Tobacco taxes-amendments.

20LSO-0522
2020
STATE OF WYOMING
20LSO-0522
Numbered
2.0

HOUSE BILL NO. HB0205

Tobacco taxes-amendments.

Sponsored by: Representative(s) Burlingame and Senator(s) Rothfuss and Scott

A BILL

for

AN ACT relating to taxation and revenue; increasing the tax rate on cigarettes and other tobacco products; increasing the items that constitute tobacco products subject to regulation; increasing the licensing fee; extending the tobacco taxes to sales from out of state; providing and amending definitions; clarifying that regulations apply to retailers; amending distribution of the tobacco taxes; conforming provisions; providing for reporting and taxation of floor stock; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.

W.S. 39-15-501(a)(intro), 39
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18
‑
101(a)(v)(A), (B) and by creating new paragraphs (ix) through (xi), 39
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18
‑
102, 39
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18
‑
103(a)(iii), (iv) and (c)(ii) through (iv), 39
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18
‑
104, 39
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18
‑
106(a), (c)(intro), (ii), (iii) and by creating a new paragraph (iv), 39
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18
‑
107(a)(i), (ii), (b)(ii), (c)(i)(intro) and (D), 39
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18
‑
108(c)(ii)(A), (v) through (viii), (ix)(intro) and (x) and 39
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18
‑
111(a), (b) and by creating a new subsection (d) are amended to read:

39-15-501.

Sales from remote sellers.

(a)

Notwithstanding any other provision of law, any seller of tangible personal property, admissions or services which are subject to taxation under chapter 15
,

or
16
or 18
of this title who does not have a physical presence in this state shall remit sales tax and follow all applicable procedures and requirements of this chapter as if the seller had a physical presence in this state once the seller meets either of the following requirements for the current calendar year or the immediately preceding calendar year:

39
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18
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101.

Definitions.

(a)

As used in this article:

(v)

"Wholesaler" means any person who:

(A)

Whether located within or without Wyoming, imports, sells or distributes cigarettes
, cigars, snuff
or other tobacco products into this state for sale or resale
to a retailer
;

(B)

Purchases cigarettes
, cigars, snuff
or other tobacco products in this state for sale or resale;

(ix)

"Electronic smoking device" means any device that may be used to deliver any aerosolized or vaporized substance to the person inhaling from the device, including an e
‑
cigarette, e
‑
cigar, e
‑
pipe, vape pen or e
‑
hookah. "Electronic smoking device" includes any component, part or accessory of the device, whether or not sold separately, and includes any substance intended to be
aerosolized or vaporized during the use of the device, whether or not the substance contains nicotine. "Electronic smoking device" does not include:

(A)

Any battery or battery charger when sold separately;

(B)

Drugs, devices or combination products authorized for sale by the United States food and drug administration as those terms are defined in the Federal Food, Drug and Cosmetic Act.

(x)

"Other tobacco product":

(A)

Means any product, other than cigarettes, containing, made of or derived from tobacco or that contains nicotine and that is intended for human consumption or is likely to be consumed, whether smoked, heated, chewed, absorbed, dissolved, inhaled or ingested by any other means, including a cigar, pipe tobacco, chewing tobacco, dry snuff or snus;

(B)

Means any electronic smoking device and any component, part or accessory of this subparagraph or subparagraph (A) of this paragraph, whether or not any of these contains tobacco or nicotine, including filters, rolling papers, blunt or hemp wraps and pipes;

(C)

Does not include drugs, devices or combination products authorized for sale by the United States food and drug administration as those terms are defined in the Federal Food, Drug and Cosmetic Act.

(xi)

"Retailer" means any person within Wyoming or any person outside of Wyoming to the extent provided by W.S. 39
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15
‑
501 who:

(A)

Sells or offers for sale cigarettes or other tobacco products to consumers in this state; or

(B)

Sells or distributes for sale cigarettes or other tobacco products over the internet or through any other means of direct or indirect mail solicitation or delivery to any consumer in this state.

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102.

Administration; confidentiality.

(a)

The payment of the taxes required by this article shall be evidenced by the affixing of stamps, imprints or impressions on each package of cigarettes sold or distributed by a licensed wholesaler. The department shall obtain suitable stamps and sell them to licensed wholesalers for cash at a
six percent (6%)
two percent (2%)
discount. The department may deposit cigarette tax stamps in banks within Wyoming for disbursement to licensed wholesalers pursuant to rules and regulations of the department. The department shall keep accurate records of all stamps sold. The department may authorize licensed wholesalers to use department approved metering machines to affix imprints or impressions in lieu of affixing stamps. The machine shall be sealed by the department and used pursuant to rules and regulations of the department. The department shall inspect and read each metering machine at least once a month or may approve and appoint a bank within Wyoming of the wholesaler's choice to act as setting agent pursuant to rules and regulations of the department. Meter
settings shall be sold to licensed wholesalers for cash at a
six percent (6%)
two percent (2%)
discount. Wholesalers purchasing stamps, imprints or impressions with other than cash shall furnish the department a bond of not less than ten thousand dollars ($10,000.00) or such other amount as specified by the department.

