternative nicotine products, and vapor products, including taxation of such products.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-02-13 - Introduced, referred to Human Resources. H.J. 260. [HF2339 Detail]
Download: Iowa-2017-HF2339-Introduced.html
House File 2339 - Introduced HOUSE FILE BY R. TAYLOR A BILL FOR 1 An Act relating to cigarettes, tobacco products, alternative 2 nicotine products, and vapor products, including taxation of 3 such products. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5901YH (4) 87 pf/jh PAG LIN 1 1 Section 1. Section 453A.6, subsection 1, Code 2018, is 1 2 amended to read as follows: 1 3 1. There is imposed, and shall be collected and paid to the 1 4 department, a tax on all cigarettes used or otherwise disposed 1 5 of in this state for any purpose equal tosix and eight=tenths 1 6fourteen and three=tenths cents on each cigarette. 1 7 Sec. 2. Section 453A.6, subsection 8, paragraph a, Code 1 8 2018, is amended to read as follows: 1 9 a. Pay directly to the department, in lieu of the tax under 1 10 subsection 1, a tax equal tothree and six hundredthsfour 1 11 and four=tenths cents on each cigarette dispensed from such 1 12 machine. 1 13 Sec. 3. Section 453A.15, subsection 4, Code 2018, is amended 1 14 to read as follows: 1 15 4. Every permit holder or other person shall, when requested 1 16 by the department, make additional reports as the department 1 17 deems necessary and proper and shall at the request of the 1 18 department furnish full and complete information pertaining to 1 19 any transaction of the permit holder or other person involving 1 20 the purchase or sale or use of cigarettes, alternative nicotine 1 21 products, or vapor products, or purchase of cigarette stamps. 1 22 The director shall specifically prescribe the forms necessary 1 23 and require each retailer to provide on the forms prescribed, 1 24 full and complete information pertaining to any cigarettes, 1 25 alternative nicotine products, or vapor products offered for 1 26 sale or sold by the retailer, including the type and brand of 1 27 the product. 1 28 Sec. 4. Section 453A.24, subsection 2, Code 2018, is amended 1 29 to read as follows: 1 30 2. The director may require by rule that common carriers 1 31 or the appropriate persons provide monthly reports to the 1 32 department detailing all information the department deems 1 33 necessary on shipments into and out of Iowa of cigarettes, 1 34andtobacco products, alternative nicotine products, or vapor 1 35 products, as set forth in this division I and division II 2 1 of this chapter. The director may require by rule that the 2 2 reports be filed by electronic transmission. 2 3 Sec. 5. Section 453A.32, subsection 6, Code 2018, is amended 2 4 to read as follows: 2 5 6. The provisions of this section applying to cigarettes 2 6 shall also apply to tobacco products, alternative nicotine 2 7 products, and vapor products taxed under division II of this 2 8 chapter. 2 9 Sec. 6. Section 453A.33, Code 2018, is amended to read as 2 10 follows: 2 11 453A.33 Seizure not to affect criminal prosecution. 2 12 The seizure, forfeiture, and sale of cigarettes, tobacco 2 13 products, alternative nicotine products, vapor products, and 2 14 other property under the terms and conditionshereinabove set 2 15 outpursuant to section 453A.32, shall not constitute any 2 16 defense to the person owning or having control or possession of 2 17 the property from criminal prosecution for any act or omission 2 18 made or offense committed under this chapter or from liability 2 19 to pay penalties provided by this chapter. 2 20 Sec. 7. Section 453A.35, subsection 1, paragraph b, Code 2 21 2018, is amended to read as follows: 2 22 b. The revenues generated from the tax on cigarettes 2 23 pursuant to section 453A.6, subsection 1, and from the tax on 2 24 tobacco products, alternative nicotine products, and vapor 2 25 products as specified in section 453A.43, subsections 1, 2, 3, 2 26 and 4, shall be credited to the health care trust fund created 2 27 in section 453A.35A. 2 28 Sec. 8. Section 453A.35A, Code 2018, is amended to read as 2 29 follows: 2 30 453A.35A Health care trust fund. 2 31 1. A health care trust fund is created in the office of 2 32 the treasurer of state. The fund consists of the revenues 2 33 generated from the tax on cigarettes pursuant to section 2 34 453A.6, subsection 1, and from the tax on tobacco products, 2 35 alternative nicotine products, and vapor products as specified 3 1 in section 453A.43, subsections 1, 2, 3, and 4, that are 3 2 credited to the health care trust fund, annually, pursuant to 3 3 section 453A.35. Moneys in the fund shall be separate from 3 4 the general fund of the state and shall not be considered 3 5 part of the general fund of the state. However, the fund 3 6 shall be considered a special account for the purposes of 3 7 section 8.53 relating to generally accepted accounting 3 8 principles. Moneys in the fund shall be used only as specified 3 9 in this section and shall be appropriated only for the uses 3 10 specified. Moneys in the fund are not subject to section 8.33 3 11 and shall not be transferred, used, obligated, appropriated, 3 12 or otherwise encumbered, except as provided in this section. 