Bill Text: IA HF364 | 2019-2020 | 88th General Assembly | Introduced


Bill Title: A bill for an act relating to cigarettes and tobacco products, including increased taxation of such products.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-02-13 - Introduced, referred to Commerce. H.J. 264. [HF364 Detail]

Download: Iowa-2019-HF364-Introduced.html
House File 364 - Introduced HOUSE FILE 364 BY MASCHER A BILL FOR An Act relating to cigarettes and tobacco products, including 1 increased taxation of such products. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2247YH (2) 88 pf/jh
H.F. 364 Section 1. Section 453A.6, subsection 1, Code 2019, is 1 amended to read as follows: 2 1. There is imposed, and shall be collected and paid to the 3 department, a tax on all cigarettes used or otherwise disposed 4 of in this state for any purpose equal to six and eight-tenths 5 fourteen and three-tenths cents on each cigarette. 6 Sec. 2. Section 453A.6, subsection 8, paragraph a, Code 7 2019, is amended to read as follows: 8 a. Pay directly to the department, in lieu of the tax under 9 subsection 1 , a tax equal to three and six hundredths four 10 and four-tenths cents on each cigarette dispensed from such 11 machine. 12 Sec. 3. Section 453A.43, Code 2019, is amended to read as 13 follows: 14 453A.43 Tax on tobacco products. 15 1. a. A tax is imposed upon all tobacco products in 16 this state and upon any person engaged in business as a 17 distributor of tobacco products, at the rate of twenty-two 18 sixty-seven percent of the wholesale sales price of the tobacco 19 products , except little cigars and snuff as defined in section 20 453A.42 . Notwithstanding the rate of the tax imposed under 21 this paragraph “a” on tobacco products, little cigars shall 22 be subject to the tax as specified pursuant to paragraph “b” , 23 and snuff shall be subject to the tax as specified pursuant to 24 paragraph “c” . 25 b. In addition to the tax imposed under paragraph “a” , a 26 tax is imposed upon all tobacco products in this state and upon 27 any person engaged in business as a distributor of tobacco 28 products, at the rate of twenty-eight percent of the wholesale 29 sales price of the tobacco products, except little cigars and 30 snuff as defined in section 453A.42 . 31 c. Notwithstanding the rate of tax imposed pursuant to 32 paragraphs “a” and “b” , if the tobacco product is a cigar, the 33 total amount of the tax imposed pursuant to paragraphs “a” and 34 “b” combined shall not exceed fifty cents per cigar. 35 -1- LSB 2247YH (2) 88 pf/jh 1/ 4
H.F. 364 d. b. Little cigars shall be subject to the same rate of 1 tax imposed upon cigarettes in section 453A.6 , payable at the 2 time and in the manner provided in section 453A.6 ; and stamps 3 shall be affixed as provided in subchapter I of this chapter . 4 c. Snuff shall be subject to the tax as provided in 5 subsections 3 and 4 . 6 e. d. The taxes on tobacco products , excluding little 7 cigars and snuff, shall be imposed at the time the distributor 8 does any of the following: 9 (1) Brings, or causes to be brought, into this state from 10 outside the state tobacco products for sale. 11 (2) Makes, manufactures, or fabricates tobacco products in 12 this state for sale in this state. 13 (3) Ships or transports tobacco products to retailers in 14 this state, to be sold by those retailers. 15 2. a. A tax is imposed upon the use or storage by consumers 16 of tobacco products in this state, and upon the consumers, at 17 the rate of twenty-two sixty-seven percent of the cost of the 18 tobacco products. 19 b. In addition to the tax imposed in paragraph “a” , a tax 20 is imposed upon the use or storage by consumers of tobacco 21 products in this state, and upon the consumers, at a rate of 22 twenty-eight percent of the cost of the tobacco products. 23 c. Notwithstanding the rate of tax imposed pursuant to 24 paragraphs “a” and “b” , if the tobacco product is a cigar, the 25 total amount of the tax imposed pursuant to paragraphs “a” and 26 “b” combined shall not exceed fifty cents per cigar. 27 d. b. The taxes imposed by this subsection shall not apply 28 if the taxes imposed by subsection 1 on the tobacco products 29 have been paid. 30 e. c. The taxes imposed under this subsection shall not 31 apply to the use or storage of tobacco products in quantities 32 of: 33 (1) Less than twenty-five cigars. 34 (2) Less than one pound smoking or chewing tobacco or other 35 -2- LSB 2247YH (2) 88 pf/jh 2/ 4
