2015 -- H 6298

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LC002823

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TAXATION

     Introduced By: Representatives Diaz, Maldonado, Fogarty, and Almeida

     Date Introduced: June 09, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 44-20-13.2 of the General Laws in Chapter 44-20 entitled

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

     44-20-13.2. Tax imposed on smokeless tobacco, cigars, and pipe tobacco products. --

(a) A tax is imposed on all smokeless tobacco, cigars, except little cigars as provided in chapter

20.2 of title 44, and pipe tobacco products sold or held for sale in the state by any person, the

payment of the tax to be accomplished according to a mechanism established by the

administrator, division of taxation, department of administration. Any tobacco product on which

the proper amount of tax provided for in this chapter has been paid, payment being evidenced by

a stamp, is not subject to a further tax under this chapter. The tax imposed by this section shall be

as follows:

      (1) At the rate of eighty percent (80%) of the wholesale cost of cigars, except little cigars

as provided in chapter 20.2 of title 44, pipe tobacco products and smokeless tobacco other than

snuff.

      (2) Notwithstanding the eighty percent (80%) rate in subsection (a) above, in the case of

cigars, the tax shall not exceed fifty cents ($.50) for each cigar.

      (3) At the rate of one dollar ($1.00) per ounce of snuff, and a proportionate tax at the like

rate on all fractional parts of an ounce thereof. Such tax shall be computed based on the net

weight as listed by the manufacturer, provided, however, that any product listed by the

manufacturer as having a net weight of less than 1.2 ounces shall be taxed as if the product has a

net weight of 1.2 ounces.

      (b) Any dealer having in his or her possession any tobacco, cigars, and pipe tobacco

products with respect to the storage or use of which a tax is imposed by this section shall, within

five (5) days after coming into possession of the tobacco, cigars, and pipe tobacco in this state,

file a return with the tax administrator in a form prescribed by the tax administrator. The return

shall be accompanied by a payment of the amount of the tax shown on the form to be due.

Records required under this section shall be preserved on the premises described in the relevant

license in such a manner as to ensure permanency and accessibility for inspection at reasonable

hours by authorized personnel of the administrator.

      (c) The proceeds collected are paid into the general fund.

     SECTION 2. Sections 44-20.2-1 and 44-20.2-2 of the General Laws in Chapter 44-20.2

entitled "Little Cigar Tax" are hereby amended to read as follows:

     44-20.2-1. Definitions. -- Whenever used in this chapter, unless the context requires

otherwise:

      (1) "Administrator" means the tax administrator;

      (2) "Dealer" means any person whether located within or outside of this state, who sells

or distributes little cigars to a consumer in this state;

      (3) "Distributor" means any person:

      (i) Whether located within or outside of this state, other than a dealer, who sells or

distributes little cigars within or into this state. Such term shall not include any little cigar

manufacturer, export warehouse proprietor, or importer with a valid permit under 26 U.S.C. §

5712, if such person sells or distributes little cigars in this state only to licensed distributors, or to

an export warehouse proprietor or another manufacturer with a valid permit under 26 U.S.C. §

5712;

      (ii) Selling little cigars directly to consumers in this state by means of at least twenty-five

(25) little cigar vending machines.

      (4) "Importer" means any person who imports into the United States, either directly or

indirectly, a finished little cigar for sale or distribution;

      (5) "Licensed" when used with reference to a manufacturer, importer, distributor or

dealer, means only those persons who hold a valid and current license issued under § 44-20-2 for

the type of business being engaged in. When the term "licensed" is used before a list of entities,

such as "licensed manufacturer, importer, wholesale dealer, or retailer dealer," such term shall be

deemed to apply to each entity in such list;

      (6) "Little cigars" means and includes any roll, made wholly or in part of tobacco,

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irrespective of size or shape and irrespective of whether the tobacco is flavored, adulterated or

mixed with any other ingredient, where such roll has a wrapper or cover made of tobacco

wrapped in leaf tobacco or any substance containing tobacco paper or any other material and

where such roll has an integrated filter, except where such wrapper is wholly or in greater part

made of tobacco and where such roll has an integrated filter and weighs over four (4) four and

one-half (4½) pounds per thousand (1,000);

      (7) "Manufacturer" means any person who manufactures, fabricates, assembles,

processes, or labels a finished little cigar;

      (8) "Person" means any individual, firm, fiduciary, partnership, corporation, trust, or

association, however formed;

      (9) "Place of business" means and includes any place where little cigars are sold or

where little cigars are stored or kept for the purpose of sale or consumption, including any vessel,

vehicle, airplane, train, or vending machine;

      (10) "Sale" or "Sell" includes and applies to gifts, exchanges, and barter;

      (11) "Snuff" means any finely cut, ground, or powdered tobacco that is not intended to

be smoked;

      (12) "Stamp" means the impression, device, stamp, label, or print manufactured, printed,

or made as prescribed by the administrator to be affixed to packages of little cigars, as evidence

of the payment of the tax provided by this chapter or to indicate that the little cigars are intended

for a sale or distribution in this state that is exempt from state tax under the provisions of state

law and also includes impressions made by metering machines authorized to be used under the

provisions of this chapter.

     44-20.2-2. Tax imposed on little cigars sold. -- (a) The tax imposed on little cigars shall

be imposed at the same rate as the tax on cigarettes in § 44-20-12, and shall otherwise be imposed

in accordance with the provisions of §§ 44-20-2 -- 44-20-55.

     (b) All little cigars shall be sold in packs of twenty (20) or more.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION

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     This act would amend the definition of "little cigars"; would tax "little cigars" at the same

rate as cigarettes; would require "little cigars" be sold in packs of twenty (20) or more; and would

distinguish "little cigars" from cigars for purpose of taxation.

     This act would take effect upon passage.

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