Bill Text: OR HB2228 | 2013 | Regular Session | Introduced
Bill Title: Relating to administration of tobacco tax; prescribing an effective date.
Spectrum: Unknown
Status: (Failed) 2013-07-08 - In committee upon adjournment. [HB2228 Detail]
Download: Oregon-2013-HB2228-Introduced.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 532
House Bill 2228
Introduced and printed pursuant to House Rule 12.00. Presession
filed (at the request of Governor John A. Kitzhaber, M.D., for
Department of Revenue)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Provides consistency between statutes administering taxes
imposed on cigarettes and taxes imposed on tobacco products other
than cigarettes. Removes obsolete provisions relating to
cigarette tax jeopardy determinations.
Applies to cigarette tax reporting periods and tobacco products
tax reporting periods beginning on or after January 1, 2014.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to administration of tobacco tax; creating new
provisions; amending ORS 323.010, 323.015, 323.211, 323.215,
323.230, 323.385, 323.500, 323.538, 323.540, 323.560 and
323.605; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 and 3 of this 2013 Act are added to
and made a part of ORS 323.500 to 323.645. + }
SECTION 2. { + Any consumer subject to the tax resulting from
a distribution of tobacco products and from whom the tax has not
been collected shall, on or before the 20th day of the month
following receipt of untaxed tobacco products, file with the
Department of Revenue a report of the quantity of tobacco
products received by the consumer in the preceding calendar
month, in a form and with information prescribed by the
department, submitting with the report the amount of tax due. The
consumer shall pay any tax resulting from a distribution of
tobacco products for personal use or consumption in a quantity of
100 or more cigars or other tobacco products with a wholesale
sales price of $50 or more. + }
SECTION 3. { + Every distributor engaged in business in this
state and selling or accepting orders for tobacco products with
respect to the sale of which the taxes imposed by ORS 323.500 to
323.645 are inapplicable shall, at the time of making the sale or
accepting the order or, if the purchaser is not at that time
obligated to pay the taxes with respect to the distribution of
the tobacco products, at the time the purchaser becomes so
obligated, collect the tax from the purchaser, if the purchaser
is other than a licensed distributor, and shall give to the
purchaser a receipt for the tax paid in the manner and form
prescribed by the Department of Revenue. + }
SECTION 4. ORS 323.010 is amended to read:
323.010. As used in ORS 323.005 to 323.482, unless the context
requires otherwise:
(1) 'Cigarette' means any product that contains nicotine, is
intended to be burned or heated under ordinary conditions of use
and consists of or contains:
(a) Any roll of tobacco wrapped in paper or in any substance
not containing tobacco;
(b) Tobacco, in any form, that is functional in the product and
that, because of its appearance, the type of tobacco used in the
filler or its packaging and labeling, is likely to be offered to,
or purchased by, consumers as a cigarette; or
(c) Any roll of tobacco that is wrapped in any substance
containing tobacco and that, because of its appearance, the type
of tobacco used in the filler or its packaging and labeling, is
likely to be offered to, or purchased by, consumers as a
cigarette described in paragraph (a) of this subsection.
(2) 'Cigarette activity in this state':
(a) Means importing, storing or manufacturing cigarettes in
this state, or exporting cigarettes out of this state, in order
to sell the cigarettes either within or outside this state.
(b) Does not include importing, storing, manufacturing or
exporting of cigarettes that are to be consumed by the person
doing the importing, storing, manufacturing or exporting.
(3) 'Contraband cigarettes' means cigarettes or packages of
cigarettes:
(a) That do not comply with the requirements of ORS 323.005 to
323.482 or 323.856 or the cigarette tax laws of another state or
the federal government;
(b) That bear trademarks that are counterfeit under ORS 647.135
or other state or federal trademark laws; or
(c) That have been sold, offered for sale or possessed for sale
in this state in violation of ORS 180.440.
(4) 'Department' means the Department of Revenue.
{ - (5) 'Dealer' includes every person, other than a
manufacturer or a person holding a distributor's license, who
engages in this state in the sale of cigarettes. - }
{ - (6) - } { + (5) + } 'Exporting' means the act of
carrying or conveying goods from a point of manufacture or
storage in this state to a location outside this state and may be
further defined by the department by rule.
{ - (7) - } { + (6) + } 'Importing' means the act of
bringing goods to a point of storage in this state from a
location outside this state and may be further defined by the
department by rule.
{ - (8) - } { + (7) + } 'In this state' means within the
exterior limits of the State of Oregon and includes all territory
within these limits owned by or ceded to the United States of
America.