3 13 Notwithstanding section 12C.7, subsection 2, interest or 3 14 earnings on moneys deposited in the fund shall be credited to 3 15 the fund. 3 16 2. Moneys in the fund shall be used only for purposes 3 17 related to health care including mental health services, 3 18 substance abuse treatment and prevention, and tobacco use 3 19 prevention, cessation, and control. The first nine million 3 20 dollars credited to the fund, annually, shall be used for the 3 21 purposes of tobacco use prevention, cessation, and control in 3 22 accordance with the centers for disease control and prevention 3 23 of the United States department of health and human services' 3 24 most recently published best practices for comprehensive 3 25 tobacco control programs, and the remaining revenue credited, 3 26 annually, to the fund shall be used first for mental health 3 27 services followed by the other specified purposes of the fund. 3 28 Sec. 9. Section 453A.39, subsection 1, Code 2018, is amended 3 29 to read as follows: 3 30 1. A manufacturer, distributor, wholesaler, retailer, 3 31 or distributing agent, or agentthereofan agent of a 3 32 manufacturer, distributor, wholesaler, retailer, or 3 33 distributing agent, shall not give away cigarettes,ortobacco 3 34 products, alternative nicotine products, or vapor products, at 3 35 any time in connection with the manufacturer's, distributor's, 4 1 wholesaler's, retailer's, or distributing agent's business or 4 2 for promotion of the business or product, except as provided in 4 3 subsection 2. 4 4 Sec. 10. Section 453A.40, subsection 1, Code 2018, is 4 5 amended to read as follows: 4 6 1. All persons required to obtain a permit or to be licensed 4 7 under section 453A.13 or section 453A.44 having in their 4 8 possession and held for resale on the effective date of an 4 9 increase in the tax rate cigarettes, little cigars,ortobacco 4 10 products, alternative nicotine products, or vapor products upon 4 11 which the tax under section 453A.6 or 453A.43 has been paid, 4 12 unused cigarette tax stamps which have been paid for under 4 13 section 453A.8, unused metered imprints which have been paid 4 14 for under section 453A.12, or tobacco products, alternative 4 15 nicotine products, or vapor products for which the tax has 4 16 not been paid under section 453A.46 shall be subject to an 4 17 inventory tax on the items as provided in this section. 4 18 Sec. 11. Section 453A.42, Code 2018, is amended to read as 4 19 follows: 4 20 453A.42 Definitions. 4 21 When used in this division, unless the context clearly 4 22 indicates otherwise, the following terms shall have the 4 23 meanings, respectively, ascribed to them in this section: 4 24 1. "Business" means any trade, occupation, activity, 4 25 or enterprise engaged in for the purpose of selling or 4 26 distributing tobacco products, alternative nicotine products, 4 27 or vapor products in this state. 4 28 2. "Consumer" means any person who has title to or 4 29 possession of tobacco products, alternative nicotine products, 4 30 or vapor products in storage, for use or other consumption in 4 31 this state. 4 32 3. "Delivery sale" means any sale of an alternative nicotine 4 33 product or a vapor product to a purchaser in this state where 4 34 the purchaser submits the order for such sale by means of a 4 35 telephonic or other method of voice transmission, mail or any 5 1 other delivery service, or the internet or other online service 5 2 and the alternative nicotine product or vapor product is 5 3 delivered by use of mail or a delivery service. The sale of an 5 4 alternative nicotine product or vapor product shall constitute 5 5 a delivery sale regardless of whether the seller is located 5 6 in this state. "Delivery sale" does not include a sale to a 5 7 distributor or retailer of any alternative nicotine product or 5 8 vapor product not for personal consumption. 5 9 4. "Director" means the director of the department of 5 10 revenue. 