HB 638-FN-A - AS INTRODUCED
2009 SESSION
09/01
HOUSE BILL 638-FN-A
AN ACT increasing the tobacco tax and dedicating certain tobacco tax revenues to the comprehensive cancer plan fund.
SPONSORS: Rep. Butynski, Ches 4; Rep. Hatch, Coos 3; Rep. Bridgham, Carr 2; Rep. Pilliod, Belk 5; Rep. Emerton, Hills 7
This bill increases the tobacco tax and dedicates certain tobacco tax revenues to the comprehensive cancer plan 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
09-0611
09/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nine
AN ACT increasing the tobacco tax and dedicating certain tobacco tax revenues to the comprehensive cancer plan fund.
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 [$1.33] $2.33 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. Amend RSA 78:32 to read as follows:
78:32 Distribution of Funds.
I. The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 37 cents and up to and including 42 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] comprehensive cancer plan fund established pursuant to RSA 126-A:64.
II.(a) The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 42 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.
[II.](b) The commissioner shall make quarterly estimates of the amount of additional revenues that will be produced by such increase in tax rate 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 Comprehensive Cancer Plan Fund. Amend the introductory paragraph of RSA 126-A:64 to read as follows:
126-A:64 Comprehensive Cancer Plan Fund. There is hereby established in the office of the state treasurer the comprehensive cancer plan fund, to be administered by the department of health and human services. A portion of tobacco tax revenues shall be deposited annually in the fund, pursuant to RSA 78:32, I. The department is authorized to accept public sector and private sector grants, gifts, donations, and appropriations for deposit into the fund. The fund shall be nonlapsing and continually appropriated to the department, and shall be used to implement the provisions of the New Hampshire comprehensive cancer plan as developed by the New Hampshire comprehensive cancer collaboration. The fund shall be expended annually for the following purposes, with allocations determined by the comprehensive cancer plan oversight board:
4 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, 2009 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.
5 Effective Date. This act shall take effect July 1, 2009.
LBAO
09-0611
Revised 03/02/09
HB 638 FISCAL NOTE
AN ACT increasing the tobacco tax and dedicating certain tobacco tax revenues to the comprehensive cancer plan fund.
FISCAL IMPACT:
The Department of Revenue Administration states this bill will decrease state general fund revenue by $27,324,977 in FY 2010 and each year thereafter. This bill will increase restricted education trust fund revenue by $6,331,289 in FY 2010 and decrease restricted education trust fund revenue by $5,668,711 in FY 2011 and each year thereafter. This bill increases restricted cancer fund revenue by $3,162,018 in FY 2010 and each year thereafter. This bill has no fiscal impact on county and local revenue and state, county, and local expenditures.
METHODOLOGY:
The Department of Revenue Administration states this bill increases the tobacco tax rate from $1.33 per package to $2.33 per package. Tax revenue produced up to 37 cents per package will be deposited in the general fund, tax revenue produced in excess of 37 cents and up to and including 42 cents per package will be deposited in the comprehensive cancer plan fund, and tax revenue in excess of 42 cents for each package will be deposited in the education trust fund.
The Department states the current tobacco tax rate of $1.33 results in tax revenue of approximately $187,932,579 annually. According to the NHDRA Tobacco Tax Increase Model, an increase in the rate from $1.33 to $2.33 per pack will result in tax revenues of approximately $158,100,909 annually, resulting in a net loss of $29,831,670 annually ($187,932,579 - $158,100,909). The schedule below represents the annual anticipated revenue resulting from this bill with the applicable distributions based on percentages of the $2.33 per package tobacco tax:
|
Current |
Proposed |
Effect | ||
General Fund |
28% |
$52,621,122 |
16% |
$25,296,145 |
($27,324,977) |
Education Trust Fund |
72% |
$135,311,457 |
82% |
$129,642,746 |
($5,668,711) |
Cancer Fund |
0% |
$0 |
2% |
$3,162,018 |
$3,162,018 |
Total |
100% |
$187,932,579 |
100% |
$158,100,909 |
($29,831,670) |
The Department states the tobacco tax rate increase results in a decrease in tobacco sales due to price elasticity and the loss of cross border sales. Also, there are 12,000,000 packages of cigarette inventory currently in the market place in which the $1 increase will apply to, generating $12,000,000 in additional tax revenue deposited in the education trust fund in FY 2010. The following schedule represents the impact on revenue from the proposed tobacco tax in FY 2010 through FY 2013:
|
FY 2010 |
FY 2011 |
FY 2012 |
FY 2013 |
General Fund (16%) |
$25,296,145 |
$25,296,145 |
$25,296,145 |
$25,296,145 |
Education Trust Fund (82%) |
$129,642,746 |
$129,642,746 |
$129,642,746 |
$129,642,746 |
Current Inventory |
$12,000,000 |
|
|
|
Cancer Fund (2%) |
$3,162,018 |
$3,162,018 |
$3,162,018 |
$3,162,018 |
Proposed Revenues |
$170,100,909 |
$158,100,909 |
$158,100,909 |
$158,100,909 |
Less: Current Revenues |
$187,932,579 |
$187,932,579 |
$187,932,579 |
$187,932,579 |
Revenue Decrease |
($17,831,670) |
($29,831,670) |
($29,831,670) |
($29,831,670) |
The Department states this bill will decrease state general fund revenue by $27,324,977 in FY 2010 and each year thereafter. This bill will increase restricted education trust fund revenue by $6,331,289 in FY 2010 and decrease restricted education trust fund revenue by $5,668,711 in FY 2011 and each year thereafter. This bill will increase restricted cancer fund revenue by $3,162,018 in FY 2010 and each year thereafter.