{ - (9) - } { + (8) + } 'Manufacturer' means any person who
makes, manufactures or fabricates cigarettes for sale.
{ - (10) - } { + (9) + } 'Package' means the individual
package, box or other container in which retail sales or gifts of
cigarettes are normally made or intended to be made.
{ - (11) - } { + (10) + } 'Person' includes any individual,
firm, copartnership, joint venture, association, social club,
fraternal organization, corporation, estate, trust, receiver,
trustee, syndicate, this state, any county, municipality,
district or other political subdivision of the state, or any
other group or combination acting as a unit.
{ + (11) 'Retailer' includes every person, other than a
manufacturer or a distributor, who engages in this state in the
sale of cigarettes. + }
(12) 'Sale' includes any transfer of title or possession for a
consideration, exchange or barter, in any manner or by any means
whatsoever, but does not include the sale of cigarettes by a
manufacturer to a distributor.
(13) 'Taxpayer' means a distributor or other person required to
pay a tax under ORS 323.005 to 323.482, and includes a
distributor required to prepay a tax under ORS 323.068.
(14) 'Transporter' means any person importing or transporting
into this state, or transporting in this state, cigarettes
obtained from a source located outside this state, or from any
person not licensed as a distributor under ORS 323.005 to
323.482. It does not include a licensed distributor, a common
carrier to whom is issued a certificate or permit by the United
States Surface Transportation Board to carry commodities in
interstate commerce, or to a carrier of federal tax-free
cigarettes in bond, or any person transporting no more than 199
cigarettes at any one time.
(15) 'Untaxed cigarette' means any cigarette that has not yet
been distributed in such manner as to result in a tax liability
under ORS 323.005 to 323.482.
(16) 'Use or consumption' includes the exercise of any right or
power over cigarettes incident to the ownership thereof, other
than the sale of the cigarettes or the keeping or retention
thereof for the purpose of sale.
(17) 'Wholesaler' means any { - dealer - } { + retailer + }
who engages in the sale of cigarettes to any other
{ - dealer - } { + retailer + } for purposes other than use or
consumption.
SECTION 5. ORS 323.015 is amended to read:
323.015. As used in ORS 323.005 to 323.482, unless the context
requires otherwise:
(1) 'Distribution' includes:
(a) The sale in this state of untaxed cigarettes.
(b) The use or consumption in this state of untaxed cigarettes.
(c) The receipt or retention in this state of untaxed
cigarettes at a place of business where cigarettes are
customarily sold or offered for sale to consumers.
(d) The placing of cigarettes in vending machines in this
state.
(e) The use or consumption by the first person in possession in
this state of untaxed cigarettes transported to the state in
quantities of more than 199 in a single shipment.
(f) Donations of sample cigarettes or gift cartons by the
manufacturers of the cigarettes, except sample packages
containing not more than five cigarettes and labeled as 'sample,'
'not for sale' or with similar wording.
(g) The possession in this state of untaxed cigarettes that
were transported to this state in quantities of more than 199,
unless the person in possession of the untaxed cigarettes is in
possession of the untaxed cigarettes in order to transport the
cigarettes to a location outside this state.
(2) { + (a) + } 'Distributor' includes:
{ - (a) - } { + (A) + } Any person who distributes
cigarettes { - . - } { + ; and + }
{ - (b) - } { + (B) + } Any person who sells or accepts
orders for cigarettes that are to be transported from a point
outside this state to a consumer within this state.
{ - (c) - } { + (b) + } Notwithstanding the provisions of
ORS 323.010 { - (5) - } { + (11) + }, any { - dealer - }
{ + retailer + } who serves as the { - dealer's - }
{ + retailer's + } own distributor or who buys directly from a
manufacturer for resale in this state shall be deemed to be both
a distributor and a { - dealer - } { + retailer + } under ORS
323.005 to 323.482.
(3) 'Distributor engaged in business in this state ' includes
any of the following:
(a) Any distributor maintaining, occupying or using,
permanently or temporarily, directly or indirectly, or through a
subsidiary or agent, by whatever name called, an office, place of
distribution, sales or sample room or place, warehouse or storage
place or any other place of business.
(b) A distributor having a representative, agent, salesperson,
canvasser or solicitor operating in this state under the
authority of the distributor or its subsidiary for the purpose of
selling, delivering, or the taking of orders for cigarettes.