5 11 5. "Distributor" means anyand eachof the following: 5 12 a. Any person engaged in the business of selling tobacco 5 13 products, alternative nicotine products, or vapor products 5 14 in this state who brings, or causes to be brought, into this 5 15 state from without the state any tobacco products, alternative 5 16 nicotine products, or vapor products for sale;. 5 17 b. Any person who makes, manufactures, or fabricates tobacco 5 18 products, alternative nicotine products, or vapor products in 5 19 this state for sale in this state;. 5 20 c. Any person engaged in the business of selling tobacco 5 21 products, alternative nicotine products, or vapor products 5 22 without this state who ships or transports tobacco products, 5 23 alternative nicotine products, or vapor products to retailers 5 24 in this state, to be sold by those retailers. 5 25 6. "Little cigar" means any roll for smoking which meets all 5 26 of the following conditions: 5 27 a. Is made wholly or in part of tobacco, irrespective of 5 28 size or shape and irrespective of tobacco being flavored, 5 29 adulterated, or mixed with any other ingredient;. 5 30 b. Is not a cigarette as defined in section 453A.1, 5 31 subsection 4; and. 5 32 c. Either weighs not more than three pounds per thousand, 5 33 irrespective of retail price, or weighs more than three pounds 5 34 per thousand and has a retail price of not more than two 5 35 and one=half cents per little cigar. For purposes of this 6 1 subsection, the retail price is the ordinary retail price in 6 2 this state, not including retail sales tax, use tax, or the tax 6 3 on little cigars imposed by section 453A.43. 6 4 7. "Manufacturer" means a person who manufactures and sells 6 5 tobacco products, alternative nicotine products, or vapor 6 6 products. 6 7 8. "Person" means any individual, firm, association, 6 8 partnership, joint stock company, jointadventureventure, 6 9 corporation, trustee, agency, or receiver, or any legal 6 10 representative of anyof the foregoingindividual, firm, 6 11 association, partnership, joint stock company, joint venture, 6 12 corporation, trustee, agency, or receiver. 6 13 9. "Place of business" means any place where tobacco 6 14 products, alternative nicotine products, or vapor products are 6 15 sold or where tobacco products, alternative nicotine products, 6 16 or vapor products are manufactured, stored, or kept for the 6 17 purpose of sale or consumption, including any vessel, vehicle, 6 18 airplane, train, or vending machine; or for a business within 6 19 or without the state that conducts delivery sales, any place 6 20 where alternative nicotine products or vapor products are sold 6 21 or where alternative nicotine products or vapor products are 6 22 kept for the purpose of sale, including delivery sales. 6 23 10. "Retail outlet" means each place of business from which 6 24 tobacco products, alternative nicotine products, or vapor 6 25 products are sold to consumers. 6 26 11. "Retailer" means any person engaged in the business 6 27 of selling tobacco, tobacco products, alternative nicotine 6 28 products, or vapor products to ultimate consumers. 6 29 12. "Sale" means any transfer, exchange, or barter, in any 6 30 manner or by any means whatsoever, for a consideration, and 6 31 includes and means all sales made by any person. It includes 6 32 a gift by a person engaged in the business of selling tobacco 6 33 products, alternative nicotine products, or vapor products, 6 34 for advertising, as a means of evading the provisions of this 6 35 division, or for any other purposes whatsoever. 7 1 13. "Snuff" means any finely cut, ground, or powdered 7 2 tobacco that is not intended to be smoked. 7 3 14. "Storage" means any keeping or retention of tobacco 7 4 products, alternative nicotine products, or vapor products for 7 5 use or consumption in this state. 7 6 15. "Subjobber" means any person, other than a manufacturer 7 7 or distributor, who buys tobacco products, alternative nicotine 7 8 products, or vapor products from a distributor and sells them 7 9 to persons other than the ultimate consumers. 7 10 16. "Tobacco products" means cigars; little cigars as 7 11 defined herein; cheroots; stogies; periques; granulated, plug 7 12 cut, crimp cut, ready rubbed, and other smoking tobacco; 7 13 snuff; cavendish; plug and twist tobacco; fine=cut and other 7 14 chewing tobaccos; shorts; refuse scraps, clippings, cuttings 7 15 and sweepings of tobacco, and other kinds and forms of tobacco, 7 16 prepared in such manner as to be suitable for chewing or 7 17 smoking in a pipe or otherwise, or both for chewing and 7 18 smoking; but shall not include cigarettes as defined in section 7 19 453A.1, subsection 4. 7 20 17. "Use" means the exercise of any right or power 7 21 incidental to the ownership of tobacco products, alternative 7 22 nicotine products, or vapor products. 