Bill Text: IA SF497 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to cigarettes, tobacco products, and vapor products, including taxation of such products.
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Introduced - Dead) 2019-03-11 - Subcommittee: Feenstra, Bolkcom, and Edler. S.J. 521. [SF497 Detail]
Download: Iowa-2019-SF497-Introduced.html
Senate
File
497
-
Introduced
SENATE
FILE
497
BY
CELSI
,
HOGG
,
PETERSEN
,
BOLKCOM
,
QUIRMBACH
,
and
T.
TAYLOR
A
BILL
FOR
An
Act
relating
to
cigarettes,
tobacco
products,
and
vapor
1
products,
including
taxation
of
such
products.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
Section
331.303,
subsection
3,
Code
2019,
is
1
amended
to
read
as
follows:
2
3.
Act
upon
applications
for
cigarette
tax
,
tobacco
3
product,
alternative
nicotine
product,
and
vapor
product
4
permits
in
accordance
with
chapter
453A
.
5
Sec.
2.
Section
331.653,
subsection
11,
Code
2019,
is
6
amended
to
read
as
follows:
7
11.
Carry
out
duties
relating
to
the
seizure
and
forfeiture
8
of
cigarettes,
tobacco
products,
and
vapor
products,
vehicles,
9
and
other
property
used
in
violation
of
cigarette
,
tobacco
10
product,
or
vapor
product
tax
laws
as
provided
in
section
11
453A.32
.
12
Sec.
3.
Section
331.756,
subsection
20,
Code
2019,
is
13
amended
to
read
as
follows:
14
20.
Assist,
at
the
request
of
the
director
of
revenue,
in
15
the
enforcement
of
cigar
and
cigarette,
tobacco
product,
and
16
vapor
product
tax
laws
as
provided
in
sections
453A.32
and
17
453A.49
.
18
Sec.
4.
Section
453A.6,
subsection
1,
Code
2019,
is
amended
19
to
read
as
follows:
20
1.
There
is
imposed,
and
shall
be
collected
and
paid
to
the
21
department,
a
tax
on
all
cigarettes
used
or
otherwise
disposed
22
of
in
this
state
for
any
purpose
equal
to
six
and
eight-tenths
23
fourteen
and
three-tenths
cents
on
each
cigarette.
24
Sec.
5.
Section
453A.6,
subsection
8,
paragraph
a,
Code
25
2019,
is
amended
to
read
as
follows:
26
a.
Pay
directly
to
the
department,
in
lieu
of
the
tax
under
27
subsection
1
,
a
tax
equal
to
three
and
six
hundredths
four
28
and
four-tenths
cents
on
each
cigarette
dispensed
from
such
29
machine.
30
Sec.
6.
Section
453A.15,
subsection
4,
Code
2019,
is
amended
31
to
read
as
follows:
32
4.
Every
permit
holder
or
other
person
shall,
when
requested
33
by
the
department,
make
additional
reports
as
the
department
34
deems
necessary
and
proper
and
shall
at
the
request
of
the
35
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department
furnish
full
and
complete
information
pertaining
to
1
any
transaction
of
the
permit
holder
or
other
person
involving
2
the
purchase
or
sale
or
use
of
cigarettes
,
alternative
nicotine
3
products,
or
vapor
products,
or
purchase
of
cigarette
stamps.
4
The
director
shall
specifically
prescribe
the
forms
necessary
5
and
require
each
retailer
to
provide
on
the
forms
prescribed,
6
full
and
complete
information
pertaining
to
any
cigarettes,
7
alternative
nicotine
products,
or
vapor
products
offered
for
8
sale
or
sold
by
the
retailer,
including
the
type
and
brand
of
9
the
product.
10
Sec.
7.
Section
453A.24,
subsection
2,
Code
2019,
is
amended
11
to
read
as
follows:
12
2.