SECTION 6. ORS 323.211 is amended to read:
323.211. Every distributor and { - dealer - }
{ + retailer + } or other person engaging in the sale of
cigarettes through the use of one or more vending machines
{ - , - } must affix in a conspicuous place on each machine
{ - , - } a card or decal bearing the name, telephone number,
address { - , - } and place of business of the operator or
owner who regularly places cigarettes in the vending machine. If
a person fails to comply with this section { + , + } the
Department of Revenue may seize the vending machine and its
contents.
SECTION 7. ORS 323.215 is amended to read:
323.215. Every distributor and { - dealer - }
{ + retailer + } or other person engaging in the sale of
cigarettes through the use of one or more vending machines shall
keep a detailed record of each vending machine operated for the
sale of cigarettes, showing the location of the machine and the
date of placing the machine on location.
SECTION 8. ORS 323.230 is amended to read:
323.230. The Department of Revenue or its authorized
representative, upon oral or written demand, may make such
examinations of the books, papers, records and equipment of
persons dealing in, transporting, or storing cigarettes and such
other investigations as it may deem necessary in carrying out the
provisions of ORS 323.005 to 323.482. In addition to any other
reports required under ORS 323.005 to 323.482, the department
may, by rule or otherwise, require additional, other, or
supplemental reports from distributors, { - dealers, - }
{ + retailers, + } transporters, common and private carriers,
warehouse operators, bailees and other persons and prescribe the
form, including verification, of the information to be given and
the times for filing of such additional, other or supplemental
reports.
SECTION 9. ORS 323.385 is amended to read:
323.385. { - (1) - } If the Department of Revenue believes
that the collection of any { - amount of tax required to be
paid by any person - } { + tax imposed + } under ORS 323.005 to
323.482 will be jeopardized by delay, it shall
{ - thereupon - } make a determination of the { - amount
of - } tax { + or the amount of tax required to be
collected + }, noting that fact upon the determination. The
amount determined is immediately due and payable { - , with
interest and penalty as provided in ORS 323.381 - } . { + The
department shall assess the tax, notify the person required to
pay the tax and proceed to collect the tax in the same manner and
using the same procedures as for the collection of income taxes
under ORS 314.440. + }
{ - (2) If the amount of the tax, interest, and penalty
specified in the jeopardy determination is not paid within 20
days after service upon the person of notice of the
determination, the determination becomes final, unless a petition
for redetermination is filed within the 20 days. - }
{ - (3) The person against whom a jeopardy determination is
made may petition for the redetermination thereof pursuant to ORS
323.416. The person shall, however, file the petition for
redetermination with the department within 20 days after the
service upon the person of notice of the determination. The
person shall at the time of filing the petition for
redetermination deposit with the department such security as the
department may deem necessary to ensure compliance with ORS
323.005 to 323.482. The security may be sold by the department
at public sale if it becomes necessary in order to recover any
amount due. Notice of the sale may be served upon the person who
deposited the security personally or by mail in the same manner
as prescribed pursuant to ORS 323.403. Upon any such sale, the
surplus, if any, above the amount due under ORS 323.005 to
323.482 shall be returned to the person who deposited the
security. - }
SECTION 10. ORS 323.500 is amended to read:
323.500. As used in ORS 323.500 to 323.645, unless the context
otherwise requires:
(1) 'Business' means any trade, occupation, activity or
enterprise engaged in for the purpose of selling or distributing
tobacco products in this state.
(2) 'Cigar' means a roll for smoking that is of any size or
shape and that is made wholly or in part of tobacco, irrespective
of whether the tobacco is pure or flavored, adulterated or mixed
with any other ingredient, if the roll has a wrapper made wholly
or in greater part of tobacco and if 1,000 of these rolls
collectively weigh more than three pounds. 'Cigar' does not
include a cigarette, as defined in ORS 323.010.
(3) 'Consumer' means any person who purchases tobacco products
in this state for the person's use or consumption or for any
purpose other than for reselling the tobacco products to another
person.
(4) 'Contraband tobacco products' means tobacco products or
packages containing tobacco products:
(a) That do not comply with the requirements of ORS 323.500 to
323.645;
(b) That do not comply with the requirements of the tobacco
products tax laws of the federal government or of other states;
(c) That bear trademarks that are counterfeit under ORS 647.135
or other state or federal trademark laws; or
(d) That have been sold, offered for sale or possessed for sale
in this state in violation of ORS 180.486.
(5) 'Department' means the Department of Revenue.