7 23 18. "Wholesale sales price" means the established price 7 24 for which a manufacturer sells a tobacco product, alternative 7 25 nicotine products, or vapor products to a distributor, 7 26 exclusive of any discount or other reduction. 7 27 Sec. 12. Section 453A.43, Code 2018, is amended to read as 7 28 follows: 7 29 453A.43 Tax on tobacco products, alternative nicotine 7 30 products, and vapor products. 7 31 1. a. A tax is imposed upon all tobacco products, 7 32 alternative nicotine products, and vapor products in this 7 33 state and upon any person engaged in business as a distributor 7 34 of tobacco products, at the rate oftwenty=twosixty=seven 7 35 percent of the wholesale sales price of the tobacco products, 8 1except little cigars and snuff as defined in section 8 2 453A.42alternative nicotine products, or vapor products. 8 3 Notwithstanding the rate of tax imposed under this paragraph 8 4 "a" on tobacco products, little cigars shall be subject to the 8 5 tax as specified pursuant to paragraph "b", and snuff shall be 8 6 subject to the tax as specified pursuant to paragraph "c". 8 7b. In addition to the tax imposed under paragraph "a", a 8 8 tax is imposed upon all tobacco products in this state and upon 8 9 any person engaged in business as a distributor of tobacco 8 10 products, at the rate of twenty=eight percent of the wholesale 8 11 sales price of the tobacco products, except little cigars and 8 12 snuff as defined in section 453A.42.8 13c. Notwithstanding the rate of tax imposed pursuant to 8 14 paragraphs "a" and "b", if the tobacco product is a cigar, the 8 15 total amount of the tax imposed pursuant to paragraphs "a" and 8 16 "b" combined shall not exceed fifty cents per cigar.8 17d.b. Little cigars shall be subject to the same rate of 8 18 tax imposed upon cigarettes in section 453A.6, payable at the 8 19 time and in the manner provided in section 453A.6; and stamps 8 20 shall be affixed as provided in division I of this chapter. 8 21 c. Snuff shall be subject to the tax as provided in 8 22 subsections 3 and 4. 8 23e.d. The taxes on tobacco products,excluding little 8 24 cigars and snuff,alternative nicotine products, and vapor 8 25 products, as specified pursuant to paragraph "a", shall be 8 26 imposed at the time the distributor does any of the following: 8 27 (1) Brings, or causes to be brought, into this state from 8 28 outside the state tobacco products, alternative nicotine 8 29 products, or vapor products for sale. 8 30 (2) Makes, manufactures, or fabricates tobacco products, 8 31 alternative nicotine products, or vapor products in this state 8 32 for sale in this state. 8 33 (3) Ships or transports tobacco products, alternative 8 34 nicotine products, or vapor products to retailers in this 8 35 state, to be sold by those retailers. 9 1 2. a. A tax is imposed upon the use or storage by consumers 9 2 of tobacco products, alternative nicotine products, and vapor 9 3 products in this state, and upon the consumers, at the rate 9 4 oftwenty=twosixty=seven percent of the cost of the tobacco 9 5 products, alternative nicotine products, or vapor products. 9 6b. In addition to the tax imposed in paragraph "a", a tax 9 7 is imposed upon the use or storage by consumers of tobacco 9 8 products in this state, and upon the consumers, at a rate of 9 9 twenty=eight percent of the cost of the tobacco products.9 10c. Notwithstanding the rate of tax imposed pursuant to 9 11 paragraphs "a" and "b", if the tobacco product is a cigar, the 9 12 total amount of the tax imposed pursuant to paragraphs "a" and 9 13 "b" combined shall not exceed fifty cents per cigar.9 14d.b. The taxes imposed by this subsection shall not apply 9 15 if the taxes imposed by subsection 1 on the tobacco products 9 16 have been paid. 9 17e.c. The taxes imposed under this subsection shall not 9 18 apply to the use or storage of tobacco products in quantities 9 19 of: 9 20 (1) Less than twenty=five cigars. 9 21 (2) Less than one pound smoking or chewing tobacco or other 9 22 tobacco products not specifically mentioned herein, in the 9 23 possession of any one consumer. 9 24 3. A tax is imposed upon all snuff in this state and upon 9 25 any person engaged in business as a distributor of snuff at 9 26 the rate ofone dollar and nineteen cents per ounce, with a 9 27 proportionate tax at the same rate on all fractional parts of 9 28 an ounce of snuffsixty=seven percent of the wholesale sales 9 29 price or an amount equal to the tax on cigarettes pursuant to 9 30 section 453A.6 for each one and two=tenths ounces of snuff, 9 31 whichever is higher. The tax shall be computed based on the 9 32 net weight listed by the manufacturer. The tax on snuff 9 33 shall be imposed at the time the distributor does any of the 9 34 following: 9 35 a. Brings or causes to be brought into this state from 10 1 outside the state, snuff for sale. 10 2 b. Makes, manufactures, or fabricates snuff in this state 10 3 for sale in this state. 