The
director
may
require
by
rule
that
common
carriers
13
or
the
appropriate
persons
provide
monthly
reports
to
the
14
department
detailing
all
information
the
department
deems
15
necessary
on
shipments
into
and
out
of
Iowa
of
cigarettes
,
16
and
tobacco
products
,
alternative
nicotine
products,
or
vapor
17
products,
as
set
forth
in
this
subchapter
I
and
subchapter
II
18
of
this
chapter
.
The
director
may
require
by
rule
that
the
19
reports
be
filed
by
electronic
transmission.
20
Sec.
8.
Section
453A.32,
subsection
6,
Code
2019,
is
amended
21
to
read
as
follows:
22
6.
The
provisions
of
this
section
applying
to
cigarettes
23
shall
also
apply
to
tobacco
products
,
alternative
nicotine
24
products,
and
vapor
products
taxed
under
subchapter
II
of
this
25
chapter
.
26
Sec.
9.
Section
453A.33,
Code
2019,
is
amended
to
read
as
27
follows:
28
453A.33
Seizure
not
to
affect
criminal
prosecution.
29
The
seizure,
forfeiture,
and
sale
of
cigarettes,
tobacco
30
products,
alternative
nicotine
products,
vapor
products,
and
31
other
property
under
the
terms
and
conditions
hereinabove
set
32
out
pursuant
to
section
453A.32
,
shall
not
constitute
any
33
defense
to
the
person
owning
or
having
control
or
possession
of
34
the
property
from
criminal
prosecution
for
any
act
or
omission
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made
or
offense
committed
under
this
chapter
or
from
liability
1
to
pay
penalties
provided
by
this
chapter
.
2
Sec.
10.
Section
453A.35,
subsection
1,
paragraph
b,
Code
3
2019,
is
amended
to
read
as
follows:
4
b.
The
revenues
generated
from
the
tax
on
cigarettes
5
pursuant
to
section
453A.6,
subsection
1
,
and
from
the
tax
on
6
tobacco
products
as
specified
in
section
453A.43,
subsections
7
1,
2,
3,
and
4
,
and
from
the
tax
on
vapor
products
as
specified
8
in
section
453A.47D,
shall
be
credited
to
the
health
care
trust
9
fund
created
in
section
453A.35A
.
10
Sec.
11.
Section
453A.35A,
subsection
1,
Code
2019,
is
11
amended
to
read
as
follows:
12
1.
A
health
care
trust
fund
is
created
in
the
office
of
13
the
treasurer
of
state.
The
fund
consists
of
the
revenues
14
generated
from
the
tax
on
cigarettes
pursuant
to
section
15
453A.6,
subsection
1
,
and
from
the
tax
on
tobacco
products
16
as
specified
in
section
453A.43,
subsections
1,
2,
3,
and
4
,
17
and
from
the
tax
on
vapor
products
as
specified
in
section
18
453A.47D,
that
are
credited
to
the
health
care
trust
fund,
19
annually,
pursuant
to
section
453A.35
.
Moneys
in
the
fund
20
shall
be
separate
from
the
general
fund
of
the
state
and
shall
21
not
be
considered
part
of
the
general
fund
of
the
state.
22
However,
the
fund
shall
be
considered
a
special
account
for
23
the
purposes
of
section
8.53
relating
to
generally
accepted
24
accounting
principles.
Moneys
in
the
fund
shall
be
used
only
25
as
specified
in
this
section
and
shall
be
appropriated
only
26
for
the
uses
specified.
Moneys
in
the
fund
are
not
subject
to
27
section
8.33
and
shall
not
be
transferred,
used,
obligated,
28
appropriated,
or
otherwise
encumbered,
except
as
provided
in
29
this
section
.
Notwithstanding
section
12C.7,
subsection
2
,
30
interest
or
earnings
on
moneys
deposited
in
the
fund
shall
be
31
credited
to
the
fund.
32
Sec.
12.
Section
453A.39,
subsection
1,
Code
2019,
is
33
amended
to
read
as
follows:
34
1.