(6) 'Distribute' means:
(a) Bringing, or causing to be brought, into this state from
without this state tobacco products for sale, storage, use or
consumption;
(b) Making, manufacturing or fabricating tobacco products in
this state for sale, storage, use or consumption in this state;
(c) Shipping or transporting tobacco products to { - retail
dealers - } { + retailers + } in this state, to be sold,
stored, used or consumed by those { - retail dealers - } { +
retailers + };
(d) Storing untaxed tobacco products in this state that are
intended to be for sale, use or consumption in this state;
(e) Selling untaxed tobacco products in this state; or
(f) As a consumer, being in possession of untaxed tobacco
products in this state.
(7) { + (a) + } 'Distributor' means:
{ - (a) - } { + (A) + } Any person engaged in the business
of selling tobacco products in this state who brings, or causes
to be brought, into this state from without the state any tobacco
products for sale;
{ - (b) - } { + (B) + } Any person who makes, manufactures
or fabricates tobacco products in this state for sale in this
state;
{ - (c) - } { + (C) + } Any person engaged in the business
of selling tobacco products without this state who ships or
transports tobacco products to { - retail dealers - }
{ + retailers + } in this state, to be sold by those
{ - retail dealers - } { + retailers + };
{ - (d) - } { + (D) + } Any person, including a
{ - retail dealer - } { + retailer + }, who sells untaxed
tobacco products in this state; or
{ - (e) - } { + (E) + } A consumer in possession of untaxed
tobacco products in this state.
{ + (b) Notwithstanding the provisions of subsection (11) of
this section, any retailer who serves as the retailer's own
distributor or who buys directly from a manufacturer for resale
in this state shall be deemed to be both a distributor and a
retailer under ORS 323.500 to 323.645. + }
(8) 'Manufacturer' means a person who manufactures tobacco
products for sale.
(9) 'Moist snuff' means:
(a) Any finely cut, ground or powdered tobacco that is not
intended to be smoked or placed in a nasal cavity; or
(b) Any other product containing tobacco that is intended or
expected to be consumed without being combusted.
(10) 'Place of business' means any place where tobacco products
are sold or where tobacco products are manufactured, stored or
kept for the purpose of sale or consumption, including any
vessel, vehicle, airplane, train or vending machine.
(11) { - ' Retail dealer' - } { + 'Retailer' + } means any
person who is engaged in the business of selling or otherwise
dispensing tobacco products to consumers. The term also includes
the operators of or recipients of revenue from all places such as
smoke shops, cigar stores and vending machines, where tobacco
products are made or stored for ultimate sale to consumers.
(12) 'Sale' means any transfer, exchange or barter, in any
manner or by any means, for a consideration, and includes and
means all sales made by any person. It includes a gift by a
person engaged in the business of selling tobacco products, for
advertising, as a means of evading the provisions of ORS 323.500
to 323.645, or for any other purpose.
(13) 'Taxpayer' includes a distributor or other person required
to pay a tax imposed under ORS 323.500 to 323.645.
(14) 'Tobacco products' means cigars, cheroots, stogies,
periques, granulated, plug cut, crimp cut, ready rubbed and other
smoking tobacco, snuff, snuff flour, moist snuff, cavendish, plug
and twist tobacco, fine-cut and other chewing tobaccos, shorts,
refuse scraps, clippings, cuttings and sweepings of tobacco and
other kinds and forms of tobacco, prepared in such manner as to
be suitable for chewing or smoking in a pipe or otherwise, or
both for chewing and smoking, but shall not include cigarettes as
defined in ORS 323.010.
(15) 'Untaxed tobacco products' means tobacco products for
which the tax required under ORS 323.500 to 323.645 has not been
paid.
(16) 'Wholesale sales price' means the price paid for untaxed
tobacco products to or on behalf of a seller by a purchaser of
the untaxed tobacco products.
SECTION 11. ORS 323.538 is amended to read:
323.538. (1) A sales invoice for the wholesale sale of tobacco
products in this state, including a sales invoice required under
ORS 323.540, shall contain the following:
(a) The name and address of the seller, the name and address of
the purchaser, the date of the sale of tobacco products, the
quantity and product description of tobacco products, the price
paid for tobacco products and any discount applied in determining
the price paid for tobacco products;
(b) The applicable license identification number for the
distributor;
(c) A certified statement by the distributor of the tobacco
products that all taxes due under ORS 323.500 to 323.645 have
been or will be paid; and
(d) Any other information the Department of Revenue may
prescribe by rule.
(2) A distributor must provide a copy of the sales invoice to
the purchaser of the tobacco product and the purchaser shall
retain a copy of the invoice for five years following the date of
purchase.