10 4 c. Ships or transports snuff to retailers in this state, to 10 5 be sold by those retailers. 10 6 4. a. A tax is imposed upon the use or storage by consumers 10 7 of snuff in this state, and upon the consumers, at the rate of 10 8one dollar and nineteen cents per ounce with a proportionate 10 9 tax at the same rate on all fractional parts of an ounce of 10 10 snuffsixty=seven percent of the wholesale sales price or an 10 11 amount equal to the tax on cigarettes pursuant to section 10 12 453A.6 for each one and two=tenths ounces of snuff, whichever 10 13 is higher. The tax shall be computed based on the net weight 10 14 as listed by the manufacturer. 10 15 b. The tax imposed by this subsection shall not apply if the 10 16 tax imposed by subsection 3 on snuff has been paid. 10 17 c. The tax shall not apply to the use or storage of snuff in 10 18 quantities of less than ten ounces. 10 19 5. Any tobacco product, alternative nicotine products, 10 20 or vapor products with respect to which a tax has once been 10 21 imposed under this division shall not again be subject to tax 10 22 under this division, except as provided in section 453A.40. 10 23 6. The tax imposed by this section shall not apply with 10 24 respect to any tobacco product which under the Constitution 10 25 and laws of the United States may not be made the subject of 10 26 taxation by this state. 10 27 7. The tax imposed by this section shall be in addition to 10 28 all other occupation or privilege taxes or license fees now or 10 29 hereafter imposed by any city or county. 10 30 8. All excise taxes collected under this chapter by a 10 31 distributor or any individual are deemed to be held in trust 10 32 for the state of Iowa. 10 33 Sec. 13. Section 453A.44, subsections 1, 3, and 10, Code 10 34 2018, are amended to read as follows: 10 35 1.NoA person shall not engage in the business of a 11 1 distributor or subjobber of tobacco products, alternative 11 2 nicotine products, or vapor products at any place of business 11 3 without first having received a license from the director to 11 4 engage in that business at that place of business. 11 5 3. A person without this state who ships or transports 11 6 tobacco products, alternative nicotine products, or vapor 11 7 products to retailers in this state, to be sold by those 11 8 retailers, may make application for a license as a distributor, 11 9 be granted a license by the director, and thereafter be subject 11 10 to all the provisions of this division and entitled to act as 11 11 a licensed distributor. 11 12 10. The director may revoke, cancel, or suspend the 11 13 license or licenses of any distributor or subjobber for 11 14 violation of any of the provisions of this division, or 11 15 any other act applicable to the sale of tobacco products, 11 16 alternative nicotine products, or vapor products, or any rule 11 17 or regulations promulgated by the director in furtherance of 11 18 this division. No license shall be revoked, canceled, or 11 19 suspended except after notice and a hearing by the director as 11 20 provided in section 453A.48. 11 21 Sec. 14. Section 453A.45, Code 2018, is amended to read as 11 22 follows: 11 23 453A.45 Licensees, duties. 11 24 1. a. Every distributor shall keep at each licensed 11 25 place of business complete and accurate records for that 11 26 place of business, including itemized invoices, of tobacco 11 27 products, alternative nicotine products, and vapor products 11 28 held, purchased, manufactured, brought in or caused to be 11 29 brought in from without the state, or shipped or transported to 11 30 retailers in this state, and of all sales of tobacco products, 11 31 alternative nicotine products, and vapor products made, except 11 32 sales to the ultimate consumer. 