A
manufacturer,
distributor,
wholesaler,
retailer,
or
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distributing
agent,
or
an
agent
thereof
of
a
manufacturer,
1
distributor,
wholesaler,
retailer,
or
distributing
agent
,
shall
2
not
give
away
cigarettes
,
or
tobacco
products
,
alternative
3
nicotine
products,
or
vapor
products,
at
any
time
in
connection
4
with
the
manufacturer’s,
distributor’s,
wholesaler’s,
5
retailer’s,
or
distributing
agent’s
business
or
for
promotion
6
of
the
business
or
product,
except
as
provided
in
subsection
2
.
7
Sec.
13.
Section
453A.42,
subsections
1,
2,
8,
9,
10,
12,
8
14,
and
17,
Code
2019,
are
amended
to
read
as
follows:
9
1.
“Business”
means
any
trade,
occupation,
activity,
10
or
enterprise
engaged
in
for
the
purpose
of
selling
or
11
distributing
tobacco
products
,
alternative
nicotine
products,
12
or
vapor
products
in
this
state.
13
2.
“Consumer”
means
any
person
who
has
title
to
or
14
possession
of
tobacco
products
,
alternative
nicotine
products,
15
or
vapor
products
in
storage,
for
use
or
other
consumption
in
16
this
state.
17
8.
“Person”
means
any
individual,
firm,
association,
18
partnership,
joint
stock
company,
joint
adventure
venture
,
19
corporation,
trustee,
agency,
or
receiver,
or
any
legal
20
representative
of
any
of
the
foregoing
individual,
firm,
21
association,
partnership,
joint
stock
company,
joint
venture,
22
corporation,
trustee,
agency,
or
receiver
.
23
9.
“Place
of
business”
means
any
place
where
tobacco
24
products
are
sold
or
where
tobacco
products
,
alternative
25
nicotine
products,
or
vapor
products
are
manufactured,
stored,
26
or
kept
for
the
purpose
of
sale
or
consumption,
including
any
27
vessel,
vehicle,
airplane,
train,
or
vending
machine;
or
for
28
a
business
within
or
without
the
state
that
conducts
delivery
29
sales,
any
place
where
alternative
nicotine
products
or
vapor
30
products
are
sold
or
where
alternative
nicotine
products
or
31
vapor
products
are
kept
for
the
purpose
of
sale,
including
32
delivery
sales.
33
10.
“Retail
outlet”
means
each
place
of
business
from
which
34
tobacco
products
,
alternative
nicotine
products,
or
vapor
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products
are
sold
to
consumers.
1
12.
“Sale”
means
any
transfer,
exchange,
or
barter,
in
any
2
manner
or
by
any
means
whatsoever,
for
a
consideration,
and
3
includes
and
means
all
sales
made
by
any
person.
It
includes
4
a
gift
by
a
person
engaged
in
the
business
of
selling
tobacco
5
products,
alternative
nicotine
products,
or
vapor
products
6
for
advertising,
as
a
means
of
evading
the
provisions
of
this
7
subchapter
,
or
for
any
other
purposes
whatsoever
.
8
14.
“Storage”
means
any
keeping
or
retention
of
tobacco
9
products
,
alternative
nicotine
products,
or
vapor
products
for
10
use
or
consumption
in
this
state.
11
17.
“Use”
means
the
exercise
of
any
right
or
power
12
incidental
to
the
ownership
of
tobacco
products
,
alternative
13
nicotine
products,
or
vapor
products
.
14
Sec.
14.
Section
453A.43,
Code
2019,
is
amended
to
read
as
15
follows:
16
453A.43
Tax
on
tobacco
products.
17
1.
a.
A
tax
is
imposed
upon
all
tobacco
products
in
this
18
state
and
upon
any
person
engaged
in
business
as
a
distributor
19
of
tobacco
products,
at
the
rate
of
twenty-two
seventy-five
20
percent
of
the
wholesale
sales
price
of
the
tobacco
products
,
21
except
little
cigars
and
snuff
as
defined
in
section
453A.42
.
