Unfair Cigarette Sales Law; revise certain definitions under.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Barnett

HOUSE BILL NO. 1688

AN ACT TO AMEND SECTION 75-23-5, MISSISSIPPI CODE OF 1972, TO 1
REVISE THE DEFINITION OF THE TERM "COST TO WHOLESALER" UNDER THE 2
UNFAIR CIGARETTE SALES LAW TO PHASE IN AN INCREASE IN THE PRESUMED 3
COST OF DOING BUSINESS BY THE WHOLESALER; TO REVISE THE DEFINITION 4
OF THE TERM "COST TO THE RETAILER" UNDER THE UNFAIR CIGARETTE 5
SALES LAW TO PHASE IN AN INCREASE IN THE PRESUMED COST OF DOING 6
BUSINESS BY THE RETAILER; AND FOR RELATED PURPOSES. 7
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 8
SECTION 1. Section 75-23-5, Mississippi Code of 1972, is 9
amended as follows: 10
75-23-5. The following words, terms and phrases, when used 11
in the Unfair Cigarette Sales Law, shall have the meaning ascribed 12
to them in this section except where the context clearly indicates 13
a different meaning: 14
(a) "Person" shall mean and include any individual, 15
firm, association, company, partnership, corporation, joint-stock 16
company, club, agency, syndicate, the State of Mississippi, 17
county, municipal corporation or other political subdivision of 18
this state, receiver, trustee, fiduciary, or trade association. 19
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(b) "Commission" or "department" shall mean the 20
Department of Revenue of the State of Mississippi. 21
(c) "Cigarettes" shall mean and include any roll for 22
smoking made wholly or in part of tobacco, irrespective of size or 23
shape and whether or not such tobacco is flavored, adulterated or 24
mixed with any other ingredient, the wrapper or cover of which is 25
made of paper or any other substance or material, excepting 26
tobacco. 27
(d) "Wholesaler" shall mean and include any person 28
qualified as a wholesaler with the Department of Revenue of 29
Mississippi and shall also mean and include any person other than 30
a buying pool as defined herein, wherever resident or located, who 31
brings or causes to be brought into this state unstamped 32
cigarettes purchased directly from the manufacturer thereof and 33
who maintains an established place of business where substantially 34
all of the business is the sale of cigarettes and related 35
merchandise at wholesale to cigarette licensees and where at all 36
times a substantial stock of cigarettes and related merchandise is 37
available for resale; provided, that seventy-five percent (75%) 38
thereof are sold to retailers or other wholesalers not connected 39
with the wholesaler by reason of any business connection or 40
otherwise; and also any person retailing cigarettes to consumers, 41
provided, at least seventy-five percent (75%) of his purchases are 42
made directly from the manufacturers thereof; and also any person 43
in this state other than a buying pool as defined herein, who 44
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purchases cigarettes, from any other person who purchases from a 45
manufacturer at least seventy-five percent (75%) of which are for 46
purposes of resale to retailers in this state not connected with 47
said wholesaler by reason of any business connection or otherwise 48
and who maintains an established place of business where 49
cigarettes and related merchandise are sold at wholesale to 50
persons licensed under this law, and where at all times a 51
substantial stock of cigarettes and related merchandise is 52
available to all retailers for resale; and also any person in this 53
state who acquires cigarettes solely for the purpose of resale in 54
cigarette vending machines; provided, such person operated thirty 55
(30) or more machines. 56
(e) "Retailer" shall mean and include any person who is 57
engaged in this state in the business of selling cigarettes at 58
retail and includes any group of persons, cooperative 59
organizations, buying pools, and any other person or group of 60
retailers purchasing cigarettes on a cooperative basis from 61
licensed distributors or wholesalers. Any person placing a 62
cigarette vending machine at, on or in any premises shall be 63
deemed to be a retailer from each such vending machine. 64
(f) "Buying pool" means and includes any combination, 65
corporation, association, affiliation or group of retail dealers 66
operating jointly in the purchase, sale, exchange, or barter of 67
cigarettes, the profits of which accrue directly or indirectly to 68
such retail dealers. 69
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(g) "Sale" or "sell" shall mean any transfer for a 70
consideration, exchange, barter, gift, offer for sale, advertising 71
for sale, soliciting an order for cigarettes and distribution in 72
any manner or by any means whatsoever. 73
(h) "Sell at wholesale," "sale at wholesale" and 74
"wholesale sales" shall mean and include any sale made in the 75
ordinary course of trade or usual conduct of the wholesaler's 76
business to a retailer for the purpose of resale. 77
(i) "Sell at retail," "sale at retail" or "retail 78