(b)

The tax imposed by W.S. 39
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18
‑
103(a)(iii) shall be paid by the wholesaler. The wholesaler shall be entitled to retain
four percent (4%)
one percent (1%)
of any tax collected under W.S. 39
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‑
103(a)(iii).

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103.

Imposition.

(a)

Taxable event. The following event shall constitute a taxable event under this article:

(iii)

In addition to the other taxes imposed by this subsection, there is levied and assessed upon
cigars, snuff and
other tobacco products purchased or imported into this state by wholesalers for resale, except cigarettes
taxed under this subsection, an excise tax at the rate imposed by W.S. 39
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18
‑
104(c) or (e), as applicable;

(iv)

The tax imposed by paragraph (iii) of this subsection shall also be imposed upon the
sale,
use or storage by
consumers
retailers
of
cigars, snuff and
other tobacco products in this state
, and upon those consumers,
at the rate imposed by W.S. 39
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18
‑
104(d) or (f), as applicable. This tax shall not apply if the tax imposed by paragraph (iii) of this subsection has been paid.

(c)

Taxpayer. The following taxpayers are liable for the tax imposed by this article:

(ii)

There is levied and shall be paid to the department an excise tax at the rate imposed by W.S. 39
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18
‑
104(b) upon the
sale,
use or storage by
consumers
retailers
of cigarettes in Wyoming but only if the tax imposed by paragraph (i) of this subsection has not been paid;

(iii)

In addition to the other taxes imposed by this subsection, there is levied and assessed upon
cigars, snuff and
other tobacco products purchased or imported into this state by wholesalers for resale, except cigarettes taxed under this subsection, an excise tax at the rate imposed by W.S. 39
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18
‑
104(c) or (e), as applicable;

(iv)

The tax imposed by paragraph (iii) of this subsection shall also be imposed upon the
sale,
use or storage by
consumers
retailers
of
cigars, snuff and
other tobacco products in this state
, and upon those consumers,
at the rate imposed by W.S. 39
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18
‑
104(d) or (f), as applicable. This tax shall not apply if the tax imposed by paragraph (iii) of this subsection has been paid.

39
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104.

Taxation rate.

(a)

There is levied and shall be collected and paid to the department an excise tax at the rate of
three cents ($.03)
ten cents ($.10)
upon the sale of each cigarette sold by wholesalers.

(b)

There is levied and shall be paid to the department an excise tax at the rate of
three cents ($.03)
ten cents ($.10)
upon the
sale,
use or storage by
consumers
retailers
of cigarettes in Wyoming but only if the tax imposed by subsection (a) of this section has not been paid.

(c)

In addition to the other taxes imposed by this section, there is levied and assessed upon
cigars, snuff and
other tobacco products purchased or imported into this state by wholesalers for resale, except
cigarettes and
moist snuff taxed under this section, an excise tax at the rate of
twenty percent (20%)
fifty
‑
six percent (56%)
of the wholesale purchase price at which the
other
tobacco products are purchased by wholesalers from manufacturers.

(d)

The tax imposed by subsection (c) of this section shall also be imposed upon the
sale,
use or storage by
consumers
retailers
of
cigars, snuff and
other tobacco products
other than cigarettes and
except
moist snuff in this state, and upon those
consumers
retailers
, at the rate of
ten percent (10%)
twenty-eight percent (28%)
of the
retail price of the
cigar, snuff or
other tobacco product
.

other than cigarettes and moist snuff.
This tax shall not apply if the tax imposed by subsection (c) of this section has been paid.

(e)

In addition to the other taxes imposed by this section, there is levied and assessed upon moist snuff purchased or imported into this state by wholesalers for resale, an excise tax at the rate of
sixty cents ($0.60)
two dollars and sixty cents ($2.60)
for any amount of moist snuff up to
one (1) ounce
one and two
‑
tenths (1.2) ounces
plus a proportionate tax at the like rate on any fractional parts of more than
one (1) ounce
one and two
‑
tenths (1.2) ounces
. The tax on moist snuff shall be imposed based on the net weight as listed by the manufacturer.

(f)

The tax imposed by subsection (e) of this section shall also be imposed upon the
sale,
use or storage by
consumers
retailers
of moist snuff in this state
, and upon those consumers,
at the rate of
sixty cents ($0.60)
two dollars and sixty cents ($2.60)
for any amount of moist snuff up to
one (1) ounce
one and two
‑
tenths (1.2) ounces

plus a proportionate tax at the like rate on any fractional parts of more than
one (1) ounce
one and two
‑
tenths (1.2) ounces
. This tax shall not apply if the tax imposed by subsection (e) of this section has been paid. The tax on moist snuff shall be imposed based on the net weight as listed by the manufacturer.