22
Notwithstanding
the
rate
of
the
tax
imposed
under
this
23
paragraph
“a”
on
tobacco
products,
little
cigars
shall
be
24
subject
to
the
tax
as
specified
pursuant
to
paragraph
“c”
,
and
25
snuff
shall
be
subject
to
the
tax
as
specified
pursuant
to
26
paragraph
“d”
.
27
b.
In
addition
to
the
tax
imposed
under
paragraph
“a”
,
a
28
tax
is
imposed
upon
all
tobacco
products
in
this
state
and
upon
29
any
person
engaged
in
business
as
a
distributor
of
tobacco
30
products,
at
the
rate
of
twenty-eight
percent
of
the
wholesale
31
sales
price
of
the
tobacco
products,
except
little
cigars
and
32
snuff
as
defined
in
section
453A.42
.
33
c.
b.
Notwithstanding
the
rate
of
tax
imposed
pursuant
34
to
paragraphs
paragraph
“a”
and
“b”
,
if
the
tobacco
product
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is
a
cigar,
the
total
amount
of
the
tax
imposed
pursuant
to
1
paragraphs
paragraph
“a”
and
“b”
combined
shall
not
exceed
fifty
2
cents
one
dollar
per
cigar.
3
d.
c.
Little
cigars
shall
be
subject
to
the
same
rate
of
4
tax
imposed
upon
cigarettes
in
section
453A.6
,
payable
at
the
5
time
and
in
the
manner
provided
in
section
453A.6
;
and
stamps
6
shall
be
affixed
as
provided
in
subchapter
I
of
this
chapter
.
7
d.
Snuff
shall
be
subject
to
the
tax
as
provided
in
8
subsections
3
and
4
.
9
e.
The
taxes
on
tobacco
products
,
excluding
little
cigars
10
and
snuff,
shall
be
imposed
at
the
time
the
distributor
does
11
any
of
the
following:
12
(1)
Brings,
or
causes
to
be
brought,
into
this
state
from
13
outside
the
state
tobacco
products
for
sale.
14
(2)
Makes,
manufactures,
or
fabricates
tobacco
products
in
15
this
state
for
sale
in
this
state.
16
(3)
Ships
or
transports
tobacco
products
to
retailers
in
17
this
state,
to
be
sold
by
those
retailers.
18
2.
a.
A
tax
is
imposed
upon
the
use
or
storage
by
consumers
19
of
tobacco
products
in
this
state,
and
upon
the
consumers,
at
20
the
rate
of
twenty-two
seventy-five
percent
of
the
cost
of
the
21
tobacco
products.
22
b.
In
addition
to
the
tax
imposed
in
paragraph
“a”
,
a
tax
23
is
imposed
upon
the
use
or
storage
by
consumers
of
tobacco
24
products
in
this
state,
and
upon
the
consumers,
at
a
rate
of
25
twenty-eight
percent
of
the
cost
of
the
tobacco
products.
26
c.
Notwithstanding
the
rate
of
tax
imposed
pursuant
to
27
paragraphs
“a”
and
“b”
,
if
the
tobacco
product
is
a
cigar,
the
28
total
amount
of
the
tax
imposed
pursuant
to
paragraphs
“a”
and
29
“b”
combined
shall
not
exceed
fifty
cents
per
cigar.
30
d.
b.
The
taxes
imposed
by
this
subsection
shall
not
apply
31
if
the
taxes
imposed
by
subsection
1
on
the
tobacco
products
32
have
been
paid.
33
e.
c.
The
taxes
imposed
under
this
subsection
shall
not
34
apply
to
the
use
or
storage
of
tobacco
products
in
quantities
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of:
1
(1)
Less
than
twenty-five
cigars.
