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House File 21 - IntroducedA Bill ForAn Act 1relating to nicotine solution products, including
2taxation of such products, making appropriations, and making
3penalties applicable.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 142A.2, subsection 8, Code 2023, is
2amended to read as follows:
38. “Manufacturer” means manufacturer as defined in section
4 sections 453A.1 and 453A.42.
5 Sec. 2. Section 142A.6, subsection 6, paragraph d, Code
62023, is amended to read as follows:
7d. For the purpose of this subsection, manufacturer,
8distributor, wholesaler, retailer, and distributing agent mean
9as defined in section sections 453A.1 and 453A.42.
10 Sec. 3. Section 232C.4, subsection 3, Code 2023, is amended
11to read as follows:
123. An emancipated minor shall remain subject to voting
13restrictions under chapter 48A, gambling restrictions under
14chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
15contest restrictions under chapter 99E, alcohol restrictions
16under chapter 123, compulsory attendance requirements under
17chapter 299, and cigarette, tobacco product, alternative
18nicotine product, vapor product, and nicotine solution product
19 restrictions under chapter 453A.
20 Sec. 4. Section 321.216C, Code 2023, is amended to read as
21follows:
22321.216C Use of driver’s license or nonoperator’s
23identification card by underage person to obtain tobacco, tobacco
24products, alternative nicotine products, vapor products, nicotine
25solution products, or cigarettes.
26A person who is under the age of twenty-one, who alters
27or displays or has in the person’s possession a fictitious
28or fraudulently altered driver’s license or nonoperator’s
29identification card and who uses the license or card to violate
30or attempt to violate section 453A.2, subsection 2, commits a
31simple misdemeanor punishable as a scheduled violation under
32section 805.8A, subsection 4. The court shall forward a copy
33of the conviction to the department.
34 Sec. 5. Section 331.653, subsection 11, Code 2023, is
35amended to read as follows:
-1- 111. Carry out duties relating to the seizure and forfeiture
2of cigarettes, tobacco products, nicotine solution products,
3 vehicles, and other property used in violation of cigarette,
4tobacco products, and nicotine solution products tax laws as
5provided in section 453A.32.
6 Sec. 6. Section 331.756, subsection 19, Code 2023, is
7amended to read as follows:
819. Assist, at the request of the director of revenue, in
9the enforcement of cigar and cigarette, tobacco product, and
10nicotine solution product tax laws as provided in sections
11453A.32 and 453A.49.
12 Sec. 7. Section 423.3, subsection 57, paragraph h, Code
132023, is amended to read as follows:
14h. “Tobacco” means cigarettes, cigars, chewing or pipe
15tobacco, or any other item that contains tobacco products, and
16nicotine solution products as defined in sections 453A.1 and
17453A.42.
18 Sec. 8. Section 453A.1, Code 2023, is amended to read as
19follows:
20453A.1 Definitions.
21The following words, terms, and phrases, when used in this
22chapter, shall, for the purpose of this chapter, have the
23meanings respectively ascribed to them.
241. “Alternative nicotine product” means a product, not
25consisting of or containing tobacco, that provides for the
26ingestion into the body of nicotine, whether by chewing,
27absorbing, dissolving, inhaling, snorting, or sniffing, or
28by any other means. “Alternative nicotine product” does not
29include cigarettes, tobacco products, or vapor products, or a
30product that is regulated as a drug or device by the United
31States food and drug administration under chapter V of the
32federal Food, Drug, and Cosmetic Act.
332. “Attorney general” shall mean means the attorney
34general of the state or the attorney general’s duly authorized
35assistants and employees.
-2- 13. “Carton” means a box or container of any kind in which
2ten or more packages or packs of cigarettes or tobacco products
3are offered for sale, sold, or otherwise distributed to
4consumers.
54. “Cigarette” means any roll for smoking made wholly or in
6part of tobacco, or any substitute for tobacco, irrespective of
7size or shape and irrespective of tobacco or any substitute for
8tobacco being flavored, adulterated, or mixed with any other
9ingredient, where such roll has a wrapper or cover made of
10paper or any other material. However, “cigarette” shall not be
11construed to does not include cigars.
125. “Cigarette vending machine” means any self-service device
13offered for public use which, upon payment or insertion of
14loose tobacco product, dispenses, or assembles and dispenses,
15cigarettes or tobacco products.
166. “Cigarette vendor” means any person who by contract,
17agreement, or ownership takes responsibility for furnishing,
18installing, servicing, operating, or maintaining one or
19more cigarette vending machines for the purpose of selling
20cigarettes at retail.
217. 5. “Counterfeit stamp” shall mean means any stamp,
22label, print, indicium, or character which evidences, or
23purports to evidence the payment of any tax levied by this
24chapter, and which stamp, label, print, indicium, or character
25has not been printed, manufactured, or made by authority of
26the director as hereinafter provided, and which has not been
27 issued, sold, or circulated by the department or a bank as
28applicable pursuant to section 453A.8.
298. 6. “Delivery sale” means any sale of an alternative
30nicotine product, or a vapor product, or a nicotine solution
31product to a purchaser in this state where the purchaser
32submits the order for such sale by means of a telephonic or
33other method of voice transmission, mail or any other delivery
34service, or the internet or other online service and the
35alternative nicotine product, or vapor product, or a nicotine
-3-1solution product is delivered by use of mail or a delivery
2service. The sale of an alternative nicotine product, or
3 vapor product, or a nicotine solution product shall constitute
4a delivery sale regardless of whether the seller is located
5in this state. “Delivery sale” does not include a sale to a
6distributor or retailer of any alternative nicotine product, or
7 vapor product, or a nicotine solution product not for personal
8consumption.
99. 7. “Department” means the department of revenue.
1010. 8. “Director” means the director of revenue or the
11director’s duly authorized assistants and employees.
1211. 9. “Distributing agent” shall mean and include
13 means every person in this state who acts as an agent of
14any manufacturer outside of the state by storing cigarettes
15received in interstate commerce from such manufacturer subject
16to distribution or delivery to distributors upon orders
17received by said the manufacturer in interstate commerce and
18transmitted to such the distributing agent for fulfillment from
19such the place of storage.
2012. 10. “Distributing agent’s permit” shall mean and
21include means permits issued by the department to distributing
22agents.
2313. 11. “Distributor” shall mean and include means every
24person in this state who manufactures or produces cigarettes
25or who ships, transports, or imports into this state or in any
26manner acquires or possesses cigarettes without stamps affixed
27for the purpose of making a “first sale” of the same cigarettes
28 within the state.
2914. “Drop shipment” shall mean and include any delivery
30of cigarettes received by any person within this state when
31payment for such cigarettes is made to the shipper or seller by
32or through a person other than the consignee.
3315. 12. “First sale” shall mean and include means the first
34sale or distribution of cigarettes in intrastate commerce, or
35the first use or consumption of cigarettes within this state.
-4- 116. 13. “Individual packages of cigarettes” shall mean
2and include means every package of cigarettes or quantity of
3cigarettes assembled and ordinarily sold at retail.