(3) Each purchaser that then sells the tobacco products to a
subsequent purchaser shall provide the subsequent purchaser with
a sales invoice that meets the requirements of this section.
(4)(a) A purchaser in possession of tobacco products who is
unable to present a sales invoice that meets the requirements of
this section is presumed to be in possession of tobacco products
for which the tax imposed under ORS 323.500 to 323.645 has not
been paid.
(b) In the case of a purchaser in possession of untaxed tobacco
products, the tax is due immediately, along with a penalty equal
to 100 percent of the tax due. Amounts due under this paragraph
may be collected as provided in ORS 323.605.
(c) If the purchaser in possession of untaxed tobacco products
is a { - retail dealer - } { + retailer + }, the Department
of Revenue may impose a civil penalty for the possession of
untaxed tobacco products. A civil penalty imposed under this
paragraph may not exceed $1,000 per violation. A penalty imposed
under this paragraph may be appealed to the magistrate division
of the tax court in the time and manner prescribed in ORS 305.404
to 305.560.
(5) This section does not apply to a consumer in possession of
{ - less - } { + fewer + } than 100 cigars or { + other + }
tobacco products with a wholesale sales price of less than $50.
SECTION 12. ORS 323.540 is amended to read:
323.540. (1) Any distributor, and any person dealing in,
transporting or storing tobacco products, shall keep at each
registered place of business complete and accurate records for
that place of business, including itemized invoices, of tobacco
products held, purchased, manufactured, brought in or caused to
be brought in from without the state or shipped or transported to
{ - retail dealers - } { + retailers + } in this state, and
of all sales of tobacco products made, except sales to consumers.
(2) The records required by subsection (1) of this section
shall show the names and addresses of purchasers and other
pertinent papers and documents relating to the purchase, sale or
disposition of tobacco products.
(3) When a licensed distributor sells tobacco products
exclusively to consumers at the address given in the certificate
and sells only tobacco products for which taxes imposed under ORS
323.500 to 323.645 have been paid prior to sale, an invoice of
any individual sale of { - less - } { + fewer + } than 100
cigars or of { + other + } tobacco products with a wholesale
sales price of less than $50 is not required. Itemized invoices
of all tobacco products transferred to other places of business
owned or controlled by that licensed distributor shall be made
and retained.
(4)(a) All books, records and other papers and documents
required by this section to be kept shall be preserved for a
period of at least five years after the initial date of the
books, records and other papers or documents, or the date of
entries appearing therein, unless the Department of Revenue, in
writing, authorizes their destruction or disposal at an earlier
date.
(b) The department or its authorized representative, upon oral
or written demand, may make such examinations of the books,
papers, records and equipment required to be kept under this
section as it may deem necessary in carrying out the provisions
of ORS 323.500 to 323.645.
(c) If the department, or any of its agents or employees, are
denied free access or are hindered or interfered with in making
such examination, the license of the distributor at such premises
shall be subject to cancellation, suspension or revocation by the
department.
SECTION 13. ORS 323.560 is amended to read:
323.560. When tobacco products, upon which the tax imposed
under ORS 323.500 to 323.645 has been reported and paid, are
shipped or transported by the distributor to { - retail
dealers - } { + retailers + } outside this state, to be sold by
those { - retail dealers - } { + retailers + }, or are
returned to the manufacturer by the distributor or destroyed by
the distributor, credit for the paid tax may be made to the
distributor.
SECTION 14. ORS 323.605 is amended to read:
323.605. If the Department of Revenue believes that the
collection of any tax imposed under ORS 323.500 to 323.645 or any
amount of the tax required to be paid to the state or
{ - of - } any determination will be jeopardized by delay, it
shall make a determination of the tax or { + the + } amount of
tax required to be collected, noting that fact upon the
determination. The amount determined is immediately due and
payable and the department shall assess the taxes, notify the
person { + required to pay the tax + } and proceed to collect
the tax in the same manner and using the same procedures as for
the collection of income taxes under ORS 314.440.
SECTION 15. { + (1) Sections 2 and 3 of this 2013 Act apply to
tobacco products tax reporting periods beginning on or after
January 1, 2014.
(2) The amendments to ORS 323.385 by section 9 of this 2013 Act
apply to cigarette tax reporting periods beginning on or after
January 1, 2014. + }
SECTION 16. { + This 2013 Act takes effect on the 91st day
after the date on which the 2013 regular session of the
Seventy-seventh Legislative Assembly adjourns sine die. + }
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