sales" shall mean and include any sale for consumption or use made 79
in the ordinary course of trade or usual conduct of the seller's 80
business. 81
(j) "Basic cost of cigarettes" shall mean whichever of 82
the two (2) following amounts is lower, namely, (i) the invoice 83
cost of cigarettes to the wholesaler or retailer, as the case may 84
be, or (ii) the lowest replacement cost of cigarettes to the 85
wholesaler or retailer, as the case may be, within thirty (30) 86
days prior to the date of sale, in the quantity last purchased 87
(whether within or before the thirty-day period), less, in either 88
of the two (2) cases, all trade discounts except customary 89
discounts for cash, plus the full face value of any stamps or any 90
tax which may be required by any cigarette tax act of this state 91
or political subdivision thereof, now in effect or hereafter 92
enacted, if not already included in the invoice cost of the 93
cigarettes to the wholesaler or retailer, as the case may be. 94
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(k) (i) "Cost to wholesaler" shall mean the basic cost 95
of the cigarettes involved to the wholesaler plus the cost of 96
doing business by the wholesaler as evidenced by the standards and 97
methods of accounting regularly employed by him, and must include, 98
without limitation, labor costs (including salaries of executives 99
and officers), rent, depreciation, selling costs, maintenance of 100
equipment, delivery costs, all types of licenses, taxes, insurance 101
and advertising. 102
(ii) In the absence of proof of a lesser or higher 103
cost of doing business by the wholesale dealer making the sale, 104
the cost of doing business by the wholesale dealer shall be 105
presumed to be two percent (2%) of the basic cost of cigarettes to 106
the wholesale dealer through June 30, 2026; three percent (3%) of 107
the basic cost of cigarettes to the wholesale dealer from and 108
after July 1, 2026, through June 30, 2027; four percent (4%) of 109
the basic cost of cigarettes to the wholesale dealer from and 110
after July 1, 2027, through June 30, 2028; and five percent (5%) 111
of the basic cost of cigarettes to the wholesale dealer from and 112
after July 1, 2028. Any fraction of a cent thus computed shall be 113
rounded off to the next highest cent, plus cartage to the retail 114
outlet, if performed or paid for by the wholesale dealer, which 115
cartage cost, in the absence of proof of a lesser or higher cost, 116
shall be presumed to be one-half of one percent (1/2 of 1%) of the 117
basic cost of the cigarettes to the wholesale dealer, any fraction 118
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of a cent in computing the amount of the cartage shall be rounded 119
off to the next highest cent. 120
(l) (i) "Cost to the retailer" shall mean the basic 121
cost of the cigarettes involved to the retailer plus the cost of 122
doing business by the retailer as evidenced by the standards and 123
methods of accounting regularly employed by him and must include, 124
without limitation, labor (including salaries of executives and 125
officers), rent, depreciation, selling costs, maintenance of 126
equipment, delivery costs, all types of licenses, taxes, insurance 127
and advertising. 128
(ii) In the absence of proof of a lesser or higher 129
cost of doing business by the retailer making the sale, the cost 130
of doing business by the retailer shall be presumed to be six 131
percent (6%) of the basic cost of cigarettes to the retailer 132
through June 30, 2026; eight percent (8%) of the basic cost of 133
cigarettes to the retailer from and after July 1, 2026, through 134
June 30, 2027; ten percent (10%) of the basic cost of cigarettes 135
to the retailer from and after July 1, 2027, through June 30, 136
2028; and twelve percent (12%) of the basic cost of cigarettes to 137
the retailer from and after July 1, 2028. Any fraction of a cent 138
thus computed shall be rounded off to the next highest cent. 139
(iii) In the case of any retail dealer who in 140
connection with the retail dealer's purchase of any cigarettes 141
shall receive not only the discounts ordinarily allowed upon 142
purchases by a retail dealer but also in whole or in part the 143
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ST: Unfair Cigarette Sales Law; revise certain
definitions under.
discounts ordinarily allowed upon purchases by a wholesale dealer, 144
the cost of doing business by the retail dealer with respect to 145
the cigarettes shall be, in the absence of proof of a lesser or 146
higher cost of doing business by the retail dealer, the sum of the 147
cost of doing business by the retail dealer and, to the extent 148
that he shall have received the full discounts ordinarily allowed 149
to a wholesale dealer, the cost of doing business by a wholesale 150
dealer as hereinabove defined in paragraph (j)(ii) of this 151
section. 152
SECTION 2. This act shall take effect and be in force from 153
and after its passage. 154