417. 14. “Manufacturer” shall mean and include means every
5person who ships cigarettes into this state from outside the
6state.
718. 15. “Manufacturer’s permit” shall mean and include
8 means permits issued by the department to a manufacturer.
916. “Nicotine solution product” means any cartridge, bottle,
10or other package that contains nicotine, including nicotine
11made or derived from tobacco or sources other than tobacco,
12in a solution or other substance that is consumed or meant
13to be consumed through the use of a heating element, power
14source, electronic circuit, or other electronic, chemical, or
15mechanical means that produces vapor or aerosol. “Nicotine
16solution product” includes any alternative nicotine product,
17vapor product, or other product that contains an integrated,
18nonrefillable or nonreusable nicotine solution product
19component.
2019. 17. “Package” or “pack” means a container of any kind
21in which cigarettes or tobacco products are offered for sale,
22sold, or otherwise distributed to consumers.
2320. 18. “Person” shall mean and include means every
24individual, firm, association, joint stock company, syndicate,
25partnership, corporation, trustee, agency or receiver, or
26respective legal representative.
2721. 19. “Place of business” is construed to mean and
28include means any place where cigarettes are sold or where
29cigarettes are stored within or without the state of Iowa by
30the holder of an Iowa permit or kept for the purpose of sale
31or consumption; or if. “Place of business” includes a vehicle
32or train on which or from which cigarettes are sold from any
33vehicle or train, the vehicle or train on which or from which
34such cigarettes are sold shall constitute a place of business;
35or and, for a business within or without the state that
-5-1conducts delivery sales, any place where alternative nicotine
2products, or vapor products, or nicotine solution products are
3sold or where alternative nicotine products, or vapor products,
4or nicotine solution products are kept for the purpose of sale,
5including delivery sales.
622. 20. “Previously used stamp” shall mean and include
7 means any stamp which is used, sold, or possessed for the
8purpose of sale or use, to evidence the payment of the tax
9herein imposed on an individual package of cigarettes after
10said the stamp has, anterior to such use, sale, or possession,
11 been used on a previous or separate individual package of
12cigarettes to evidence the payment of the tax as aforesaid.
1323. 21. “Retailer” shall mean and include means every
14person in this state who shall sell, distribute, or offer
15 sells, distributes, or offers for sale for consumption or
16possess possesses for the purpose of sale for consumption,
17cigarettes, alternative nicotine products, or vapor products,
18or nicotine solution products, irrespective of quantity or
19amount or the number of sales.
2024. 22. “Retail permit” shall mean and include means
21 permits issued to retailers.
2225. 23. “Self-service display” means any manner of product
23display, placement, or storage from which a person purchasing
24the product may take possession of the product, prior to
25purchase, without assistance from the retailer or employee of
26the retailer, in removing the product from a restricted access
27location.
2826. 24. “Stamps” “Stamp” or “stamps” means the stamp or
29stamps printed, manufactured, or made by authority of the
30director and issued, sold, or circulated by the department or a
31bank as applicable pursuant to section 453A.8 and by the use of
32which the tax levied is paid. It “Stamp” or “stamps” also means
33any impression, indicium, or character fixed upon packages
34of cigarettes by a metered stamping machine or device which
35may be authorized by the director to the holder of state or
-6-1manufacturers’ permits and by the use of which the tax levied
2is paid.
327. 25. “State permit” shall mean and include means permits
4issued by the department to distributors, wholesalers, and
5retailers.
628. 26. “Tobacco products” means cigars; little cigars as
7defined in section 453A.42, subsection 6; cheroots; stogies;
8periques; granulated;, plug cut, crimp cut, ready rubbed,
9and other smoking tobacco; snuff,; snuff flour; cavendish;
10plug and twist tobacco; fine-cut and other chewing tobaccos;
11shorts; or refuse scraps, clippings, cuttings, and sweepings
12of tobacco,; and other kinds and forms of tobacco, prepared in
13such manner as to be suitable for chewing or smoking in a pipe
14or otherwise, or both for chewing and smoking; but does not
15mean cigarettes.
1629. 27. “Vapor product” means any noncombustible product,
17which may or may not contain nicotine, that employs a heating
18element, power source, electronic circuit, or other electronic,
19chemical, or mechanical means, regardless of shape or size,
20that can be used to produce vapor from a solution or other
21substance. “Vapor product” includes an electronic cigarette,
22electronic cigar, electronic cigarillo, electronic pipe, or
23similar product or device, and any cartridge or other container
24of a solution or other substance, which may or may not contain
25nicotine, that is intended to be used with or in an electronic
26cigarette, electronic cigar, electronic cigarillo, electronic
27pipe, or similar product or device. “Vapor product” does not
28include a product regulated as a drug or device by the United
29States food and drug administration under chapter V of the
30federal Food, Drug, and Cosmetic Act.
3128. “Vending machine” means any self-service device
32offered for public use which, upon payment or the insertion of
33loose tobacco product, dispenses or assembles and dispenses
34cigarettes, tobacco products, alternative nicotine products,
35vapor products, or nicotine solution products.
-7- 129. “Vendor” means any person who by contract, agreement,
2or ownership takes responsibility for furnishing, installing,
3servicing, operating, or maintaining one or more vending
4machines for the purpose of selling cigarettes, tobacco
5products, alternative nicotine products, vapor products, or
6nicotine solution products at retail.
730. “Wholesaler” shall mean and include means every person
8other than a distributor or distributing agent who engages in
9the business of selling or distributing cigarettes within the
10state, for the purpose of resale.
11 Sec. 9. Section 453A.2, subsections 1, 2, 3, and 8, Code
122023, are amended to read as follows:
131. A person shall not sell, give, or otherwise supply any
14tobacco, tobacco products, alternative nicotine products, vapor
15products, nicotine solution products, or cigarettes to any
16person under twenty-one years of age.
172. A person under twenty-one years of age shall not
18smoke, use, possess, purchase, or attempt to purchase any
19tobacco, tobacco products, alternative nicotine products, vapor
20products, nicotine solution products, or cigarettes.
213. Possession of tobacco, tobacco products, alternative
22nicotine products, vapor products, nicotine solution products,
23 or cigarettes by an individual under twenty-one years of
24age does not constitute a violation under this section if
25the individual under twenty-one years of age possesses the
26tobacco, tobacco products, alternative nicotine products, vapor
27products, nicotine solution products, or cigarettes as part
28of the individual’s employment and the individual is employed
29by a person who holds a valid permit under this chapter or
30who lawfully offers for sale or sells cigarettes, or tobacco
31products, alternative nicotine products, vapor products, or
32nicotine solution products.
338. a. A person shall not be guilty of a violation of this
34section if conduct that would otherwise constitute a violation
35is performed to assess compliance with tobacco, tobacco
-8-1products, alternative nicotine products, vapor products,
2nicotine solution products, or cigarette laws if any of the
3following applies:
4(1) The compliance effort is conducted by or under the
5supervision of law enforcement officers.