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106.

Licensing; permits.

(a)

Every wholesaler,
retailer,
cigarette importer and cigarette manufacturer who sells or offers to sell cigarettes
, cigars, snuff
or other tobacco products in this state must have a license to do so issued by the department. No license or renewal of a license shall be granted under this section unless the wholesaler
or retailer
states in writing, under penalty for false swearing, that he shall comply fully with W.S. 9
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4
‑
1201 through 9
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4
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1209. The license fee is
ten dollars ($10.00)
one hundred dollars ($100.00)
per year or fraction thereof and is valid through June 30 in each year. The license will be granted only to wholesalers
or retailers
who own or operate the place from which sales are made and additional
licenses must be obtained for each separate location. The licenses are transferable pursuant to rules and regulations promulgated by the department. License fees paid under this subsection shall be deposited in the state general fund.

(c)

No license for a cigarette wholesaler,
retailer,
cigarette importer or cigarette manufacturer shall be granted, maintained or renewed if the applicant:

(ii)

Has imported or caused to be imported into the United States any tobacco products in violation of 19 U.S.C. 1681a;
or

(iii)

Has imported or caused to be imported into the United States, or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the federal Cigarette Labeling and Advertising Act, (15 U.S.C. 1331, et seq.)
;
.

or

(iv)

Is not in compliance with all applicable federal and state laws concerning the distribution, resale,
sale, use, storage and reporting of information regarding cigarettes and other tobacco products.

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107.

Compliance; collection procedures.

(a)

Returns and reports. The following shall apply:

(i)

Each wholesaler
and retailer
shall keep complete and accurate records of all cigarettes
, cigars, snuff or

and
other tobacco products purchased and sold for three (3) years. The records shall be in the form prescribed by the department and will be available for inspection by the department at any reasonable time. The department may investigate and examine the stock of cigarettes
or other tobacco products
upon any premises where they are stored or sold;

(ii)

On or before the tenth day of each calendar quarter, every
consumer
wholesaler or retailer
who, during the preceding calendar quarter, has acquired title to or possession of
cigars, snuff or
other tobacco products for
sale,
use or storage in this state, upon which products the
tax imposed by W.S. 39
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‑
103(a)(iii) has not been paid, shall file a return with the department showing the quantity of such products so acquired. The return shall be made upon a form furnished and prescribed by the department and shall contain such other information as the department may require. The return shall be accompanied by a remittance for the full unpaid tax liability shown by it.

(b)

Payment. The following shall apply:

(ii)

There is levied and shall be paid to the department an excise tax at the rate imposed by W.S. 39
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18
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104(b) upon the
sale,
use or storage by
consumers
retailers
of cigarettes in Wyoming but only if the tax imposed by paragraph (i) of this subsection has not been paid;

(c)

Timelines. The following shall apply:

(i)

No later than the twentieth day of the month following the sale of cigarettes, or the month following the end of the calendar quarter for
cigars, snuff or
other
tobacco products each wholesaler shall return to the department the following information on forms furnished by the department:

(D)

The amount paid by the wholesaler to the manufacturer for
cigars, snuff or
other tobacco products
other than
except
moist snuff. For sales of moist snuff, the return shall include the net weight as listed by the manufacturer. The department shall compile the information provided under this subparagraph with respect to
moist snuff
other
tobacco
product
sales on an annual basis and shall report the information to the legislature every five (5) years beginning on July 1, 2014.

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108.

Enforcement.

(c)

Penalties. The following shall apply:

(ii)

The following acts are misdemeanors punishable by a fine of not more than one hundred dollars ($100.00) or imprisonment in the county jail for not more than six (6) months or both:

(A)

Selling or distributing cigarettes
, cigars, snuff
or other tobacco products as a wholesaler
or retailer
without a license;

(v)

The department may revoke the license of any wholesaler
or retailer
violating any provision of this article after a hearing. No license shall be issued to a wholesaler
or retailer
for two (2) years following revocation of his license;

(vi)

Any person who purchases any
cigarette or other
tobacco product for resale in this state from other than a licensed wholesaler
or retailer
is liable for the tax and any penalties and interest imposed under this paragraph as if he were a wholesaler
or retailer
under this act and shall pay an additional penalty of twenty
‑
five percent (25%) of any tax due. Any wholesaler
, retailer
or other person who fails to file any return or to pay any tax within the time required or permitted by this subsection shall be subject to a penalty of five percent (5%) of the amount of the tax due, plus one percent (1%) of the tax for
each month of delinquency or fraction thereof. The department may waive all or any part of this penalty for good cause shown;

