SB 498-FN-A – AS INTRODUCED
2010 SESSION
09/05
SENATE BILL 498-FN-A
AN ACT relative to taxation of certain tobacco products and requiring a discount to wholesalers on cash purchases of tobacco tax stamps.
SPONSORS: Sen. DeVries, Dist 18; Rep. Eaton, Ches 2
This bill establishes a rate of tax for large cigars and moist snuff.
This bill also requires the commissioner of revenue administration to provide a discount to wholesale tobacco distributors who purchase tobacco tax stamps on a cash basis.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
10-2920
09/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT relative to taxation of certain tobacco products and requiring a discount to wholesalers on cash purchases of tobacco tax stamps.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Tobacco Tax; Definitions; Tobacco Products. Amend RSA 78:1, XIV to read as follows:
XIV. “Tobacco products” means cigarettes, loose tobacco, smokeless tobacco, snuff, and large cigars, but shall not include premium cigars.
2 Tobacco Tax; Definitions; Cigarette. Amend RSA 78:1, XVII(b) to read as follows:
(b) Any roll for smoking containing tobacco wrapped in any substance containing tobacco, however labeled or named, if such roll of tobacco weighs not more than [3] 4 pounds per thousand.
3 Tobacco Tax; Definitions; Premium Cigars. Amend RSA 78:1, XXI to read as follows:
XXI. “Premium cigars” means cigars which are made entirely by hand of all natural tobacco leaf, hand constructed and hand wrapped, wholesaling for $2 or more, and weighing more than [3] 4 pounds per 1000 cigars. These cigars shall be kept in a humidor at the proper humidity.
4 New Paragraphs; Tobacco Tax; Definitions. Amend RSA 78:1 by inserting after paragraph XXI the following new paragraphs:
XXII. “Large cigar” means any roll for smoking, other than a premium cigar, made wholly or in part of tobacco, the wrapper or cover of which is made of natural leaf tobacco or of any substance containing tobacco, weighing more than 4 pounds per 1000 cigars.
XXIII. “Moist snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked, but shall not include any finely cut, ground, or powdered tobacco that is intended to be placed in the nasal cavity.
5 Tobacco Tax Imposed on Tobacco Products Other Than Cigarettes. Amend 78:7-c to read as follows:
78:7-c Tax Imposed on Tobacco Products Other Than Cigarettes. [A tax upon the retail consumer is hereby imposed on tobacco products other than cigarettes at a rate of 48.59 percent of the wholesale sales price.]
I. A tax upon the retail consumer is hereby imposed on moist snuff at the rate of $1.10 per ounce and a proportionate tax at the like rate on all fractional parts of an ounce thereof. Such tax on moist snuff shall be computed based on the net weight as listed by the manufacturer.
II. A tax upon the retail consumer is hereby imposed on large cigars at the rate of 26 cents per each such individual cigar.
III. The tax under this section may be rounded to the nearest cent if the commissioner determines that the amount of tax would not thereby be made materially disproportionate. No such tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States. No such tax shall be imposed on premium cigars.
6 Tobacco Tax Stamps; Discount for Wholesalers on Cash Purchases. Amend RSA 78:9, I to read as follows:
I. The commissioner shall adopt rules pursuant to RSA 541-A relative to the design and denomination of stamps to be secured by the commissioner for affixing to packages of tobacco products as evidence of the payment of the tax imposed by this chapter. The commissioner shall sell such stamps on a cash basis to each licensed wholesaler at a discount of one half of one cent below the amount of the tax established by RSA 78:7 to encourage each wholesaler to affix such stamps and compensate wholesalers for affixing such stamps. The maximum total allowance received in a single calendar year shall not exceed $200,000 for any single licensed wholesaler. The commissioner shall sell such stamps to each licensed wholesaler. The commissioner may permit a licensed wholesaler to pay for such stamps within 30 days after the date of purchase, provided a bond satisfactory to the commissioner in an amount not less than the sale price of such stamps shall have been filed with the commissioner, conditioned upon the payment of such stamps. The commissioner shall keep accurate records of all stamps sold to each wholesaler and shall pay over all receipts from the sale of such stamps to the state treasurer daily.
7 Repeal. RSA 78:1, III-a, relative to the definition of wholesale sales price, is repealed.
8 Effective Date. This act shall take effect July 1, 2010.
LBAO
10-2920
01/04/10
SB 498-FN-A - FISCAL NOTE
AN ACT relative to taxation of certain tobacco products and requiring a discount to wholesalers on cash purchases of tobacco tax stamps.
FISCAL IMPACT:
The Department of Revenue Administration states this bill will decrease state general fund and education trust fund revenue and increase state expenditures by an indeterminable amount in FY 2011 and each fiscal year thereafter. This bill will have no fiscal impact on county and local revenues or expenditures.
METHODOLOGY:
The Department of Revenue Administration states this bill requires the Commissioner of Revenue Administration to provide a discount to wholesale tobacco distributors who purchase tobacco tax stamps on a cash basis, and establishes a tax rate for large cigars and moist snuff.
Tax Stamp fiscal impacts: The Department determined that based on the FY 2010 tobacco tax estimate of $217.2 million, that roughly each $.01 of tax represents $1.2 million of tax revenue. Since the bill states a discount rate of one half of one cent, the discount will reduce revenue by $600,000. The Department further states the entire $600,000 reduction may not be realized since of the 61 licensed wholesalers, some may reach the $200,000 maximum discount limitation.
Tax for large cigars and moist snuff: The Department states the large cigar tax is 26 cents per large cigar and the tax on moist snuff is $1.10 per ounce. While the Department does not have precise numbers, they estimate that 25% of the estimate for cigar sales in prior session cigar legislation could be attained by these changes resulting in new revenue of $288,000 from the big cigar and moist snuff tax changes.
The Department indicates that this law would require additional expenditures to track the combined cash purchases by wholesalers so that the $200,000 discount limitation per licensed wholesaler is enforced. The exact fiscal impact cannot be determined at this time.