6(2) The compliance effort is conducted with the advance
7knowledge of law enforcement officers and reasonable measures
8are adopted by those conducting the effort to ensure that use
9of tobacco, tobacco products, alternative nicotine products,
10vapor products, nicotine solution products, or cigarettes by
11individuals under twenty-one years of age does not result from
12participation by any individual under twenty-one years of age
13in the compliance effort.
14b. For the purposes of this subsection, “law enforcement
15officer” means a peace officer as defined in section 801.4 and
16includes persons designated under subsection 4 to enforce this
17section.
18 Sec. 10. Section 453A.4, subsection 1, Code 2023, is amended
19to read as follows:
201. If a person holding a permit under this chapter or an
21employee of such a permittee has a reasonable belief based on
22factual evidence that a driver’s license as defined in section
23321.1, subsection 20A, or nonoperator’s identification card
24issued pursuant to section 321.190 offered by a person who
25wishes to purchase tobacco, tobacco products, alternative
26nicotine products, vapor products, nicotine solution
27products, or cigarettes is altered or falsified or belongs
28to another person, the permittee or employee may retain
29the driver’s license or nonoperator’s identification card.
30Within twenty-four hours, the card shall be delivered to the
31appropriate city or county law enforcement agency of the
32jurisdiction in which the permittee’s premises are located, and
33the permittee shall file a written report of the circumstances
34under which the card was retained. The local law enforcement
35agency may investigate whether a violation of section 321.216,
-9-1321.216A, or 321.216C has occurred. If an investigation is not
2initiated or probable cause is not established by the local
3law enforcement agency, the driver’s license or nonoperator’s
4identification card shall be delivered to the person to whom it
5was issued. The local law enforcement agency may forward the
6card with the report to the state department of transportation
7for investigation, in which case, the state department
8of transportation may investigate whether a violation of
9section 321.216, 321.216A, or 321.216C has occurred. The
10state department of transportation shall return the card to
11the person to whom it was issued if an investigation is not
12initiated or probable cause is not established.
13 Sec. 11. Section 453A.5, subsection 1, Code 2023, is amended
14to read as follows:
151. The alcoholic beverages division of the department of
16commerce shall develop a tobacco compliance employee training
17program not to exceed two hours in length for employees and
18prospective employees of retailers, as defined in sections
19453A.1 and 453A.42, to inform the employees about state and
20federal laws and regulations regarding the sale of tobacco,
21tobacco products, alternative nicotine products, vapor
22products, nicotine solution products, and cigarettes to persons
23under twenty-one years of age and compliance with and the
24importance of laws regarding the sale of tobacco, tobacco
25products, alternative nicotine products, vapor products,
26nicotine solution products, and cigarettes to persons under
27twenty-one years of age.
28 Sec. 12. Section 453A.6, subsections 2 and 3, Code 2023, are
29amended to read as follows:
302. The said tax shall be paid only once by the person
31making the “first sale” in this state, and shall become due
32and payable as soon as such cigarettes are subject to a “first
33sale” in Iowa, it being intended to impose the tax as soon as
34such cigarettes are received by any person in Iowa for the
35purpose of making a “first sale” of same the cigarettes. If
-10-1the person making the “first sale” did not pay such tax, it
2 the tax shall be paid by any person into whose possession such
3cigarettes come until said the tax has been paid in full.
4No A person, however, shall not be required to pay a tax on
5cigarettes brought into this state on or about the person in
6quantities of forty cigarettes or less, when such cigarettes
7have had the individual packages or seals thereof of the
8packages in which the cigarettes were contained broken and when
9such cigarettes are actually used by said the person and not
10sold or offered for sale.
113. Payment of the tax shall be evidenced by stamps purchased
12from the department or a bank authorized to sell stamps
13pursuant to section 453A.8 by a distributor or manufacturer
14and securely affixed to each individual package of cigarettes
15in amounts equal to the tax as imposed by this chapter, or
16by the impressing of an indicium upon individual packages of
17cigarettes, under regulations prescribed by the director.
18 Sec. 13. Section 453A.6, subsection 8, unnumbered paragraph
191, Code 2023, is amended to read as follows:
20Any permit holder owning, renting, leasing, or otherwise
21operating a cigarette vending machine into which loose tobacco
22products are inserted and from which assembled cigarettes are
23dispensed shall do all the following:
24 Sec. 14. Section 453A.7, subsection 1, Code 2023, is amended
25to read as follows:
261. The director of the department of administrative
27services shall have printed or manufactured, cigarette and
28little cigar tax stamps of such design, size, denomination,
29and type and in such quantities as may be determined by the
30director of revenue. The stamps shall be so manufactured as
31 to render them the stamps easy to be securely attached to each
32individual package of cigarettes and little cigars or cigarette
33papers. The cigarette and little cigar tax stamps shall be
34in the possession of and under the control of the director of
35revenue and the director shall keep accurate records of all
-11-1cigarette and little cigar tax stamps.
2 Sec. 15. Section 453A.8, subsections 2 and 3, Code 2023, are
3amended to read as follows:
42. Orders for cigarette tax stamps, including the payment
5for such stamps, shall be sent direct to the department on a
6form to be prescribed by the director, except as provided in
7subsection 6.
83. a. The department may make issue refunds on unused
9stamps to the person who purchased the stamps at a price equal
10to the amount paid for the stamps when proof satisfactory to
11the department is furnished that any stamps upon which a refund
12is requested were properly purchased from the department and
13paid for by the person requesting the refund. In making the
14refund, the department shall prepare a voucher showing the
15amount of refund due and to whom payable and shall authorize
16the department of administrative services to issue a warrant
17upon order of the director to pay the refund out of any funds in
18the state treasury not otherwise appropriated.
19b. The director may promulgate adopt rules providing for
20refunds of the face value of stamps, less any discount, affixed
21to any cigarettes package, the contents of which have become
22unfit for use and consumption, unsalable, or for any other
23legitimate loss which may occur, upon proof of such loss.
24Refund Refunds shall be made in the same manner as provided for
25unused stamps.
26 Sec. 16. Section 453A.10, Code 2023, is amended to read as
27follows:
28453A.10 Affixing of stamps by distributors.
29Except as provided in section 453A.17, every distributor
30holding an Iowa permit shall cause to be affixed, within or
31without the state of Iowa, upon every individual package
32of cigarettes received by the distributor in this state or
33for distribution in this state, upon which no a sufficient
34tax stamp is not already affixed, a stamp or stamps of
35an amount equal to the tax due thereon on the package of
-12-1cigarettes. Such stamps shall be affixed within forty-eight
2hours, exclusive of a Sunday or a holiday, from the hour the
3cigarettes were received, and shall be affixed before such
4distributor sells, offers for sale, consumes, or otherwise
5distributes or transports the same cigarettes. It shall be
6unlawful for any person, other than a distributing agent or
7distributor, bonded pursuant to section 453A.14, or common
8carrier to receive or accept delivery of any cigarettes without
9stamps affixed to evidence the payment of the tax, or without
10having in the distributor’s, distributing agent’s, or common
11carrier’s possession the requisite amount or number of stamps
12necessary to stamp such cigarettes, and the. The possession
13of any unstamped cigarettes, without the possession of the
14requisite amount or number of stamps, shall be prima facie
15evidence of the violation of this provision. As used in this
16section, “holiday” means the same as defined in section 421.9A.