H.F. 364 tobacco products not specifically mentioned herein in this 1 chapter , in the possession of any one consumer. 2 3. A tax is imposed upon all snuff in this state and upon 3 any person engaged in business as a distributor of snuff at 4 the rate of one dollar and nineteen cents per ounce, with a 5 proportionate tax at the same rate on all fractional parts of 6 an ounce of snuff sixty-seven percent of the wholesale sales 7 price or an amount equal to the tax on cigarettes pursuant to 8 section 453A.6 for each one and two-tenths ounces of snuff, 9 whichever is higher . The tax shall be computed based on the 10 net weight listed by the manufacturer. The tax on snuff 11 shall be imposed at the time the distributor does any of the 12 following: 13 a. Brings or causes to be brought into this state from 14 outside the state, snuff for sale. 15 b. Makes, manufactures, or fabricates snuff in this state 16 for sale in this state. 17 c. Ships or transports snuff to retailers in this state, to 18 be sold by those retailers. 19 4. a. A tax is imposed upon the use or storage by consumers 20 of snuff in this state, and upon the consumers, at the rate of 21 one dollar and nineteen cents per ounce with a proportionate 22 tax at the same rate on all fractional parts of an ounce of 23 snuff sixty-seven percent of the wholesale sales price or an 24 amount equal to the tax on cigarettes pursuant to section 25 453A.6 for each one and two-tenths ounces of snuff, whichever 26 is higher . The tax shall be computed based on the net weight 27 as listed by the manufacturer. 28 b. The tax imposed by this subsection shall not apply if the 29 tax imposed by subsection 3 on snuff has been paid. 30 c. The tax shall not apply to the use or storage of snuff in 31 quantities of less than ten ounces. 32 5. Any tobacco product with respect to which a tax has once 33 been imposed under this subchapter shall not again be subject 34 to tax under this subchapter , except as provided in section 35 -3- LSB 2247YH (2) 88 pf/jh 3/ 4
H.F. 364 453A.40 . 1 6. The tax imposed by this section shall not apply with 2 respect to any tobacco product which under the Constitution 3 and laws of the United States may not be made the subject of 4 taxation by this state. 5 7. The tax imposed by this section shall be in addition to 6 all other occupation or privilege taxes or license fees now or 7 hereafter imposed by any city or county. 8 8. All excise taxes collected under this chapter by a 9 distributor or any individual are deemed to be held in trust 10 for the state of Iowa. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to the taxes on cigarettes and tobacco 15 products. The bill increases the tax on cigarettes and tobacco 16 products that is equivalent on all products to a tax of $2.68 17 on a pack of cigarettes. 18 The bill increases the tax imposed on cigarettes from six and 19 eight-tenths cents to fourteen and three-tenths cents on each 20 cigarette, or from $1.36 to $2.86 per pack of 20 cigarettes. 21 The bill increases the tax on cigarettes assembled using 22 loose tobacco products that are inserted into a vending machine 23 from which assembled cigarettes are dispensed from three and 24 six-hundredths cents to four and four-tenths cents, which 25 is equivalent, based on the weight of tobacco used for each 26 cigarette, to the tax on packaged cigarettes. 27 The bill increases the tax on tobacco products from 50 28 percent of the wholesale sales price to 67 percent of the 29 wholesale sales price. The bill eliminates the cap on the tax 30 for cigars which was 50 cents per cigar. 31 -4- LSB 2247YH (2) 88 pf/jh 4/ 4
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