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This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Wed, Feb 9, 2011 at 1:02 PM by rday. --> 1
7 LONG TITLE
8 General Description:
9 This bill amends penalty provisions of the Cigarette and Tobacco Tax and Licensing
11 Highlighted Provisions:
12 This bill:
12a S. . permits the Tax Commission to waive, reduce, or compromise certain penalties; .S
13 . provides that a person who fails to timely file certain reports relating to the taxation
14 of tobacco, or who provides false or misleading information on, or in relation to, a
16 . is guilty of a class B misdemeanor; and
17 . is subject to revocation or suspension of a license and a civil penalty imposed by
18 the commission; and
19 . makes technical changes.
20 Money Appropriated in this Bill:
22 Other Special Clauses:
24 Utah Code Sections Affected:
26 59-14-214, as last amended by Laws of Utah 2005, Chapter 204
27 59-14-407, as last amended by Laws of Utah 2008, Chapter 382
28 59-14-606, as enacted by Laws of Utah 2005, Chapter 204
28a S. ENACTS:
28b 59-14-103, Utah Code Annotated 1953 .S
30 Be it enacted by the Legislature of the state of Utah:
30a S. Section 1. Section 59-14-103 is enacted to read:
30b 59-14-103. Waiver or reduction of penalty.
30c The commission may, upon making a record of its actions, and upon reasonable cause shown,
30d waive, reduce, or compromise any of the penalties or interest imposed under:
30e (1) Subsection 59-14-212(4)(b)(ii);
30f (2) Subsection 59-14-214(5)(b)(ii);
30g (3) Subsection 59-14-407(5)(b)(ii);
30h (4) Subsection 59-14-606(7)(b)(ii); or
30i (5) Subsection 59-14-608(1)(d). .S
31 Section S. [
32 59-14-214. Nonparticipating manufacturer equity assessment.
33 (1) As used in this section, "nonparticipating manufacturer" means a tobacco product
34 manufacturer, as defined in [
35 manufacturer within the meaning of Subsection II(jj) of the Master Settlement Agreement, as
36 defined in [
37 (2) (a) There is levied an equity assessment, at the rate of 1.75 cents on each cigarette,
38 for all cigarette packages of nonparticipating manufacturers to which a stamp is affixed as
39 required under Section 59-14-205 .
40 (b) The equity assessment imposed by this section is in addition to all other
41 assessments, fees, and taxes levied under existing law.
42 (c) The equity assessment imposed by this section shall be paid by affixing a stamp in
43 the manner and at the time described in Section 59-14-205 .
44 (d) Except as otherwise provided in this section, the equity assessment shall be
45 collected, paid, administered, and enforced in the same manner as the tax on cigarettes levied
46 by Section 59-14-204 .
47 (3) The purposes of this equity assessment are:
48 (a) to recover health care costs to the state imposed by nonparticipating manufacturers;
49 (b) to prevent nonparticipating manufacturers from undermining the state's policy of
50 reducing underage smoking by offering cigarettes for sale substantially below the prices of
51 cigarettes of other manufacturers;
52 (c) to protect funding, which is reduced as a result of the growth of nonparticipating
53 manufacturer cigarette sales, for programs funded in whole or in part by payments to the state
54 under the Master Settlement Agreement, as defined in [
55 (d) to recoup settlement-payment revenue lost to the state as a result of
56 nonparticipating manufacturer cigarette sales; and
57 (e) to fund enforcement and administration of:
58 (i) Chapter 14, Part 6, Tobacco Manufacturer Stamping Enforcement Provisions;
59 (ii) Sections 59-22-201 through 59-22-203 , related to nonparticipating manufacturers;
61 (iii) the equity assessment imposed by this section.
62 (4) [
63 59-14-205 affixes a stamp to a package of cigarettes, shall report monthly to the commission
64 for each place of business, the number and denominations of stamps affixed to individual
65 packages of nonparticipating manufacturer cigarettes sold by the manufacturer, distributor,
66 wholesaler, or retail dealer in the preceding month, including the manufacturer and brand
71 (5) A person required to file a report under this section who fails to timely file the
72 report, or who provides false or misleading information on, or in relation to, the report:
73 (a) is guilty of a class B misdemeanor; and
74 (b) is subject to:
75 (i) revocation or suspension of a license under Part 2, Cigarettes; and
76 (ii) a civil penalty, imposed by the commission, in an amount that does not exceed the
77 greater of:
78 (A) 500% of the retail value of the cigarettes for which an accurate report was not
79 filed; or
80 (B) $5,000.
81 Section 2. Section 59-14-407 is amended to read:
82 59-14-407. Reporting of manufacturer name.