11 33 b. When a licensed distributor sells tobacco products, 11 34 alternative nicotine products, or vapor products exclusively to 11 35 the ultimate consumer at the address given in the license, an 12 1 invoice of those sales is not required, but itemized invoices 12 2 shall be made of all tobacco products, alternative nicotine 12 3 products, and vapor products transferred to other retail 12 4 outlets owned or controlled by that licensed distributor. All 12 5 books, records, and other papers and documents required by 12 6 this subsection to be kept shall be preserved for a period 12 7 of at least three years after the date of the documents or 12 8 the date of the entries appearing in the records, unless the 12 9 director, in writing, authorized their destruction or disposal 12 10 at an earlier date. At any time during usual business hours, 12 11 the director, or the director's duly authorized agents or 12 12 employees, may enter any place of business of a distributor, 12 13 without a search warrant, and inspect the premises, the records 12 14 required to be kept under this subsection, and the tobacco 12 15 products, alternative nicotine products, and vapor products 12 16 containedthereinat the place of business, to determine if all 12 17 the provisions of this division are being fully complied with. 12 18 If the director, or any such agent or employee, is denied 12 19 free access or is hindered or interfered with in making the 12 20 examination, the license of the distributor at that premises is 12 21 subject to revocation by the director. 12 22 2. Every person who sells tobacco products, alternative 12 23 nicotine products, or vapor products to persons other than the 12 24 ultimate consumer shall render with each sale itemized invoices 12 25 showing the seller's name and address, the purchaser's name and 12 26 address, the date of sale, and all prices and discounts. The 12 27 person shall preserve legible copies of all these invoices for 12 28 three years from the date of sale. 12 29 3. Every retailer and subjobber shall procure itemized 12 30 invoices of all tobacco products, alternative nicotine 12 31 products, and vapor products purchased. The invoices shall 12 32 show the name and address of the seller and the date of 12 33 purchase. The retailer and subjobber shall preserve a legible 12 34 copy of each invoice for three years from the date of purchase. 12 35 Invoices shall be available for inspection by the director or 13 1 the director's authorized agents or employees at the retailer's 13 2 or subjobber's place of business. 13 3 4. Records of all deliveries or shipments of tobacco 13 4 products, alternative nicotine products, and vapor products 13 5 from any public warehouse of first destination in this state 13 6 which is subject to the provisions of and licensed under 13 7 chapter 554 shall be kept by the warehouse and be available 13 8 to the director for inspection. They shall show the name and 13 9 address of the consignee, the date, the quantity of tobacco 13 10 products, alternative nicotine products, or vapor products 13 11 delivered, and such other information as the commissioner may 13 12 require. These records shall be preserved for three years 13 13 from the date of delivery of the tobacco products, alternative 13 14 nicotine products, or vapor products. 13 15 5. a. The transportation of tobacco products, alternative 13 16 nicotine products, or vapor products into this state by means 13 17 other than common carrier must be reported to the director 13 18 within thirty days with the following exceptions: 13 19 (1) The transportation of not more than fifty cigars, not 13 20 more than ten ounces of snuff or snuff powder, or not more 13 21 than one pound of smoking or chewing tobacco or other tobacco 13 22 products not specificallymentioned herein;specified under 13 23 this subparagraph. 13 24 (2) Transportation by a person with a place of business 13 25 outside the state, who is licensed as a distributor under 13 26 section 453A.44, or tobacco products, alternative nicotine 13 27 products, or vapor products sold by such person to a retailer 13 28 in this state. 13 29 b. The report shall be made on forms provided by the 13 30 director. The director may require by rule that the report be 13 31 filed by electronic transmission. 13 32 c. Common carriers transporting tobacco products, 13 33 alternative nicotine products, or vapor products into this 13 34 state shall file with the director reports of all such 13 35 shipments other than those which are delivered to public 14 1 warehouses of first destination in this state which are 14 2 licensed under the provisions of chapter 554. Such reports 14 3 shall be filed on or before the tenth day of each month and 14 4 shall show with respect to deliveries made in the preceding 14 5 month; the date, point of origin, point of delivery, name 14 6 of consignee, description and quantity of tobacco products, 14 7 alternative nicotine products, or vapor products delivered, and 14 8 such information as the director may otherwise require. 14 9 d. Any person who fails or refuses to transmit to the 14 10 director the required reports or whoever refuses to permit the 14 11 examination of the records by the director shall be guilty of 14 12 a serious misdemeanor. 