17 Sec. 17. Section 453A.11, Code 2023, is amended to read as
18follows:
19453A.11 Cancellation of stamps.
20Stamps affixed to a package of cigarettes shall not
21be canceled by any letter, numeral, or other mark of
22identification or otherwise mutilated in any manner that will
23prevent or hinder the department in making an examination as
24to the genuineness of the stamp. However, the director may
25require such cancellation of cancel the tax stamps affixed
26to packages of cigarettes which is as necessary to carry out
27properly the provisions of this subchapter. A person who
28cancels or causes the cancellation of stamps in violation of
29this section shall be considered in possession of unstamped
30cigarettes and is subject to the penalty for possession of
31unstamped cigarettes as provided in section 453A.31, subsection
321, paragraph “a”.
33 Sec. 18. Section 453A.13, Code 2023, is amended to read as
34follows:
35453A.13 Distributor’s, wholesaler’s, vendor’s, and retailer’s
-13-1permits.
21. Permits required. Every distributor, wholesaler,
3cigarette vendor, and retailer, now engaged or who desires to
4become engaged in the sale or use of cigarettes, upon which a
5tax is required to be paid, and every retailer now engaged or
6who desires to become engaged in selling, offering for sale, or
7distributing alternative nicotine products, or vapor products,
8or nicotine solution products, including through delivery
9sales, shall obtain a state or retail permit as a distributor,
10wholesaler, cigarette vendor, or retailer, as the case may be.
112. Issuance or denial.
12a. The department shall issue state permits to distributors,
13wholesalers, and cigarette vendors, and retailers that make
14delivery sales of alternative nicotine products, and vapor
15products, and nicotine solution products subject to the
16conditions provided in this subchapter. If an out-of-state
17retailer makes delivery sales of alternative nicotine
18products, or vapor products, or nicotine solution products, an
19application shall be filed with the department and a permit
20shall be issued for the out-of-state retailer’s principal place
21of business. Cities may issue retail permits to retailers
22with a place of business located within their respective
23limits. County boards of supervisors may issue retail permits
24to retailers with a place of business in their respective
25counties, outside of the corporate limits of cities.
26b. The department may deny the issuance of a permit
27to a distributor, wholesaler, vendor, or retailer who is
28substantially delinquent in the payment of a tax due, or the
29interest or penalty on the tax, administered by the department
30at the time of application. If the applicant is a partnership,
31a permit may be denied if a partner is substantially delinquent
32on any delinquent tax, penalty or interest. If the applicant
33is a corporation, a permit may be denied if any officer having
34a substantial legal or equitable interest in the ownership of
35the corporation owes any delinquent tax, interest, or penalty
-14-1of the applicant corporation.
2c. The department, or a city or county, shall submit
3a duplicate of any application for a retail permit to the
4alcoholic beverages division of the department of commerce
5within thirty days of the issuance. The alcoholic beverages
6division of the department of commerce shall submit the current
7list of all retail permits issued to the Iowa department of
8public health and human services by the last day of each
9quarter of a state fiscal year.
103. Fees — expiration.
11a. All permits provided for in this subchapter shall expire
12on June 30 of each year. A permit shall not be granted or
13issued until the applicant has paid for the period ending June
1430 next, to the department or the city or county granting the
15permit, the fees provided for in this subchapter. The annual
16state permit fee for a distributor, cigarette vendor, and
17 wholesaler, or vendor is one hundred dollars when the permit
18is granted during the months of July, August, or September.
19However, whenever a state permit holder operates more than one
20place of business, a duplicate state permit shall be issued for
21each additional place of business on payment of five dollars
22for each duplicate state permit, but refunds as provided in
23this subchapter do not apply to any duplicate permit issued.
24b. The fee for retail permits is as follows when the permit
25is granted during the months of July, August, or September:
26(1) In places outside any city, fifty dollars.
27(2) In cities of less than fifteen thousand population,
28seventy-five dollars.
29(3) In cities of fifteen thousand or more population, one
30hundred dollars.
31c. If any permit is granted during the months of October,
32November, or December, the fee shall be three-fourths of
33the above maximum schedule; if granted during the months of
34January, February, or March, one-half of the maximum schedule,
35and if granted during the months of April, May, or June,
-15-1one-fourth of the maximum schedule.
24. Refunds.
3a. An unrevoked permit for which the holder has paid the
4full annual fee may be surrendered during the first nine months
5of said the year to the officer issuing it, and the department,
6 or the city or county granting the permit shall make refunds to
7the holder as follows:
8(1) Three-fourths of the annual fee if the surrender is made
9during July, August, or September.
10(2) One-half of the annual fee if the surrender is made
11during October, November, or December.
12(3) One-fourth of the annual fee if the surrender is made
13during January, February, or March.
14b. An unrevoked permit for which the holder has paid
15three-fourths of a full annual fee may be so surrendered during
16the first six months of the period covered by said the payment
17and the department, city, or county shall make refunds to the
18holder as follows:
19(1) A sum equal to one-half of an annual fee if the
20surrender is made during October, November, or December.
21(2) A sum equal to one-fourth of an annual fee if the
22surrender is made during January, February, or March.
23c. An unrevoked permit for which the holder has paid
24one-half of a full annual fee may be surrendered during the
25first three months of the period covered by that payment, and
26the department, city, or county shall refund to the holder a
27sum equal to one-fourth of an annual fee.
285. Application — bond. Permits shall be issued only upon
29applications accompanied by the fee indicated above, and by an
30adequate bond as provided in section 453A.14, and upon forms
31furnished by the department upon written request. The failure
32to furnish such the forms shall not be no an excuse for the
33 failure to file the forms unless absolute refusal is shown.
34The forms shall set forth specify all of the following:
35a. The manner under which the distributor, wholesaler,
-16- 1vendor, or retailer, transacts or intends to transact such
2business as a distributor, wholesaler, vendor, or retailer.
3b. The principal office, residence, and place of business
4where the permit is to apply.
5c. If the applicant is not an individual, the principal
6officers or members and their addresses.
7d. Any other information as the director shall by rules
8 prescribe by rule.
96. No sales without permit. A distributor, wholesaler,
10cigarette vendor, or retailer shall not sell any cigarettes,
11alternative nicotine products, or vapor products, or nicotine
12solution products until such application has been filed and
13the fee prescribed paid for a permit and until such permit is
14obtained and only while such permit is unrevoked and unexpired.
157. Number of permits — trucks. An application shall be
16filed and a permit obtained for each place of business owned or
17operated by a distributor, wholesaler, or retailer, excepting
18 except that no a permit need not be obtained for a delivery or
19sales truck of a distributor or wholesaler holding a permit,
20provided that the director may by regulation require that said
21 the truck bear the distributor’s or wholesaler’s name, and that
22the permit number of the place of business for and from which
23it the truck operates be conspicuously displayed on the outside
24of the body of the truck, immediately under the name.