83 (1) As used in this section:
84 (a) "Cigarette" has the same meaning as defined in Section 59-22-202 .
85 (b) "Tobacco product manufacturer" has the same meaning as defined in Section
86 59-22-202 .
87 (2) Any manufacturer, distributor, wholesaler, or retail dealer who under Section
88 59-14-205 affixes a stamp to an individual package or container of cigarettes manufactured or
89 sold by a tobacco product manufacturer required to place funds into escrow under Section
90 59-22-203 shall report quarterly to the commission:
91 (a) the quantity of cigarettes in the package or container; and
92 (b) the name of the manufacturer of the cigarettes.
93 (3) Any manufacturer, distributor, wholesaler, retail dealer, or other person who is
94 required to pay the tax levied under Part 3, Tobacco Products, on a tobacco product defined as
95 a cigarette under Section 59-22-202 and manufactured or sold by a tobacco product
96 manufacturer required to place funds into escrow under Section 59-22-203 shall report
97 quarterly to the commission:
98 (a) the quantity of cigarettes upon which the tax is levied; and
99 (b) the name of the manufacturer of each cigarette.
100 (4) [
101 on or before the last day of the month following each calendar quarterly period pursuant to
102 rules established by the commission in accordance with Title 63G, Chapter 3, Utah
103 Administrative Rulemaking Act.
107 (5) A person required to file a report under this section who fails to timely file the
108 report, or who provides false or misleading information on, or in relation to, the report:
109 (a) is guilty of a class B misdemeanor; and
110 (b) is subject to:
111 (i) revocation or suspension of a license under Part 2, Cigarettes, and Part 3, Tobacco
112 Products; and
113 (ii) a civil penalty, imposed by the commission, in an amount that does not exceed the
114 greater of:
115 (A) 500% of the retail value of the cigarettes and tobacco products for which an
116 accurate report was not filed; or
117 (B) $5,000.
118 Section 3. Section 59-14-606 is amended to read:
119 59-14-606. Reporting by stamping agents.
120 (1) A stamping agent shall submit the following information to the commission not
121 later than 30 calendar days after the end of each calendar quarter, or more frequently if required
122 by the commission by administrative rule in accordance with Section 59-14-607 :
123 (a) a list by brand family of the total number of cigarettes for which the stamping agent
124 affixed stamps during the reporting period;
125 (b) the equivalent stick count for roll your own tobacco, for which the stamping agent
126 paid the tobacco product tax during the reporting period;
127 (c) the equivalent total number of cigarettes or stick count for which the stamping
128 agent paid taxes for the reporting period; and
129 (d) any other information the commission determines is necessary to enforce this part.
130 (2) The stamping agent shall maintain, and make available to the commission, all
131 invoices and documentation of sales of all nonparticipating manufacturer cigarettes and any
132 other information relied upon in reporting to the commission for a period of five years.
133 (3) The commission may share information received under this part with federal, state,
134 or local agencies as necessary for enforcement of this part, the Model Tobacco Settlement Act,
135 or corresponding laws of other states.
136 (4) For purposes of complying with the Model Tobacco Settlement Act, the
137 commission may require, at any time, from the nonparticipating manufacturer and from the
138 financial institution in which the manufacturer has established a qualified escrow fund, proof
140 (a) the amount of money in the fund, exclusive of interest;
141 (b) the amount and date of each deposit to the fund; and
142 (c) the amount and date of each withdrawal from the fund.
143 (5) In addition to the information required to be submitted pursuant to Sections
144 59-14-214 and 59-22-203 and this part, the commission may require by administrative rule
145 adopted pursuant to Section 59-14-607 , a stamping agent or tobacco product manufacturer to
146 submit any additional information including samples of the packaging or labeling of each brand
147 family, as is necessary to enable the commission to determine whether a tobacco product
148 manufacturer is in compliance with this part.
149 (6) No person shall be issued a license or granted a renewal of a license to act as a
150 stamping agent unless the person has certified in writing, under penalty of perjury, that the
151 person will comply fully with this part.
152 (7) A person required to file a report under this section who fails to timely file the
153 report, or who provides false or misleading information on, or in relation to, the report:
154 (a) is guilty of a class B misdemeanor; and
155 (b) is subject to:
156 (i) revocation or suspension of a license under Part 2, Cigarettes; and
157 (ii) a civil penalty, imposed by the commission, in an amount that does not exceed the
158 greater of:
159 (A) 500% of the retail value of the cigarettes for which an accurate report was not
160 filed; or
161 (B) $5,000.
Legislative Review Note
as of 11-18-10 6:58 AM