(vii)

Any
wholesaler, retailer or other
person who does any act prohibited by this article, or omits, neglects or refuses to comply with any duty imposed upon him by this article, or causes not to be done any of the things required by this article, or does any act prohibited by this article, may, in addition to any other penalty provided by this article, be liable for a penalty of not to exceed one thousand dollars ($1,000.00) or five (5) times the retail value of the tobacco product at issue, whichever is lesser, to be recovered in a civil action;

(viii)

Any
wholesaler, retailer or other
person who fails to pay any tax imposed by this article at the time prescribed by law or department rule or regulation may, in addition to any other penalty provided by this article, be liable for a penalty of not to exceed five (5) times the tax due, but unpaid, to be recovered in a civil action;

(ix)

Any fixture, equipment or other personal property used by a
cigarette or other
tobacco product wholesaler or retailer to commit any of the following acts shall be subject to forfeiture to the state, if the retail value of the cigarettes involved or any tax involved in the act exceeds five hundred dollars ($500.00):

(x)

Any
wholesaler, retailer or other
person who, with intent to defraud, fails to comply with any requirement of this article or regulation prescribed hereunder may, in addition to any other penalty provided in this article, for each such offense, be fined not to exceed ten thousand dollars ($10,000.00), or be imprisoned for not to exceed one (1) year, or both;

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111.

Distribution.

(a)

Fifteen percent (15%)
Eighteen percent (18%)
of the taxes collected pursuant to W.S. 39
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104(a) and (b) shall be distributed to incorporated cities and towns and to boards of county commissioners in the proportion the
cigarette taxes derived from sales within each incorporated city or town or county bears to total cigarette taxes collected. The computation for the distribution shall be made by the department according to the monthly returns filed by the wholesalers
and retailers
.
After the distribution in this subsection and subsection (d) of this section t
he remainder shall be deposited in the state general fund.

(b)

After the distribution in subsection (d) of this section t
he revenue received from the tax imposed by W.S. 39
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18
‑
104(c) and (d) shall be deposited in the general fund.

(d)

Ten percent (10%) of the taxes collected pursuant to W.S.

39
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104(a) through (f) shall be distributed to a tobacco cessation program account and shall be continuously appropriated to the department of health for the tobacco cessation program pursuant to W.S. 9
‑
4
‑
1204 and for any other evidence based tobacco use prevention and cessation initiatives that align with United States centers for disease control and prevention best practices for
comprehensive tobacco control programs and include the goals of preventing youth initiation of tobacco usage, helping youth and adults to quit tobacco use and reducing exposure to secondhand smoke. The computation for the distribution shall be made by the department according to the monthly returns filed by the wholesalers and retailers. Funds appropriated to the department of health under this subsection shall supplement and not supplant tobacco prevention and cessation funding provided to the department of health from the Wyoming tobacco settlement trust fund, the income account established under W.S. 9
‑
4
‑
1203(b) and other sources.

Section 2.

(a)

Each Wyoming licensed wholesaler and retailer required to pay taxes under W.S. 39
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18
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104 shall:

(i)

Take a physical inventory of all:

(A)

Cigarettes in packages bearing Wyoming tax stamps, and all unaffixed Wyoming cigarette tax stamps
possessed by or in the control of the wholesaler or retailer at 11:59 p.m. on the effective date of this act;

(B)

Units of moist snuff possessed by or in the control of the wholesaler or retailer at 11:59 p.m. on the effective date of this act;

(C)

Other tobacco products possessed by or in the control of the wholesaler or retailer at 11:59 p.m. on the effective date of this act.

(ii)

File a return with the department not later than ten (10) days after the effective date of this act, showing the inventories taken under paragraph (i) of this subsection;

(iii)

Pay a floor stock tax at a proportionate rate equal to the increase in tobacco taxes under section 1 of this act for all cigarettes, moist snuff and other tobacco products in the possession or control of the wholesaler or retailer at 11:59 p.m. on the effective date of this act.

(b)

The floor stock tax imposed by subsection (a) of this section may be paid in three (3) installments. The first installment, in an amount equal to at least one
‑
third (1/3) of the total amount due, shall be remitted with the return provided to the department not later than ten (10) days following the effective date of this act. The second installment, in an amount that brings the total amount paid to at least two
‑
thirds (2/3) of the total amount due, shall be remitted one (1) month following the due date of the first installment. The third installment, in an amount equal to the remaining balance, shall be remitted not later than two (2) months following the due date of the first installment. Penalties under W.S. 39
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18
‑
108(c)(iv) shall not be imposed against any outstanding installment payment not yet due from a wholesaler who files the return and makes payments as required under this section.

Section 3
.

This act is effective July 1, 2020
.

(END)

1
HB0205