258. Group business. Any person who operates both as a
26distributor and wholesaler in the same place of business shall
27only be required to obtain a state permit for the particular
28place of business where such operation of said the business
29is conducted. A separate retail permit, however, shall be
30required if any distributor or wholesaler sells cigarettes at
31both retail and wholesale.
329. Permit — form and contents. Each permit issued shall
33describe clearly the place of business for which it the permit
34 is issued, shall be nonassignable, consecutively numbered,
35designating the kind of permit, and shall authorize the sale of
-17-1cigarettes, alternative nicotine products, or vapor products,
2or nicotine solution products in this state subject to the
3limitations and restrictions herein contained specified under
4this chapter. The retail permits shall be upon forms furnished
5by the department or on forms made available or approved by the
6department.
710. Permit displayed. The permit shall, at all times, be
8publicly displayed by the distributor, wholesaler, vendor, or
9retailer at the place of business so as to be easily seen by
10the public and the persons authorized to inspect the place
11of business. The proprietor or keeper of any building or
12place where cigarettes, alternative nicotine products, vapor
13products, nicotine solution products, tobacco, or tobacco
14products are kept for sale, or with intent to sell, shall upon
15request of any agent of the department or any peace officer
16exhibit the permit. A refusal or failure to exhibit the permit
17is prima facie evidence that the cigarettes, alternative
18nicotine products, vapor products, nicotine solution products,
19 tobacco, or tobacco products are kept for sale or with intent
20to sell in violation of this subchapter.
21 Sec. 19. Section 453A.15, subsections 4, 5, and 6, Code
222023, are amended to read as follows:
234. Every permit holder or other person shall, when requested
24by the department, make additional reports as the department
25deems necessary and proper and shall at the request of the
26department furnish full and complete information pertaining to
27any transaction of the permit holder or other person involving
28the purchase or sale or use of cigarettes or purchase of
29cigarette stamps.
305. Every person engaged in the business of selling
31cigarettes in interstate commerce only, who has, by furnishing
32the bond required in section 453A.14, been permitted to set
33aside or store cigarettes in this state for the conduct of
34such interstate business without the stamps affixed thereto
35 to the cigarettes, shall be required to keep such records and
-18-1make such reports to the department as are required by the
2department.
36. If any distributor, manufacturer, or other person
4fails or refuses to pay any tax, penalties, or cost of an
5 audit hereinafter provided, and it becomes necessary to bring
6suit or to intervene in any manner for the establishment or
7collection of said the claims, in any judicial proceedings, any
8report filed in the office of the director by the distributor,
9manufacturer, or other person, or the distributor’s,
10manufacturer’s, or other person’s representative, or a
11copy thereof of the report, certified to by the director,
12showing the number of cigarettes sold by the distributor,
13the distributor’s representative, the manufacturer, or the
14other person, upon which a tax, penalty, or cost of audit
15has not been paid, or any audit made by the department from
16the books or records of the distributor, manufacturer, or
17other person when signed and sworn to by the agent of the
18department making the audit as being made from the books or
19 records of the distributor, manufacturer, or other person from
20or to whom the distributor, manufacturer, or other person
21has bought, received, or delivered cigarettes, whether from
22a transportation company or otherwise, such report or audit
23shall be admissible in evidence in such proceedings and shall
24be prima facie evidence of the contents thereof. However, the
25incorrectness of the report or audit may be shown.
26 Sec. 20. Section 453A.17, Code 2023, is amended to read as
27follows:
28453A.17 Distributing agent’s permit.
291. Every distributing agent in the state, now engaged,
30or who desires to become engaged, in the business of storing
31unstamped cigarettes which are received in interstate commerce
32for distribution or delivery only upon order received from
33without the state or to be sold outside the state, shall
34file with the department, an application with the department
35 for a distributing agent’s permit, on a form prescribed by
-19-1the director, to be and furnished by the department upon
2written request. The failure of the department to furnish
3an application shall not be no an excuse for the failure to
4file the same application unless an absolute refusal is shown.
5Said The application form shall set forth specify the name
6under which such the distributing agent transacts or intends to
7transact such business as a distributing agent, the principal
8office and place of business in Iowa to which the permit is
9to apply, and if other than an individual, the principal
10officers or members thereof of the distributing agent and their
11addresses. The director may require any other information in
12said the application. No A distributing agent shall not engage
13in such business until such the application has been filed
14and, a fee in the sum of one hundred dollars has been paid for
15the permit, and until the permit has been obtained. Such The
16 permit shall expire on June 30 following the date of issuance.
17All of the The provisions of the last two paragraphs of section
18453A.14, relative to bonds, are incorporated herein and by
19this reference made applicable to distributing agents. Upon
20failure to furnish adequate bond as required, the permit shall
21be revoked without hearing. An application shall be filed and
22a permit obtained for each place of business owned or operated
23by a distributing agent.
242. Upon receipt of the application, the bond, and the permit
25fee, the department may issue to every distributing agent for
26the place of business designated a nonassignable consecutively
27numbered permit, authorizing the storing, and distribution of
28unstamped cigarettes within this state when the distribution
29is made upon interstate orders only. A distributing agent
30may also transport unstamped cigarettes in the agent’s own
31conveyances to the state boundary for distribution outside the
32state, and any nonresident customer of the distributor may
33purchase and convey unstamped cigarettes to the state line for
34distribution outside the state. The nonresident purchaser
35shall have in possession an invoice evidencing the purchase of
-20-1the unstamped cigarettes, which must be exhibited upon request
2to any peace officer or agent charged with the enforcement of
3this subchapter.
43. Cigarettes set aside for interstate business must be kept
5separate from intrastate stock and those cigarettes not so kept
6separate shall be considered as intrastate stock and subject to
7the same requirements as cigarettes possessed for the purpose
8of a “first sale”.
94. It is unlawful for any distributing agent to sell at
10retail cigarettes from automobiles, trucks, or any similar
11conveyances.
12 Sec. 21. Section 453A.19, Code 2023, is amended to read as
13follows:
14453A.19 Examination of records and premises.
151. For the purpose of enabling the department to determine
16the tax liability of permit holders or any other person dealing
17in cigarettes or to determine whether a tax liability has been
18incurred, the department shall have the right to inspect any
19premises of the holder of an Iowa permit located within or
20without the state of Iowa where cigarettes are manufactured,
21produced, made, stored, transported, sold, or offered for sale
22or exchange, and to examine all of the records required to be
23kept or any other records that may be kept incident to the
24conduct of the cigarette business of said the permit holder or
25any other person dealing in cigarettes.
262. The said authorized officers shall also have the right,
27 as an incident to determining the said tax liability, or
28whether a tax liability has been incurred, to examine all
29stocks of cigarettes and cigarette stamps and for the foregoing
30purpose said authorized officers shall also have the right to
31remain upon said the premises for such length of time as may be
32 necessary to fully determine said the tax liability, or whether
33a tax liability has been incurred.
343. It shall be unlawful for any of the foregoing permit
35holders to fail to produce upon demand of the department any
-21-1records required herein to be kept or to hinder or prevent
2in any manner the inspection of said the records or the
3examination of said the premises.