2
(2)
Less
than
one
pound
smoking
or
chewing
tobacco
or
other
3
tobacco
products
not
specifically
mentioned
herein
in
this
4
chapter
,
in
the
possession
of
any
one
consumer.
5
3.
A
tax
is
imposed
upon
all
snuff
in
this
state
and
upon
6
any
person
engaged
in
business
as
a
distributor
of
snuff
at
7
the
rate
of
one
dollar
and
nineteen
cents
per
ounce,
with
a
8
proportionate
tax
at
the
same
rate
on
all
fractional
parts
9
of
an
ounce
of
snuff
seventy-five
percent
of
the
wholesale
10
sales
price
.
The
tax
shall
be
computed
based
on
the
net
weight
11
listed
by
the
manufacturer.
The
tax
on
snuff
shall
be
imposed
12
at
the
time
the
distributor
does
any
of
the
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
seventy-five
percent
of
the
wholesale
sales
price
.
The
24
tax
shall
be
computed
based
on
the
net
weight
as
listed
by
the
25
manufacturer.
26
b.
The
tax
imposed
by
this
subsection
shall
not
apply
if
the
27
tax
imposed
by
subsection
3
on
snuff
has
been
paid.
28
c.
The
tax
shall
not
apply
to
the
use
or
storage
of
snuff
in
29
quantities
of
less
than
ten
ounces.
30
5.
Any
tobacco
product
with
respect
to
which
a
tax
has
once
31
been
imposed
under
this
subchapter
shall
not
again
be
subject
32
to
tax
under
this
subchapter
,
except
as
provided
in
section
33
453A.40
.
34
6.
The
tax
imposed
by
this
section
shall
not
apply
with
35
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respect
to
any
tobacco
product
which
under
the
Constitution
1
and
laws
of
the
United
States
may
not
be
made
the
subject
of
2
taxation
by
this
state.
3
7.
The
tax
imposed
by
this
section
shall
be
in
addition
to
4
all
other
occupation
or
privilege
taxes
or
license
fees
now
or
5
hereafter
imposed
by
any
city
or
county.
6
8.
All
excise
taxes
collected
under
this
chapter
by
a
7
distributor
or
any
individual
are
deemed
to
be
held
in
trust
8
for
the
state
of
Iowa.
9
Sec.
15.
Section
453A.45,
subsection
3,
Code
2019,
is
10
amended
to
read
as
follows:
11
3.
Every
retailer
and
subjobber
shall
procure
itemized
12
invoices
of
all
tobacco
products
,
alternative
nicotine
13
products,
and
vapor
products
purchased.
The
invoices
shall
14
show
the
name
and
address
of
the
seller
and
the
date
of
15
purchase.
The
retailer
and
subjobber
shall
preserve
a
legible
16
copy
of
each
invoice
for
three
years
from
the
date
of
purchase.
17
Invoices
shall
be
available
for
inspection
by
the
director
or
18
the
director’s
authorized
agents
or
employees
at
the
retailer’s
19
or
subjobber’s
place
of
business.
20
Sec.
16.
Section
453A.47A,
subsection
10,
paragraph
b,
Code
21
2019,
is
amended
to
read
as
follows:
22
b.
Every
retailer
shall,
when
requested
by
the
department,
23
make
additional
reports
as
the
department
deems
necessary
and
24
proper
and
shall
at
the
request
of
the
department
furnish
25
full
and
complete
information
pertaining
to
any
transaction
26
of
the
retailer
involving
the
purchase
or
sale
or
use
of
27
tobacco,
tobacco
products,
alternative
nicotine
products,
or
28
vapor
products.
The
director
shall
specifically
prescribe
the
29
forms
necessary
and
require
each
retailer
to
provide
on
the
30
forms
prescribed
full
and
complete
information
pertaining
to
31
any
tobacco,
tobacco
products,
alternative
nicotine
products,
32
or
vapor
products
offered
for
sale
or
sold
by
the
retailer,
33
including
the
type
and
brand
of
the
product.
