HB884 (2008) Detail

Increasing the rate of the tobacco tax.


HB 884-FN-A – AS INTRODUCED

2007 SESSION

07-0661

09/01

HOUSE BILL 884-FN-A

AN ACT increasing the rate of the tobacco tax.

SPONSORS: Rep. Almy, Graf 11; Sen. Sgambati, Dist 4; Sen. Burling, Dist 5

COMMITTEE: Ways and Means

ANALYSIS

This bill increases the rate of the tobacco tax.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07-0661

09/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT increasing the rate of the tobacco tax.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Tobacco Tax; Rate 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 [$.80] $1.30 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 Tobacco Tax; Distribution of Funds. Amend RSA 78:32, I to read as follows:

I. The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of [37] 57 cents 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 tobacco products sold at retail in this state imposed by RSA 78:7 and shall certify such amount to the state treasurer by October 1 of each year for deposit in the education trust fund established by RSA 198:39.

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, 2007 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, 2007.

LBAO

07-0661

Revised 02/08/07

HB 884 FISCAL NOTE

AN ACT increasing the rate of the tobacco tax.

FISCAL IMPACT:

      The Department of Revenue Administration states this bill may increase state revenue by $69.5 million in fiscal year 2008 and each year thereafter. There will be no fiscal impact on county and local revenue or state, county and local expenditures.

METHODOLOGY:

    The Department states this bill increases the tax rate for a pack of twenty cigarettes from $.080 to $1.30, an increase of $0.50 per pack. The increase is allocated $0.20 to the general fund and $0.30 to the education trust fund. The Department assumes there would be no additional cost to administer the new tax and this law would take effect July 1, 2007. Estimates for fiscal year 2008 have been projected out to fiscal year 2011 assuming price elasticity and a diminution of cross boarder sales. Based on the Department’s Tobacco Tax Increase Model, which takes these assumptions into consideration, a $0.50 increase in the tobacco tax will result in approximately $69.5 million of additional tax revenue. Of that amount, approximately $22.1 million will go to the general fund and $47.4 million will go to the education trust fund.