14 13 Sec. 15. Section 453A.46, subsection 1, paragraph a, Code 14 14 2018, is amended to read as follows: 14 15 a. On or before the twentieth day of each calendar month 14 16 every distributor with a place of business in this state shall 14 17 file a return with the director showing for the preceding 14 18 calendar month the quantity and wholesale sales price of 14 19 each tobacco product, alternative nicotine product, or vapor 14 20 product brought, or caused to be brought, into this state for 14 21 sale; made, manufactured, or fabricated in this state for sale 14 22 in this state; and any other information the director may 14 23 require. Every licensed distributor outside this state shall 14 24 in like manner file a return with the director showing for 14 25 the preceding calendar month the quantity and wholesale sales 14 26 price of each tobacco product, alternative nicotine product, 14 27 or vapor product shipped or transported to retailers in this 14 28 state to be sold by those retailers and any other information 14 29 the director may require. Returns shall be made upon forms 14 30 furnished or made available in electronic form and prescribed 14 31 by the director and shall contain other information as the 14 32 director may require. Each return shall be accompanied by a 14 33 remittance for the full tax liability shown on the return, less 14 34 a discount as fixed by the director not to exceed five percent 14 35 of the tax. Within three years after the return is filed or 15 1 within three years after the return became due, whichever is 15 2 later, the department shall examine it, determine the correct 15 3 amount of tax, and assess the tax against the taxpayer for any 15 4 deficiency. The period for examination and determination of 15 5 the correct amount of tax is unlimited in the case of a false or 15 6 fraudulent return made with the intent to evade tax, or in the 15 7 case of a failure to file a return. 15 8 Sec. 16. Section 453A.46, subsection 6, Code 2018, is 15 9 amended to read as follows: 15 10 6. On or before the twentieth day of each calendar month, 15 11 every consumer who, during the preceding calendar month, 15 12 has acquired title to or possession of tobacco products, 15 13 alternative nicotine products, or vapor products for use or 15 14 storage in this state, upon which tobacco products, alternative 15 15 nicotine products, or vapor products the tax imposed by 15 16 section 453A.43 has not been paid, shall file a return with the 15 17 director showing the quantity of tobacco products, alternative 15 18 nicotine products, or vapor products so acquired. The return 15 19 shall be made upon a form furnished and prescribed by the 15 20 director, and shall contain other information as the director 15 21 may require. The return shall be accompanied by a remittance 15 22 for the full unpaid tax liability shown by it. Within three 15 23 years after the return is filed or within three years after the 15 24 return became due, whichever is later, the department shall 15 25 examine it, determine the correct amount of tax, and assess the 15 26 tax against the taxpayer for any deficiency. The period for 15 27 examination and determination of the correct amount of tax is 15 28 unlimited in the case of a false or fraudulent return made with 15 29 the intent to evade tax, or in the case of a failure to file a 15 30 return. 15 31 Sec. 17. Section 453A.47, Code 2018, is amended to read as 15 32 follows: 15 33 453A.47 Refunds, credits. 15 34 Where tobacco products, alternative nicotine products, and 15 35 vapor products upon which the tax imposed by this division 16 1 has been reported and paid are shipped or transported by the 16 2 distributor to consumers to be consumed without the state 16 3 or to retailers or subjobbers without the state to be sold 16 4 by those retailers or subjobbers without the state or are 16 5 returned to the manufacturer by the distributor or destroyed 16 6 by the distributor, refund of such tax or credit may be made 16 7 to the distributor in accordance with regulations prescribed 16 8 by the director. Any overpayment of the tax imposed under 16 9 section 453A.43 may be made to the taxpayer in accordance with 16 10 regulations prescribed by the director. The director shall 16 11 cause any such refund of tax to be paid out of the general fund 16 12 of the state, and so much of said fund as may be necessary is 16 13 hereby appropriated for that purpose. 