34
Sec.
17.
NEW
SECTION
.
453A.47D
Tax
on
vapor
products.
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1.
A
tax
is
imposed
upon
all
vapor
products
in
this
state
1
at
the
rate
of
five
dollars
per
cartridge
or
other
container
2
of
a
solution
or
other
substance,
which
may
or
may
not
contain
3
nicotine,
that
is
intended
to
be
used
with
or
in
a
vapor
4
product.
5
2.
The
tax
on
vapor
products
shall
be
imposed
at
the
point
6
of
retail
sale
to
consumers
in
this
state.
The
amount
of
the
7
tax
shall
be
added
to
the
selling
price
of
each
cartridge
or
8
other
container
sold
in
this
state
and
shall
be
collected
from
9
the
purchaser
so
that
the
ultimate
consumer
bears
the
burden
10
of
the
tax.
11
Sec.
18.
Section
453A.48,
subsection
3,
Code
2019,
is
12
amended
to
read
as
follows:
13
3.
The
director
may
exchange
information
with
the
officers
14
and
agencies
of
other
states
administering
laws
relating
to
the
15
taxation
of
tobacco
products
and
vapor
products
.
16
Sec.
19.
Section
453A.51,
Code
2019,
is
amended
to
read
as
17
follows:
18
453A.51
Assessment
of
cost
of
audit.
19
The
department
may
employ
auditors
or
other
persons
to
20
audit
and
examine
the
books
and
records
of
a
permit
holder
or
21
other
person
dealing
in
tobacco
products
or
vapor
products
22
to
ascertain
whether
the
permit
holder
or
other
person
has
23
paid
the
amount
of
the
taxes
required
to
be
paid
by
the
permit
24
holder
or
other
person
under
the
provisions
of
this
chapter
.
25
If
the
taxes
have
not
been
paid,
as
required,
the
department
26
shall
assess
against
the
permit
holder
or
other
person,
as
27
additional
penalty,
the
reasonable
expenses
and
costs
of
the
28
investigation
and
audit.
29
EXPLANATION
30
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
31
the
explanation’s
substance
by
the
members
of
the
general
assembly.
32
This
bill
relates
to
the
taxes
on
cigarettes,
tobacco
33
products,
and
vapor
products.
34
The
bill
increases
the
tax
imposed
on
cigarettes
from
six
and
35
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eight-tenths
cents
to
fourteen
and
three-tenths
cents
on
each
1
cigarette,
or
from
$1.36
to
$2.86
per
pack
of
20
cigarettes.
2
The
bill
increases
the
tax
on
cigarettes
assembled
using
3
loose
tobacco
products
that
are
inserted
into
a
vending
machine
4
from
which
assembled
cigarettes
are
dispensed
from
three
and
5
six-hundredths
cents
to
four
and
four-tenths
cents,
which
6
is
equivalent,
based
on
the
weight
of
tobacco
used
for
each
7
cigarette,
to
the
tax
on
packaged
cigarettes.
8
The
bill
increases
the
tax
on
tobacco
products
from
50
9
percent
of
the
wholesale
sales
price
to
75
percent
of
the
10
wholesale
sales
price.
The
bill
amends
the
cap
on
the
tax
for
11
cigars
from
50
cents
per
cigar
to
$1
per
cigar.
12
The
bill
imposes
a
tax
on
vapor
products
in
the
state
at
13
the
rate
of
$5
per
cartridge
or
other
container
of
a
solution
14
or
substance,
which
may
or
may
not
contain
nicotine,
that
is
15
intended
to
be
used
with
or
in
a
vapor
product.
16
The
tax
is
imposed
at
the
point
of
retail
sale
to
cartridges
17
or
other
containers
in
the
state
so
that
the
ultimate
consumer
18
bears
the
burden
of
the
tax.
19
The
bill
make
other
conforming
changes.
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