44. In the case of any departmental inspection conducted
5under this section requiring department personnel to travel
6outside the state of Iowa, any additional costs incurred by the
7department for out-of-state travel expenses shall be borne by
8the permittee. These additional costs shall be those costs in
9excess of the costs of a similar inspection conducted at the
10geographical point located within the state of Iowa nearest to
11the out-of-state inspection point. In lieu of conducting an on
12premises out-of-state inspection, the department shall have the
13authority to may direct the permittee to assemble and transport
14all records described in subsection 1, to the nearest practical
15and convenient geographical location in Iowa for inspection by
16the department.
17 Sec. 22. Section 453A.21, Code 2023, is amended to read as
18follows:
19453A.21 Cigarettes retailer may not sell.
20Unless a retail permit holder shall also hold holds a state
21permit, it shall be unlawful for a the retailer to sell or have
22in the retailer’s possession cigarettes upon which the stamp
23tax has stamps have not been affixed.
24 Sec. 23. Section 453A.32, subsection 6, Code 2023, is
25amended to read as follows:
266. The provisions of this section applying to cigarettes
27shall also apply to tobacco products and nicotine solution
28products taxed under subchapter II of this chapter.
29 Sec. 24. Section 453A.33, Code 2023, is amended to read as
30follows:
31453A.33 Seizure not to affect criminal prosecution.
32The seizure, forfeiture, and sale of cigarettes, tobacco
33products, nicotine solution products, and other property under
34the terms and conditions set out specified in section 453A.32,
35shall not constitute any defense to the person owning or having
-22-1control or possession of the property from criminal prosecution
2for any act or omission made or offense committed under this
3chapter or from liability to pay penalties provided by this
4chapter.
5 Sec. 25. Section 453A.35, subsection 1, paragraph a, Code
62023, is amended to read as follows:
7a. With the exception of revenues credited to the health
8care trust fund pursuant to paragraph “b” and the revenues
9generated from the tax on nicotine solution products pursuant
10to section 453A.43A, the proceeds derived from the sale of
11stamps and the payment of fees and penalties provided for under
12this chapter, and the permit fees received from all permits
13issued by the department, shall be credited to the general fund
14of the state.
15 Sec. 26. Section 453A.36, subsections 1, 2, 3, 4, 5, 6, and
167, Code 2023, are amended to read as follows:
171. Except as otherwise provided in this subchapter, it is
18unlawful for any person to have in the person’s possession for
19sale, distribution, or use, or for any other purpose, in excess
20of forty cigarettes, or to sell, distribute, use, or present
21as a gift or prize cigarettes upon which a tax is required to
22be paid by this subchapter, without having affixed to each
23individual package of cigarettes, the proper stamp evidencing
24the payment of the tax and the. The absence of the stamp on the
25individual package of cigarettes is notice to all persons that
26the tax has not been paid and is prima facie evidence of the
27nonpayment of the tax.
282. No A person, other than a common carrier and a
29distributor’s truck bearing the distributor’s name and permit
30number in plain view on the outside of such truck, shall not
31 transport within this state cigarettes upon which a tax is
32required to be paid, without having stamps affixed to each
33individual package of said cigarettes; and no. A person shall
34not fail or refuse, upon demand of agent of the department, or
35any peace officer to stop any vehicle transporting cigarettes
-23-1for a full and complete inspection of the cargo carried.
23. No A person shall not use, sell, offer for sale, or
3possess for the purpose of use or sale, within this state, any
4previously used stamp or stamps, or attach any such previously
5used stamps to an individual package of cigarettes, nor shall
6any person purchase stamps from any person other than the
7department or a bank authorized to sell stamps pursuant to
8section 453A.8, or sell stamps purchased from the department or
9a bank authorized to sell stamps pursuant to section 453A.8.
104. No A person shall not knowingly use, consume, or smoke,
11within this state, cigarettes upon which a tax is required to
12be paid, without said the tax having been paid.
135. No A person, unless the person be other than the holder
14of a permit, or the permit holder’s representative, shall
15not solicit the sale of cigarettes, provided that. However,
16 this section subsection shall not prevent solicitation by a
17nonpermit holder for the sale of cigarettes to any state permit
18holder.
196. Any sales of tobacco, tobacco products, alternative
20nicotine products, vapor products, nicotine solution products,
21 or cigarettes made through a cigarette vending machine are
22subject to rules and penalties relative to retail sales of
23tobacco, tobacco products, alternative nicotine products, vapor
24products, nicotine solution products, and cigarettes provided
25for in this chapter. Cigarettes shall not be sold through
26any cigarette a vending machine unless the cigarettes have
27been properly stamped or metered as provided by under this
28subchapter, and in case of violation of this provision, the
29permit of the dealer authorizing retail sales of cigarettes
30shall be revoked. Payment of the permit fee as provided
31in section 453A.13 authorizes a cigarette vendor to sell
32tobacco, tobacco products, alternative nicotine products,
33vapor products, nicotine solution products, and cigarettes
34through vending machines. However, tobacco, tobacco products,
35alternative nicotine products, vapor products, nicotine
-24-1solution products, and cigarettes shall not be sold through
2a vending machine unless the vending machine is located in
3a place where the retailer ensures that no person younger
4than twenty-one years of age is present or permitted to
5enter at any time. Tobacco, tobacco products, alternative
6nicotine products, vapor products, nicotine solution products,
7 and cigarettes shall not be sold through any cigarette a
8 vending machine if such products are placed together with
9any nontobacco product, other than matches, in the cigarette
10 vending machine. This section subsection does not require a
11retail permit holder to buy a cigarette vendor’s permit if the
12retail permit holder is in fact the owner of the cigarette
13 vending machines and the machines are operated in the location
14described in the retail permit.
157. a. It shall be unlawful for a person other than a
16retailer as defined in section 453A.1 or 453A.42 who holds a
17valid retail permit, as applicable, to sell tobacco, tobacco
18products, alternative nicotine products, vapor products,
19nicotine solution products, or cigarettes at retail.
20b. A state permit holder shall not sell or distribute
21cigarettes at wholesale to any person in the state of Iowa
22 who does not hold a permit authorizing the retail sale
23of cigarettes or who does not hold a state permit as a
24manufacturer, distributing agent, wholesaler, or distributor.
25 Sec. 27. Section 453A.36A, subsection 1, Code 2023, is
26amended to read as follows:
271. Except as provided in section 453A.36, subsection 6,
28a retailer shall not sell or offer for sale tobacco, tobacco
29products, alternative nicotine products, vapor products,
30nicotine solution products, or cigarettes through the use of
31a self-service display.
32 Sec. 28. Section 453A.39, Code 2023, is amended to read as
33follows:
34453A.39 Tobacco, tobacco products, alternative nicotine
35products, vapor products, nicotine solution products, and
-25-1cigarette samples — restrictions — administration.
21. A manufacturer, distributor, wholesaler, retailer, or
3distributing agent, or agent thereof, shall not give away
4cigarettes or tobacco products at any time in connection with
5the manufacturer’s, distributor’s, wholesaler’s, retailer’s, or
6distributing agent’s business or for promotion of the business
7or product, except as provided in subsection 2.
