Bill Text: OR HB2537 | 2011 | Regular Session | Introduced
Bill Title: Relating to smokeless tobacco products; prescribing an effective date.
Sponsorship: Unknown
Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB2537 Detail]
Download: Oregon-2011-HB2537-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 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 1356
House Bill 2537
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of House Interim Committee on
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.
Creates definition of 'smokeless tobacco products' for purposes
of weight-based tax. Applies to distributions of smokeless
tobacco products occurring on or after July 1, 2010.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to smokeless tobacco products; creating new provisions;
amending ORS 323.500, 323.505 and 323.810; and prescribing an
effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. 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) 'Chewing tobacco' means loose leaf, plug or twist
tobacco, tobacco bites or bits or other whole or coarsely
shredded leaf tobacco that is intended to be placed in the oral
cavity and consumed without being combusted. + }
{ - (2) - } { + (3) + } '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) - } { + (4) + } '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) - } { + (5) + } '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) - } { + (6) + } 'Department' means the Department
of Revenue.
{ - (6) - } { + (7) + } '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
in this state, to be sold, stored, used or consumed by those
retail dealers;
(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) - } { + (8) + } 'Distributor' means:
(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) Any person who makes, manufactures or fabricates tobacco
products in this state for sale in this state;
(c) Any person engaged in the business of selling tobacco
products without this state who ships or transports tobacco
products to retail dealers in this state, to be sold by those
retail dealers;
(d) Any person, including a retail dealer, who sells untaxed
tobacco products in this state; or
(e) A consumer in possession of untaxed tobacco products in
this state.
{ - (8) - } { + (9) + } 'Manufacturer' means a person who
manufactures tobacco products for sale.
{ - (9) - } { + (10) + } 'Moist snuff' means:
(a) { - Any - } { + Snus or any other + } finely cut,
ground or powdered tobacco that is not intended to be smoked or
placed in a nasal cavity; or
(b) { + Pouches, lozenges, tobacco gum, strips, orbs, sticks
or + } any other product containing { + finely cut, ground or
powdered + } tobacco that is intended or expected to be consumed
without being combusted.
{ - (10) - } { + (11) + } '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) - } { + (12) + } 'Retail dealer' 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) - } { + (13) + } '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.
{ + (14) 'Smokeless tobacco products' means snuff, dry snuff,
snuff flour, moist snuff, chewing tobacco, shorts, refuse scraps,
clippings, cuttings and sweepings of tobacco and all other kinds
or forms of tobacco, prepared in such a manner as to be suitable
for consumption, either orally or through the nasal cavity,
without being combusted. + }
{ - (13) - } { + (15) + } 'Taxpayer' includes a distributor
or other person required to pay a tax imposed under ORS 323.500
to 323.645.
{ - (14) - } { + (16) + } 'Tobacco products' means cigars,
cheroots, stogies, periques, granulated, plug cut, crimp cut,
ready rubbed { + , cavendish + } 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 - }
{ + smokeless tobacco products + } 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 - } { + . 'Tobacco products' does + } not
include cigarettes as defined in ORS 323.010.
{ - (15) - } { + (17) + } 'Untaxed tobacco products' means
tobacco products for which the tax required under ORS 323.500 to
323.645 has not been paid.
{ - (16) - } { + (18) + } '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 2. ORS 323.505 is amended to read:
323.505. (1) A tax is hereby imposed upon the distribution of
all tobacco products in this state. The tax imposed by this
section is intended to be a direct tax on the consumer, for which
payment upon distribution is required to achieve convenience and
facility in the collection and administration of the tax. The tax
shall be imposed on a distributor at the time the distributor
distributes tobacco products.
(2) The tax imposed under this section shall be imposed at the
rate of:
(a) Sixty-five percent of the wholesale sales price of cigars,
but not to exceed 50 cents per cigar;
(b) One dollar and seventy-eight cents per ounce based on the
net weight determined by the manufacturer, in the case of
{ - moist snuff - } { + smokeless tobacco products other than
dry snuff + }, except that the minimum tax under this paragraph
is $2.14 per retail container; { - or - }
{ + (c) Sixty-five percent of the wholesale sales price of
dry snuff; or + }
{ - (c) - } { + (d) + } Sixty-five percent of the wholesale
sales price of all tobacco products that are not cigars or
{ - moist snuff - } { + smokeless tobacco products + }.
(3) For reporting periods beginning on or after July 1, 2019,
the rates of tax applicable to { - moist snuff - }
{ + smokeless tobacco products + } under subsection (2)(b) of
this section shall be adjusted for each biennium according to the
cost-of-living adjustment for the calendar year. The Department
of Revenue shall recompute the rates for each biennium by adding
to the rates in subsection (2)(b) of this section the product
obtained by multiplying the rates in subsection (2)(b) of this
section by a factor that is equal to 0.25 multiplied by the
percentage (if any) by which the monthly averaged U.S. City
Average Consumer Price Index for the 12 consecutive months ending
August 31 of the prior calendar year exceeds the monthly averaged
U.S. City Average Consumer Price Index for the 12 consecutive
months ending August 31, 2017.
