Revision: Jan. 13, 2020, 3:50 p.m.
HB 1699-FN-A - AS INTRODUCED
2020 SESSION
20-3099
10/01
HOUSE BILL 1699-FN-A
AN ACT relative to a tax on electronic cigarettes.
SPONSORS: Rep. Ames, Ches. 9; Rep. Martin, Hills. 23
COMMITTEE: Ways and Means
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ANALYSIS
This bill increases the tax on electronic cigarettes under the tobacco tax to 40 percent of the wholesale sales price.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
20-3099
10/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty
AN ACT relative to a tax on electronic cigarettes.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Tobacco Tax; Tax Imposed on Electronic Cigarettes. RSA 78:2, II(b) is repealed and reenacted to read as follows:
(b) A tax upon electronic cigarettes sold at retail in this state is imposed at a rate of 40 percent of the wholesale sales price of cartridges or containers of any liquid or other substance containing nicotine that is intended to be used with or in an electronic cigarette device, regardless of whether the liquid or other substance is in a closed cartridge or container that is not intended to be opened, or in a cartridge or container that is intended to be opened. In the case of electronic cigarettes sold as packages containing both a device or devices and any cartridge or container of any liquid or other substance containing nicotine, the 40 percent tax shall be imposed on the wholesale sales price of the package.
2 Effective Date. This act shall take effect October 1, 2020.
20-3099
Revised 1/13/20
HB 1699-FN-A- FISCAL NOTE
AS INTRODUCED
AN ACT relative to a tax on electronic cigarettes.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | $0 | Indeterminable Increase | Indeterminable Increase | Indeterminable Increase |
Expenditures | $0 | $0 | $0 | $0 |
Funding Source: | [ X ] General [ X ] Education [ ] Highway [ ] Other | |||
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METHODOLOGY:
This bill repeals and reenacts RSA 78:2, II (b) relative to the tobacco tax rate for electronic cigarettes. The bill establishes a tax rate of 40% of the wholesale sales price of cartridges or containers of any liquid or other substance containing nicotine that is intended to be used with or in an electronic cigarette device. The bill makes no distinction between open or closed cartridge systems. The 40% tax rate would also be imposed on the wholesale sales price of e-cigarette packages containing both a device or devices and any cartridge or container of any liquid or other substance containing nicotine. This bill takes effect October 1, 2020.
Pursuant to Chapter 346:94, Laws of 2019 the following tax rates for electronic cigarettes went into effect on January 1, 2020:
The Legislature assumed the changes contained in Chapter 346:94, Laws of 2019 relative to taxing electronic cigarettes would generate $5.7 million in revenue in FY 2021.
The Department of Revenue Administration states the changes contained in this bill will increase General Fund and Education Trust Fund revenue by an indeterminable amount in FY 2021 and each year thereafter. Due to the fact that there was no tax on e-cigarette sales until recently (effective January 1, 2020), the Department does not have any actual data on tobacco tax revenue from e-cigarettes.
For comparison purposes, the Department was able to provide that Pennsylvania, a state that imposes a 40% tax on the wholesale sales price of cigarette/vapor products, had revenue of $42.5 million in FY 2019. New Hampshire's population is approximately 11% of Pennsylvania. Pennsylvania's revenue adjusted to New Hampshire's population shows revenue of approximately $4.7 million ($42,500,000 * 11%). However, Pennsylvania, unlike New Hampshire, imposes the tax on the e-cigarette device when sold with or without the liquid or other substance and on any liquid or other substance for use in an e-cigarette regardless of whether the liquid or other substance contains nicotine.
AGENCIES CONTACTED:
Department of Revenue Administration