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7 LONG TITLE
8 General Description:
9 This bill amends the Cigarette and Tobacco Tax and Licensing chapter to address the
10 taxation of little cigars.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
14 . adjusts the tobacco products tax rate on little cigars; and
15 . makes technical and conforming changes.
16 Money Appropriated in this Bill:
18 Other Special Clauses:
19 This bill takes effect on July 1, 2011.
20 Utah Code Sections Affected:
22 59-14-102, as last amended by Laws of Utah 2010, Chapter 115
23 59-14-302, as last amended by Laws of Utah 2010, Chapters 115, 415 and last amended
24 by Coordination Clause, Laws of Utah 2010, Chapter 407
26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 59-14-102 is amended to read:
28 59-14-102. Definitions.
29 As used in this chapter:
30 (1) "Cigarette" means a roll for smoking made wholly or in part of tobacco:
31 (a) regardless of:
32 (i) the size of the roll;
33 (ii) the shape of the roll; or
34 (iii) whether the tobacco is:
35 (A) flavored;
36 (B) adulterated; or
37 (C) mixed with any other ingredient; and
38 (b) if the wrapper or cover of the roll is made of paper or any other substance or
39 material except tobacco.
40 (2) "Consumer" means a person that is not required:
41 (a) under Section 59-14-201 to obtain a license under Section 59-14-202 ; or
42 (b) under Section 59-14-301 to obtain a license under Section 59-14-202 .
43 (3) "Counterfeit cigarette" means:
44 (a) a cigarette that has a false manufacturing label; or
45 (b) a package of cigarettes bearing a counterfeit tax stamp.
46 (4) "Importer" means a person who imports into the United States, either directly or
47 indirectly, a finished cigarette for sale or distribution.
48 (5) "Indian tribal entity" means a federally recognized Indian tribe, tribal entity, or any
49 other person doing business as a distributor or retailer of cigarettes on tribal lands located in the
51 (6) "Little cigar" means a roll for smoking:
52 (a) made wholly or in part of tobacco;
53 (b) that uses an integrated cellulose acetate filter or other similar filter; and
54 (c) that is wrapped in a substance:
55 (i) containing tobacco; and
56 (ii) that is not exclusively natural leaf tobacco.
58 processes, or labels a finished cigarette.
60 (a) is finely:
61 (i) cut;
62 (ii) ground; or
63 (iii) powdered;
64 (b) has at least 45% moisture content, as determined by the commission by rule made
65 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
66 (c) is not intended to be:
67 (i) smoked; or
68 (ii) placed in the nasal cavity; and
69 (d) except for single-use pouches of loose tobacco, is not packaged, produced, sold, or
70 distributed in single-use units, including:
71 (i) tablets;
72 (ii) lozenges;
73 (iii) strips;
74 (iv) sticks; or
75 (v) packages containing multiple single-use units.
77 (a) sells or distributes a cigarette to a consumer in the state; or
78 (b) intends to sell or distribute a cigarette to a consumer in the state.
80 evidences payment of the tax on cigarettes required by Section 59-14-205 .
82 (b) "Tobacco product" includes:
83 (i) a little cigar; or
84 (ii) moist snuff.
85 (c) "Tobacco product" does not include a cigarette.
87 recognized Indian tribe.
88 Section 2. Section 59-14-302 is amended to read:
89 59-14-302. Tax basis -- Rates.
90 (1) As used in this section:
91 (a) "Manufacturer's sales price" means the amount the manufacturer of a tobacco
92 product charges after subtracting a discount.
93 (b) "Manufacturer's sales price" includes an original Utah destination freight charge,
94 regardless of:
95 (i) whether the tobacco product is shipped f.o.b. origin or f.o.b. destination; or
96 (ii) who pays the original Utah destination freight charge.
97 (2) There is levied a tax upon the sale, use, or storage of tobacco products in the state.
98 (3) The tax levied under Subsection (2) shall be paid by the manufacturer, jobber,
99 distributor, wholesaler, retailer, user, or consumer.
102 the tax under this section is .86 multiplied by the manufacturer's sales price[
104 (5) (a) [
106 (i) at a rate of $1.83 per ounce; and
107 (ii) on the basis of the net weight of the moist snuff as listed by the manufacturer.
108 (b) If the net weight of moist snuff is in a quantity that is a fractional part of one ounce,
109 a proportionate amount of the tax described in Subsection [
110 (i) on that fractional part of one ounce; and
111 (ii) in accordance with rules made by the commission in accordance with Title 63G,
112 Chapter 3, Utah Administrative Rulemaking Act.
113 (6) A little cigar is taxed in the same manner as a cigarette is taxed under Subsection
114 59-14-204 (2).
117 (b) A manufacturer who distributes a tobacco product in, or into, Utah, shall:
118 (i) for a period of three years after the last day on which the manufacturer distributes
119 the tobacco product in, or into, Utah, keep valid scientific evidence of the moisture content of
120 the tobacco product available for review by the commission, upon demand; and
121 (ii) provide a document, to the person described in Subsection (3) to whom the
122 manufacturer distributes the tobacco product, that certifies the moisture content of the tobacco
123 product, as verified by the scientific evidence described in Subsection [
124 (c) A manufacturer who fails to comply with the requirements of Subsection [
125 (7)(b) is liable for the nonpayment or underpayment of taxes on the tobacco product by a
126 person who relies, in good faith, on the document described in Subsection [
127 (d) A person described in Subsection (3) who is required to pay tax on a tobacco
129 (i) shall, for a period of three years after the last day on which the person pays the tax
130 on the tobacco product, keep the document described in Subsection [
131 review by the commission, upon demand; and
132 (ii) is not liable for nonpayment or underpayment of taxes on the tobacco product due
133 to the person's good faith reliance on the document described in Subsection [
134 Section 3. Effective date.
135 This bill takes effect on July 1, 2011.
Legislative Review Note
as of 2-15-11 3:18 PM