16 14 Sec. 18. Section 453A.47A, subsection 10, paragraph b, Code 16 15 2018, is amended to read as follows: 16 16 b. Every retailer shall, when requested by the department, 16 17 make additional reports as the department deems necessary and 16 18 proper and shall at the request of the department furnish 16 19 full and complete information pertaining to any transaction 16 20 of the retailer involving the purchase or sale or use of 16 21 tobacco, tobacco products, alternative nicotine products, or 16 22 vapor products. The director shall specifically prescribe the 16 23 forms necessary and require each retailer to provide on the 16 24 forms prescribed full and complete information pertaining to 16 25 any tobacco, tobacco products, alternative nicotine products, 16 26 or vapor products offered for sale or sold by the retailer, 16 27 including the type and brand of the product. 16 28 Sec. 19. Section 453A.48, subsection 3, Code 2018, is 16 29 amended to read as follows: 16 30 3. The director may exchange information with the officers 16 31 and agencies of other states administering laws relating to the 16 32 taxation of tobacco products, alternative nicotine products, 16 33 and vapor products. 16 34 Sec. 20. Section 453A.51, Code 2018, is amended to read as 16 35 follows: 17 1 453A.51 Assessment of cost of audit. 17 2 The department may employ auditors or other persons to 17 3 audit and examine the books and records of a permit holder 17 4 or other person dealing in tobacco products, alternative 17 5 nicotine products, and vapor products to ascertain whether 17 6 the permit holder or other person has paid the amount of the 17 7 taxes required to be paid by the permit holder or other person 17 8 under the provisions of this chapter. If the taxes have not 17 9 been paid, as required, the department shall assess against 17 10 the permit holder or other person, as additional penalty, the 17 11 reasonable expenses and costs of the investigation and audit. 17 12 EXPLANATION 17 13 The inclusion of this explanation does not constitute agreement with 17 14 the explanation's substance by the members of the general assembly. 17 15 This bill relates to cigarettes, tobacco products, 17 16 alternative nicotine products, and vapor products under Code 17 17 chapter 453A (cigarette and tobacco taxes and regulation 17 18 of alternative nicotine products and vapor products). The 17 19 bill increases the tax on cigarettes and tobacco products 17 20 and imposes a tax on alternative nicotine products and vapor 17 21 products such that the tax is equivalent on all products to a 17 22 tax of $2.86 on a pack of cigarettes. 17 23 The bill increases the tax imposed on cigarettes from six and 17 24 eight=tenths cents to fourteen and three=tenths cents on each 17 25 cigarette, or from $1.36 to $2.86 per pack of 20 cigarettes. 17 26 The bill increases the tax on cigarettes assembled using 17 27 loose tobacco products that are inserted into a vending machine 17 28 from which assembled cigarettes are dispensed from three and 17 29 six=hundredths cents to four and four=tenths cents, which 17 30 is equivalent, based on the weight of tobacco used for each 17 31 cigarette, to the tax on packaged cigarettes. 17 32 The bill increases the tax on tobacco products from 50 17 33 percent of the wholesale sales price to 67 percent of the 17 34 wholesale sales price, and imposes this same tax on alternative 17 35 nicotine products and vapor products. The bill eliminates the 18 1 cap on the tax for cigars which was 50 cents per cigar. 18 2 The bill makes conforming provisions throughout Code 18 3 chapter 453A to make administration and collection of the 18 4 tax on alternative nicotine products and vapor products the 18 5 same as for tobacco products. The bill provides that of the 18 6 funds consisting of the revenues generated from the tax on 18 7 cigarettes, tobacco products, alternative tobacco products, and 18 8 vapor products, the first $9 million credited to the health 18 9 care trust fund, annually, is to be used for the purposes of 18 10 tobacco use prevention, cessation, and control in accordance 18 11 with the centers for disease control and prevention of the 18 12 United States department of health and human services' most 18 13 recently published best practices for comprehensive tobacco 18 14 control programs, and the remaining revenue credited, annually, 18 15 to the fund shall be used first for mental health services 18 16 followed by other specified purposes of the fund. 18 17 The bill provides that under the director of revenue's 18 18 authorization to require permit holders to make additional 18 19 reports, the director shall specifically prescribe the forms 18 20 necessary and require each retailer to provide on the forms 18 21 prescribed, full and complete information pertaining to any 18 22 cigarettes, alternative nicotine products, or vapor products 18 23 offered for sale or sold by the retailer, including the type 18 24 and brand of the product. LSB 5901YH (4) 87 pf/jh