(4) If the tax imposed under this section does not equal an
amount calculable to a whole cent, the tax shall be equal to the
next higher whole cent. However, the amount remitted to the
Department of Revenue by the taxpayer for each quarter shall be
equal only to 98.5 percent of the total taxes due and payable by
the taxpayer for the quarter.
(5) No tobacco product shall be subject to the tax if the base
product or other intermediate form thereof has previously been
taxed under this section.
SECTION 3. { + The amendments to ORS 323.500 and 323.505 by
sections 1 and 2 of this 2011 Act apply to distributions
occurring on or after July 1, 2010. + }
SECTION 4. ORS 323.810 is amended to read:
323.810. As used in ORS 323.810 to 323.816:
(1) 'Adjusted for inflation' means increased in accordance with
the formula for inflation adjustment set forth in Exhibit F to
the Smokeless Tobacco Master Settlement Agreement.
(2) 'Affiliate' means a person who directly or indirectly owns
or controls, is owned or controlled by or is under common
ownership or control with another person. For purposes of
defining ' affiliate':
(a) 'Owns,' 'is owned' and 'ownership' mean ownership of an
equity interest, or the equivalent thereof, of 10 percent or
more; and
(b) 'Person' means an individual, partnership, committee,
association, corporation or any other organization or group of
persons.
(3) 'Qualified escrow fund' means an escrow arrangement with a
federally or state chartered financial institution having no
affiliation with any tobacco product manufacturer and having
assets of at least $1 billion, where such arrangement requires
that such financial institution hold the escrowed funds'
principal for the benefit of releasing parties and prohibits the
tobacco product manufacturer who is placing the funds into escrow
from using, accessing or directing the use of the escrowed funds'
principal except as consistent with ORS 323.816 (2)(b).
(4) 'Released claims' has the meaning given that term in
section II(gg) of the Smokeless Tobacco Master Settlement
Agreement.
(5) 'Releasing parties' has the meaning given that term in
section II(ii) of the Smokeless Tobacco Master Settlement
Agreement.
(6) 'Smokeless Tobacco Master Settlement Agreement' means the
settlement agreement { + with that title + } (and related
documents) entered into on November 23, 1998, by the State of
Oregon and leading United States tobacco product manufacturers.
(7) 'Smokeless tobacco products' means moist snuff { + or
chewing tobacco + }, as { + those terms are + } defined in ORS
323.500 { - , or chewing tobacco, as defined in section 5702 of
the Internal Revenue Code - } .
(8)(a) 'Tobacco product manufacturer' means an entity that,
after September 28, 2009, directly (and not exclusively through
any affiliate):
(A) Manufactures smokeless tobacco products anywhere that such
manufacturer intends to be sold in the United States, including
smokeless tobacco products intended to be sold in the United
States through an importer (except where such importer is an
Original Participating Manufacturer, as defined in section II(cc)
of the Smokeless Tobacco Master Settlement Agreement), that will
be responsible for the payments under the Smokeless Tobacco
Master Settlement Agreement with respect to such smokeless
tobacco products as a result of the provisions of section VI(b)
of the Smokeless Tobacco Master Settlement Agreement and that
pays the taxes specified in section II(w) of the Smokeless
Tobacco Master Settlement Agreement, and provided that the
manufacturer of such smokeless tobacco products does not market
or advertise such smokeless tobacco products in the United
States);
(B) Is the first purchaser anywhere for resale in the United
States of smokeless tobacco products manufactured anywhere that
the manufacturer does not intend to be sold in the United States;
or
(C) Becomes a successor of an entity described in subparagraph
(A) or (B) of this paragraph.
(b) 'Tobacco product manufacturer' does not include an
affiliate of a tobacco product manufacturer unless such affiliate
is itself a tobacco product manufacturer under paragraph (a) of
this subsection.
(9) 'Units sold' means the number of individual { + unit + }
containers of smokeless tobacco products sold in the State of
Oregon by the applicable tobacco product manufacturer (whether
directly or through a distributor, retailer or similar
intermediary or intermediaries) during the year in question, as
measured by excise taxes collected by the State of Oregon. The
Department of Revenue { - shall - } { + may + } adopt such
rules as are necessary to ascertain the amount of state excise
tax paid on the smokeless tobacco products of such tobacco
product manufacturer for each year. A unit container shall
contain { - 3.2 - } { + 1.2 + } ounces of moist snuff, as
defined in ORS 323.500, or 3.0 ounces of chewing tobacco { + , as
defined in ORS 323.500 + }.
SECTION 5. { + This 2011 Act takes effect on the 91st day
after the date on which the 2011 session of the Seventy-sixth
Legislative Assembly adjourns sine die. + }
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