REFERENCE TITLE: luxury tax on electronic cigarettes

 

 

 

State of Arizona

House of Representatives

Fifty-second Legislature

First Regular Session

2015

 

 

HB 2596

 

Introduced by

Representatives Otondo: Cardenas, Pratt

 

 

AN ACT

 

Amending sections 42‑3001, 42‑3051 and 42‑3052, Arizona Revised Statutes; amending title 42, chapter 3, article 3, Arizona Revised Statutes, by adding section 42-3105; relating to luxury tax.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 


Be it enacted by the Legislature of the State of Arizona:

Section 1.  Section 42-3001, Arizona Revised Statutes, is amended to read:

START_STATUTE42-3001.  Definitions

In this chapter, unless the context otherwise requires:

1.  "Affix" and "affixed" include imprinting tax meter stamps on packages and individual containers as authorized by the department.

2.  "Brand family" has the same meaning prescribed in section 44‑7111.

3.  "Cider" means vinous liquor that is made from the normal alcoholic fermentation of the juice of sound, ripe apples, pears or other pome fruit, including flavored, sparkling and carbonated cider and cider made from condensed apple, pear or other pome fruit must, and that contains more than one-half of one per cent percent of alcohol by volume but not more than seven per cent percent of alcohol by volume.

4.  "Cigar" means any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco other than any roll of tobacco that is a cigarette, as defined in paragraph 5, subdivision (b) of this section.

5.  "Cigarette" means either of the following:

(a)  Any roll of tobacco wrapped in paper or any substance not containing tobacco.

(b)  Any roll of tobacco wrapped in any substance containing tobacco that, because of its appearance, the type of tobacco used in the filler or its packaging and labeling, is likely to be offered to or purchased by a consumer as a cigarette described in subdivision (a) of this paragraph.  This subdivision shall be interpreted consistently with the classification guidelines established by the federal alcohol and tobacco tax and trade bureau.

6.  "Cigarette distributor" means a distributor of cigarettes without stamps affixed as required by this article who is required to be licensed under section 42‑3201.  Cigarette distributor does not include a retailer or any person who holds a permit as a cigarette manufacturer, export warehouse proprietor or importer under 26 United States Code section 5712 if the person sells or distributes cigarettes in this state only to licensed cigarette distributors or to another person who holds a permit under 26 United States Code section 5712 as an export warehouse proprietor or manufacturer.

7.  "Cigarette importer" means a distributor who directly or indirectly imports into the United States a finished cigarette for sale or distribution and who is required to be licensed under section 42‑3201.

8.  "Cigarette manufacturer" means a distributor who manufactures, fabricates, assembles, processes or labels a finished cigarette, including a distributor who uses or makes available for use a tobacco product rolling vending machine in the manufacture, fabrication, assembly or processing of tobacco products.

9.  "Consumer" means a person in this state who comes into possession of any luxury subject to the tax imposed by this chapter and who, on coming into possession of the luxury, is not a distributor intending to sell or distribute the luxury, retailer or wholesaler.

10.  "Craft distiller" means a distiller in the United States or in a territory or possession of the United States that holds a license pursuant to section 4‑205.10.

11.  "Distributor" means any person who manufactures, produces, ships, transports or imports into this state or in any manner acquires or possesses for the purpose of making the first sale of the following:

(a)  Cigarettes without Arizona tax stamps affixed as required by this article.

(b)  Other tobacco products on which the taxes have not been paid as required by this chapter.

12.  "Farm winery" has the same meaning prescribed in section 4-101.

13.  "First sale" means the initial sale or distribution in intrastate commerce or the initial use or consumption of cigarettes or other tobacco products.

14.  "Luxury" means any article, object or device on which a tax is imposed under this chapter.

15.  "Malt liquor" means any liquid that contains more than one‑half of one per cent percent alcohol by volume and that is made by the process of fermentation and not distillation of hops or grains, but not including:

(a)  Liquids made by the process of distillation of such substances.

(b)  Medicines that are unsuitable for beverage purposes.

16.  "Master settlement agreement" has the same meaning prescribed in section 44‑7101.

17.  "Microbrewery" has the same meaning prescribed in section 4‑101.

18.  "Nonparticipating manufacturer" has the same meaning prescribed in section 44‑7111.

19.  "Participating manufacturer" has the same meaning prescribed in section 44‑7111.

20.  "Person" means any individual, firm, partnership, joint venture, association, corporation, municipal corporation, estate, trust, club, society or other group or combination acting as a unit, and the plural as well as the singular number.

21.  "Place of business" means a place where an order is received or where tobacco products are sold, distributed or transferred.

22.  "Retailer" means any person that comes into possession of any luxury subject to the taxes imposed by this chapter for the purpose of selling it for consumption and not for resale.