82. a. All cigarette samples shall be shipped only to a
9distributor that has a permit to stamp cigarettes or little
10cigars with Iowa tax. All cigarette samples must have a
11cigarette stamp. The manufacturer shipping samples under this
12section shall send an affidavit to the director stating the
13shipment information, including the date shipped, quantity, and
14to whom the samples were shipped. The distributor receiving
15the shipment shall send an affidavit to the director stating
16the shipment information, including the date shipped, quantity,
17and from whom the samples were shipped. These affidavits shall
18be duly notarized and submitted to the director at the time of
19shipment and receipt of the samples. The distributor shall
20pay the tax on samples by separate remittance along with the
21affidavit.
22b. A manufacturer, distributor, wholesaler, retailer, or
23distributing agent or agent thereof shall not give away any
24tobacco, tobacco products, alternative nicotine products, vapor
25products, nicotine solution products, or cigarettes to any
26person under twenty-one years of age, or within five hundred
27feet of any playground, school, high school, or other facility
28when such facility is being used primarily by persons under age
29twenty-one for recreational, educational, or other purposes.
30c. Proof of age shall be required if a reasonable person
31could conclude on the basis of outward appearance that a
32prospective recipient of a sample may be under twenty-one years
33of age.
34 Sec. 29. Section 453A.40, subsections 1 and 3, Code 2023,
35are amended to read as follows:
-26- 11. All persons required to obtain a permit or to be licensed
2under section 453A.13 or section 453A.44 having in their
3possession and held for resale on the effective date of an
4increase in the tax rate cigarettes, little cigars, or tobacco
5products, or nicotine solution products upon which the tax
6under section 453A.6, or 453A.43, or 453A.43A has been paid,
7unused cigarette tax stamps which have been paid for under
8section 453A.8, unused metered imprints which have been paid
9for under section 453A.12, or tobacco products or nicotine
10solution products for which the tax has not been paid under
11section 453A.46 shall be subject to an inventory tax on the
12items as provided in this section.
133. The rate of the inventory tax on each item subject to
14the tax as specified in subsection 1 is equal to the difference
15between the amount paid on each item under section 453A.6,
16453A.8, 453A.12, or 453A.43, or 453A.43A prior to the tax
17increase and the amount that is to be paid on each similar item
18under section 453A.6, 453A.8, 453A.12, or 453A.43, or 453A.43A
19 after the tax increase except that in computing the rate of the
20inventory tax any discount allowed or allowable under section
21453A.8 shall not be considered.
22 Sec. 30. Section 453A.42, Code 2023, is amended to read as
23follows:
24453A.42 Definitions.
25When used in this subchapter, unless the context clearly
26indicates otherwise, the following terms shall have the
27meanings, respectively, ascribed to them in this section:
281. “Alternative nicotine product” means the same as defined
29in section 453A.1.
301. 2. “Business” means any trade, occupation, activity,
31or enterprise engaged in for the purpose of selling or
32distributing tobacco products or nicotine solution products in
33this state.
342. 3. “Consumer” means any person who has title to or
35possession of tobacco products or nicotine solution products in
-27-1storage, for use or other consumption in this state.
23. 4. “Delivery sale” means any sale of an alternative
3nicotine product or a vapor product to a purchaser in this
4state where the purchaser submits the order for such sale by
5means of a telephonic or other method of voice transmission,
6mail or any other delivery service, or the internet or other
7online service and the alternative nicotine product or vapor
8product is delivered by use of mail or a delivery service. The
9sale of an alternative nicotine product or vapor product shall
10constitute a delivery sale regardless of whether the seller
11is located in this state. “Delivery sale” does not include a
12sale to a distributor or retailer of any alternative nicotine
13product or vapor product not for personal consumption the same
14as defined in section 453A.1.
154. 5. “Director” means the director of the department of
16revenue.
175. 6. “Distributor” means any and each of the following:
18a. Any person engaged in the business of selling tobacco
19products or nicotine solution products in this state who
20brings, or causes to be brought, into this state from without
21the state any tobacco products or nicotine solution products
22 for sale;.
23b. Any person who makes, manufactures, or fabricates tobacco
24products or nicotine solution products in this state for sale
25in this state;.
26c. Any person engaged in the business of selling tobacco
27products or nicotine solution products without this state who
28ships or transports tobacco products or nicotine solution
29products to retailers in this state, to be sold by those
30retailers.
316. 7. “Little cigar” means any roll for smoking which meets
32all of the following conditions:
33a. Is made wholly or in part of tobacco, irrespective of
34size or shape and irrespective of the tobacco being flavored,
35adulterated, or mixed with any other ingredient;.
-28- 1b. Is not a cigarette as defined in section 453A.1,
2subsection 4; and.
3c. Either weighs not more than three pounds per thousand,
4irrespective of retail price, or weighs more than three pounds
5per thousand and has a retail price of not more than two
6and one-half cents per little cigar. For purposes of this
7subsection, the retail price is the ordinary retail price in
8this state, not including retail sales tax, use tax, or the tax
9on little cigars imposed by section 453A.43.
107. 8. “Manufacturer” means a person who manufactures and
11sells tobacco products or nicotine solution products.
129. “Nicotine solution product” means the same as defined in
13section 453A.1.
148. 10. “Person” means any individual, firm, association,
15partnership, joint stock company, joint adventure, corporation,
16trustee, agency, or receiver, or any legal representative of
17any of the foregoing the same as defined in section 453A.1.
189. 11. “Place of business” means any place where
19tobacco products or nicotine solution products are sold or
20where tobacco products or nicotine solution products are
21manufactured, stored, or kept for the purpose of sale or
22consumption, including any vessel, vehicle, airplane, train, or
23vending machine; or and for a business within or without the
24state that conducts delivery sales, any place where alternative
25nicotine products, or vapor products, or nicotine solution
26products are sold or where alternative nicotine products, or
27 vapor products, or nicotine solution products are kept for the
28purpose of sale, including delivery sales.
2910. 12. “Retail outlet” means each place of business from
30which tobacco products are sold to consumers.
3111. 13. “Retailer” means any person engaged in the business
32of selling tobacco, tobacco products, alternative nicotine
33products, or vapor products, or nicotine solution products to
34ultimate consumers.
3512. 14. “Sale” means any transfer, exchange, or barter,
-29-1in any manner or by any means whatsoever, for a consideration,
2and includes and means all sales made by any person. It
3 “Sale” includes a gift by a person engaged in the business
4of selling tobacco products or nicotine solution products,
5for advertising, as a means of evading the provisions of this
6subchapter, or for any other purposes whatsoever.
713. 15. “Snuff” means any finely cut, ground, or powdered
8tobacco that is not intended to be smoked.
914. 16. “Storage” means any keeping or retention of tobacco
10products or nicotine solution products for use or consumption
11in this state.
1215. 17. “Subjobber” means any person, other than a
13manufacturer or distributor, who buys tobacco products or
14nicotine solution products from a distributor and sells them to
15persons other than the ultimate consumers.
