2014 -- H 8173

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LC005633

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO COMMERCIAL LAW -- UNFAIR SALES PRACTICES -- CIGARETTE TAX

     Introduced By: Representative Raymond E.Gallison

     Date Introduced: May 08, 2014

     Referred To: House Finance

     (by request)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 6-13-1 and 6-13-2 of the General Laws in Chapter 6-13 entitled

"Unfair Sales Practices" are hereby amended to read as follows:

     6-13-1. Definitions. -- (a) "Cost to the retailer" means the invoice cost of the

merchandise to the retailer within thirty (30) days prior to the date of the sale, or the replacement

cost of the merchandise to the retailer within thirty (30) days prior to the date of the sale, in the

quantity last purchased, whichever is lower; less all trade discounts except customary discounts

for cash; to which shall be added:

      (1) Freight charges not otherwise included in the cost of the merchandise;

      (2) Cartage to the retail outlet if performed or paid for by the retailer, which cartage cost

shall be deemed to be three-fourths of one percent (0.75%) of the cost of the merchandise to the

retailer, unless the retailer claims and proves a lower cartage cost; and

      (3) A markup to cover in part the cost of doing business, which markup, in the absence

of proof of a lesser cost, shall be six percent (6%) of the total cost at the retail outlet.

      (b) "Cost to the wholesaler" means the invoice cost of the merchandise to the wholesaler

within thirty (30) days prior to the date of the sale, or the replacement cost of the merchandise to

the wholesaler within thirty (30) days prior to the date of the sale, in the quantity last purchased,

whichever is lower; less all trade discounts except customary discounts for cash; to which shall be

added:

      (1) Freight charges not otherwise included in the cost of the merchandise; and

      (2) Cartage to the retail outlet if performed or paid for by the wholesaler, which cartage

cost shall be deemed to be three-fourths of one percent (0.75%) of the cost of the merchandise to

the wholesaler, unless the wholesaler claims and proves a lower cartage cost; and

      (3) A markup to cover in part the cost of doing business, which markup, in the absence

of proof of a lesser cost shall be two percent (2%) of the total cost at the wholesale establishment.

      (c)(b) Where two (2) or more items are advertised, offered for sale, or sold at a combined

price, the price of each item shall be determined in the manner stated in subsections (a) and (b)

herein.

      (d)(c) "Sell at retail," "sales at retail," and "retail sale" mean and include any transfer of

title to tangible personal property for a valuable consideration made in the ordinary course of

trade or in the usual prosecution of the seller's business to the purchaser for consumption or use

other than resale or further processing or manufacturing. In this and in the preceding subsection

the previous terms shall include any transfer of property where title is retained by the seller as

security for the payment of the purchase price.

      (e)(d) "Retailer" means and includes every person, co-partnership, corporation or

association engaged in the business of making sales at retail within this state; provided, that, in

the case of a retailer engaged in the business of making sales both at retail and at wholesale, the

term shall be applied only to the retail portion of the business.

      (f)(e) "Wholesaler" means and includes every person, partnership, corporation, or

association engaged in the business of making sales at wholesale within this state; provided, that,

in the case of a wholesaler engaged in the business of making sales both at wholesale and at

retail, the term shall be applied only to the wholesale portion of the business.

      (g)(f) Whenever any person, partnership, corporation, or association in the course of

doing business performs the functions of both wholesaler and retailer without actually being

engaged in the business of making sales at wholesale, the term "wholesaler" means and includes

that function of the business of preparation for sale at the retail outlet, and the term "retailer" shall

be applied only to the retail portion of the business.

      (h)(g) "Household" means and includes those who dwell under the same roof, house or

apartment.

      (i)(h) "Rebate" means a refund of a portion of the purchase price made to consumer to

induce purchase of product.

     6-13-2. Computation of cost of tobacco products. -- For purposes of this chapter,

      (1) The tax imposed by chapter 20 of title 44 shall be deemed to be a part of the original

cost of cigarettes to the wholesaler;

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      (2) The invoice or replacement cost of cigarettes, cigars, smoking tobacco, chewing

tobacco, snuff, and other tobacco products, to any wholesaler or retailer, shall be deemed to be

the minimum price in this state at which the products may be were purchased in this state by the

wholesaler or retailer; and

      (3) Merchandise given gratis to a wholesaler or to a retailer for display, advertising, or

promotion purposes, or otherwise, shall not be considered in determining the cost of merchandise

to the wholesaler or retailer, as the case may be.

     SECTION 2. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby

amended by adding thereto the following chapter:

CHAPTER 93

TOBACCO CONTROL PROGRAM

     23-93-1. Tobacco control program – Establishment and funding. – The general

assembly shall include an appropriate amount in the annual budget for appropriations to the state

department of health to implement a tobacco control program and for programs and activities

aimed at reducing tobacco use in Rhode Island as recommended by the centers for disease control

and prevention, or its successor agency, to prevent and reduce tobacco use, reduce exposure to

secondhand smoke, encourage cessation efforts, and identify and eliminate disparities related to

tobacco use and its effects among different population groups.

     SECTION 3. Section 44-20-12.4 of the General Laws in Chapter 44-20 entitled

"Cigarette Tax" is hereby amended to read as follows:

     44-20-12.4. Floor stock tax on cigarettes and stamps. -- (a) Whenever used in this

section, unless the context requires otherwise:

      (1) "Cigarette" means and includes any cigarette as defined in section 44-20-1(2);

      (2) "Person" means and includes each individual, firm, fiduciary, partnership,

corporation, trust, or association, however formed.

      (b) Each person engaging in the business of selling cigarettes at retail in this state shall

pay a tax or excise to the state for the privilege of engaging in that business during any part of the

calendar year 2012 2014. In calendar year 2012 2014, the tax shall be measured by the number of

cigarettes held by the person in this state at 12:01 a.m. on July 1, 2012 2014 and is computed at

the rate of two (2.0) mills for each cigarette on July 1, 2012 2014.

      (c) Each distributor licensed to do business in this state pursuant to this chapter shall pay

a tax or excise to the state for the privilege of engaging in business during any part of the calendar

year 2012 2014. The tax is measured by the number of stamps, whether affixed or to be affixed to

packages of cigarettes, as required by section 44-20-28. In calendar year 2012 2014 the tax is

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measured by the number of stamps, as defined in section 44-20-1(10), whether affixed or to be

affixed, held by the distributor at 12:01 a.m. on July 1, 2012 2014, and is computed at the rate of

two (2.0) mills per cigarette in the package to which the stamps are affixed or to be affixed.

      (d) Each person subject to the payment of the tax imposed by this section shall, on or

before July 10, 2012 2014, file a return with the tax administrator on forms furnished by him or

her, under oath or certified under the penalties of perjury, showing the amount of cigarettes or

stamps in that person's possession in this state at 12:01 a.m. on July 1, 2012 2014, and the amount

of tax due, and shall at the time of filing the return pay the tax to the tax administrator. Failure to

obtain forms shall not be an excuse for the failure to make a return containing the information

required by the tax administrator.

      (e) The tax administrator may promulgate rules and regulations, not inconsistent with

law, with regard to the assessment and collection of the tax imposed by this section.

     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO COMMERCIAL LAW -- UNFAIR SALES PRACTICES -- CIGARETTE TAX

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     This act would repeal the application of the unfair uniform sales practices law as to

transactions between wholesalers and retailers. Also, it would provide for a tobacco control

program to prevent and reduce tobacco use. Also, it would update the floor stock tax on cigarettes

and stamps to be applicable to the year 2014.

     This act would take effect upon passage.

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