HB 535-FN-A – AS AMENDED BY THE HOUSE
20Apr2005… 1090h
2005 SESSION
09/01
HOUSE BILL 535-FN-A
AN ACT increasing the tobacco tax.
SPONSORS: Rep. Almy, Graf 11; Rep. Hager, Merr 12; Rep. Pilliod, Belk 5; Sen. Burling, Dist 5
This bill increases the tobacco tax. Under this bill, the current distribution of tobacco tax revenue between the education trust fund and general fund is maintained for annual revenue produced by the tax up to $100,000,000. Annual revenue produced by the tax greater than $100,000,000 shall be deposited in the education trust fund.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20Apr2005… 1090h
05-0895
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT increasing the tobacco tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Tobacco Tax Increased. Amend RSA 78:7 to read as follows:
78:7 Tax Imposed. A tax upon the retail consumer is hereby imposed at the rate of [52 cents] $.80 for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all cigarettes sold at retail in this state. The payment of the tax shall be evidenced by affixing stamps to the smallest packages containing the cigarettes in which such products usually are sold at retail. The word “package” as used in this section shall not include individual cigarettes. No tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States.
2 Distribution of Funds. RSA 78:32 is repealed and reenacted to read as follows:
78:32 Distribution of Funds.
I.(a) For the amount of annual revenue produced by the tax imposed by RSA 78:7 up to the amount of $100,000,000, 71.1 percent shall be deposited in the general fund and 28.9 percent shall be deposited in the education trust fund established by RSA 198:39.
(b) Any annual revenue greater than $100,000,000 raised by such tax shall be deposited in the education trust fund established by RSA 198:39.
II. The commissioner shall make quarterly estimates of the amount of revenues that will be produced and designated for the education trust fund under paragraph I for the next fiscal year and shall certify such amount to the state treasurer for deposit in the education trust fund established by RSA 198:39. Such estimates shall be certified on June 1, September 1, December 1, and March 1 of each year.
3 Applicability. Section 1 of this act shall apply to all persons licensed under RSA 78:2. Such persons shall inventory all taxable tobacco products in their possession and file a report of such inventory with the department of revenue administration on a form prescribed by the commissioner within 20 days after the effective date of this act. The tax rate effective July 1, 2005 shall apply to such inventory and the difference, if any, in the amount paid previously on such inventory and the current effective rate of tax shall be paid with the inventory form. The inventory form shall be treated as a tax return for the purpose of computing penalties under RSA 21-J.
4 Effective Date. This act shall take effect July 1, 2005.
LBAO
05-0895
1/31/05
HB 535-FN-A - FISCAL NOTE
AN ACT increasing the tobacco tax.
FISCAL IMPACT:
The Department of Revenue Administration indicates this bill will increase state unrestricted general fund revenue by $84,136,000 and increase restricted revenue by $3,000,000 in FY 2006 and each year thereafter. There is no fiscal impact on county and local revenue or state, county and local expenditures.
METHODOLOGY:
The Department states this bill increases the tobacco tax rate from $.52 to $1.27, an increase of $.75 per pack. The Department determined the fiscal impact of this bill using their tobacco tax increase model which assumes price elasticity and a diminishing of cross border sales as the tax rate increases. According to the model, a $.75 increase in the tobacco tax will generate an additional $87,136,000 of revenue. The first $3 million of additional revenue will be deposited into the tobacco use prevention fund, and the remainder deposited as unrestricted general fund revenue. The Department further states this tax rate change can be administered within their existing budget.