23.  "Spirituous liquor" means any liquid that contains more than one‑half of one per cent percent alcohol by volume, that is produced by distillation of any fermented substance and that is used or prepared for use as a beverage.  Spirituous liquor does not include medicines that are unsuitable for beverage purposes.

24.  "Tobacco product manufacturer" has the same meaning prescribed in section 44‑7101.

25.  "Tobacco products" means all luxuries included in section 42‑3052, paragraphs 5 through 9.

26.  "Vapor product" means a noncombustible tobacco-derived product containing nicotine that employs a mechanical heating element, battery or circuit, regardless of shape or size, that can be used to heat a liquid nicotine solution contained in cartridges.  Vapor product does not include any product that is regulated by the United States food and drug administration under chapter V of the federal food, drug and cosmetic act.

26.  27.  "Vehicle" means a device in, on or by which a person or property is or may be transported or drawn on the roads of this state regardless of the means by which it is propelled or whether it runs on a track.

27.  28.  "Vinous liquor" means any liquid that contains more than one‑half of one per cent percent alcohol by volume and that is made by the process of fermentation of grapes, berries, fruits, vegetables or other substances but does not include:

(a)  Liquids in which hops or grains are used in the process of fermentation.

(b)  Liquids made by the process of distillation of hops or grains.

(c)  Medicines that are unsuitable for beverage purposes.

28.  29.  "Wholesaler" means a person that sells any spirituous, vinous or malt liquor taxed under this chapter to retail dealers or for the purposes of resale only. END_STATUTE

Sec. 2.  Section 42-3051, Arizona Revised Statutes, is amended to read:

START_STATUTE42-3051.  Levy of tax

In addition to all other taxes there is levied and imposed and there shall be collected and deposited, pursuant to sections 35‑146 and 35‑147, in the manner provided by this chapter, taxes on all spirituous, vinous and malt liquors and on all cigarettes, cigars, vapor products, smoking tobacco, plug tobacco, snuff and other forms of tobacco, for use as may be prescribed by law. END_STATUTE

Sec. 3.  Section 42-3052, Arizona Revised Statutes, is amended to read:

START_STATUTE42-3052.  Classifications of luxuries; rates of tax

The taxes under this chapter are imposed at the following rates:

1.  On each sealed container of spirituous liquor at the rate of three dollars per gallon and at a proportionate rate for any lesser or greater quantity than one gallon.

2.  On each container of vinous liquor, except cider, of which the alcoholic content is not greater than twenty‑four per cent percent by volume at the rate of eighty‑four cents per gallon and at a proportionate rate for any lesser or greater quantity than one gallon.

3.  On each container of vinous liquor of which the alcoholic content is greater than twenty‑four per cent percent by volume, containing eight ounces or less, twenty‑five cents, and for each eight ounces for containers containing more than eight ounces, twenty‑five cents.

4.  On each gallon of malt liquor or cider, sixteen cents, and at a proportionate rate for any lesser or greater quantity than one gallon.

5.  On each cigarette, nine‑tenths cent.

6.  On smoking tobacco, snuff, fine cut chewing tobacco, cut and granulated tobacco, shorts and refuse of fine cut chewing tobacco, and refuse, scraps, clippings, cuttings and sweepings of tobacco, excluding tobacco powder or tobacco products used exclusively for agricultural or horticultural purposes and unfit for human consumption, two cents per ounce or major fraction of an ounce.

7.  On all cavendish, plug or twist tobacco, one‑half cent per ounce or fractional part of an ounce.

8.  On each twenty small cigars or fractional part weighing not more than three pounds per thousand, four cents.

9.  On cigars of all descriptions except those included in paragraph 8 of this section, made of tobacco or any tobacco substitute:

(a)  If manufactured to retail at not more than five cents each, two cents on each three cigars.

(b)  If manufactured to retail at more than five cents each, two cents on each cigar.

10.  On vapor products, nine‑tenths cent for each 0.05 milliliter of liquid nicotine solution. END_STATUTE

Sec. 4.  Title 42, chapter 3, article 3, Arizona Revised Statutes, is amended by adding section 42-3105, to read:

START_STATUTE42-3105.  Monies allocated for hazardous fuel reduction and forest management; exemption

A.  ten percent of the monies collected pursuant to section 42‑3052, paragraph 10 are allocated and appropriated annually to the state forester for the purposes of:

1.  Reducing the volume of hazardous fuels on nonfederal forested lands in this state pursuant to section 37‑642.

2.  Fire suppression and forest management pursuant to section 37‑483.

B.  monies appropriated by this section are exempt from the provisions of section 35‑190 relating to lapsing of appropriations. END_STATUTE

Sec. 5.  Requirements for enactment; two-thirds vote

Pursuant to article IX, section 22, Constitution of Arizona, this act is effective only on the affirmative vote of at least two-thirds of the members of each house of the legislature and is effective immediately on the signature of the governor or, if the governor vetoes this act, on the subsequent affirmative vote of at least three-fourths of the members of each house of the legislature.