1616. 18. “Tobacco products” means cigars; little cigars
17as defined herein; cheroots; stogies; periques; granulated,
18plug cut, crimp cut, ready rubbed, and other smoking tobacco;
19snuff; cavendish; plug and twist tobacco; fine-cut and other
20chewing tobaccos; shorts; refuse scraps, clippings, cuttings
21and sweepings of tobacco, and other kinds and forms of tobacco,
22prepared in such manner as to be suitable for chewing or
23smoking in a pipe or otherwise, or both for chewing and
24smoking; but shall not include cigarettes as defined in section
25453A.1, subsection 4 the same as defined in section 453A.1.
2617. 19. “Use” means the exercise of any right or power
27incidental to the ownership of tobacco products or nicotine
28solution products.
2920. “Vapor product” means the same as defined in section
30453A.1.
3118. 21. “Wholesale sales price” means the established price
32for which a manufacturer sells a tobacco product or a nicotine
33solution product to a distributor, exclusive of any discount
34or other reduction.
35 Sec. 31. Section 453A.43, subsection 1, paragraphs a and b,
-30-1Code 2023, are amended to read as follows:
2a. A tax is imposed upon all tobacco products in this state
3and upon any person engaged in business as a distributor of
4tobacco products, at the rate of twenty-two percent of the
5wholesale sales price of the tobacco products, except little
6cigars and snuff as defined in section 453A.42.
7b. In addition to the tax imposed under paragraph “a”, a
8tax is imposed upon all tobacco products in this state and upon
9any person engaged in business as a distributor of tobacco
10products, at the rate of twenty-eight percent of the wholesale
11sales price of the tobacco products, except little cigars and
12snuff as defined in section 453A.42.
13 Sec. 32. NEW SECTION. 453A.43A Tax on nicotine solution
14products.
151. A tax is imposed upon all nicotine solution products
16in this state and upon any person engaged in business as a
17distributor of nicotine solution products, at the rate of
18twenty-six percent of the wholesale sales price of the nicotine
19solution products.
202. The taxes on nicotine solution products shall be imposed
21at the time the distributor does any of the following:
22a. Brings, or causes to be brought, into this state from
23outside the state nicotine solution products for sale.
24b. Makes, manufactures, or fabricates nicotine solution
25products in this state for sale in this state.
26c. Ships or transports nicotine solution products to
27retailers in this state, to be sold by those retailers.
283. a. A tax is imposed upon the use or storage by consumers
29of nicotine solution products in this state, and upon the
30consumers, at the rate of twenty-six percent of the cost of the
31nicotine solution products.
32b. The taxes imposed by this subsection shall not apply
33if the taxes imposed by subsection 1 on the nicotine solution
34products have been paid.
354. Any nicotine solution product with respect to which a
-31-1tax has once been imposed under this subchapter shall not again
2be subject to tax under this subchapter, except as provided in
3section 453A.40.
45. The tax imposed by this section shall not apply with
5respect to any nicotine solution product which under the
6Constitution and laws of the United States may not be made the
7subject of taxation by this state.
86. The tax imposed by this section shall be in addition to
9all other occupation or privilege taxes or license fees now or
10hereafter imposed by any city or county.
117. All excise taxes imposed on nicotine solution products
12and collected under this chapter by a distributor or any
13individual are deemed to be held in trust for the state of
14Iowa.
15 Sec. 33. NEW SECTION. 453A.43B Health promotion trust fund
16— nicotine solution products revenue — use of moneys.
171. A health promotion trust fund is created in the
18office of the treasurer of state. The fund consists of the
19revenues generated from the tax on nicotine solution products
20pursuant to section 453A.43A that are credited to the health
21promotion trust fund, annually. Moneys in the fund shall be
22separate from the general fund of the state and shall not be
23considered part of the general fund of the state. However, the
24fund shall be considered a special account for the purposes
25of section 8.53 relating to generally accepted accounting
26principles. Moneys in the fund shall be used only as specified
27in this section and shall be appropriated only for the uses
28specified. Moneys in the fund are not subject to section 8.33
29and shall not be transferred, used, obligated, appropriated,
30or otherwise encumbered, except as provided in this section.
31Notwithstanding section 12C.7, subsection 2, interest or
32earnings on moneys deposited in the fund shall be credited to
33the fund.
342. The revenue generated from the tax on nicotine solution
35products pursuant to section 453A.43A shall be credited to
-32-1the health promotion trust fund created in this section on an
2annual basis.
33. Of the revenues generated and credited to the fund on an
4annual basis, ten percent of the total amount is appropriated
5annually to the department of health and human services for
6tobacco use prevention and control efforts pursuant to chapter
7142A and ninety percent of the total amount is appropriated
8annually to the judicial branch to be used to create and
9maintain civil and criminal specialty courts involving
10individuals with substance use disorder or mental health
11issues.
12 Sec. 34. Section 453A.44, Code 2023, is amended to read as
13follows:
14453A.44 Licenses — distributors, and subjobbers.
151. No A person shall not engage in the business of a
16distributor or subjobber of tobacco products or nicotine
17solution products at any place of business without first having
18received a license from the director to engage in that business
19 as a distributor or subjobber at that place of business.
202. Every An application for such a license shall be made on
21a form prescribed by the director and shall state the all of
22the following:
23a. Thename and address of the applicant; if.
24(1) Ifthe applicant is a firm, partnership, or association,
25the name and address of each of its members; if.
26(2) Ifthe applicant is a corporation, the name and address
27of each of its officers; the.
28b. Theaddress of its the applicant’s principal place of
29business; the.
30c. Theplace where the business to be licensed is to be
31conducted; and such.
32d. Suchother information as the director may require for
33the purpose of the administration of this subchapter.
343. A person without this state who ships or transports
35tobacco products or nicotine solution products to retailers
-33-1in this state, to be sold by those retailers, may make
2application apply for a license as a distributor, be granted a
3license by the director, and thereafter be subject to all the
4provisions of this subchapter and entitled to act as a licensed
5distributor.
64. a. Each application for a distributor’s license shall
7be accompanied by a fee of one hundred dollars, except that an
8applicant holding a permit pursuant to subchapter I of this
9chapter shall not be required to pay an additional fee. The
10application shall be accompanied by a corporate surety bond
11issued by a surety licensed to do business in this state, in
12the sum of one thousand dollars, conditioned upon the true and
13faithful compliance by the distributor with all the provisions
14of this subchapter and the payment when due of all taxes,
15penalties, and accrued interest arising in the ordinary course
16of business or by reason of any delinquent money which may be
17due the state of Iowa. This The bond shall be in a form to be
18fixed by the director and approved by the attorney general.
19Whenever it is the opinion of the director that the bond given
20by a licensee is inadequate in amount to fully protect the
21state, the director shall require either an increase in the
22amount of said the bond or an additional bond, in such an
23 amount as the director deems sufficient. Any bond required by
24this subchapter, or a reissue thereof, or a substitute therefor
25 of the bond, shall be kept in full force and effect during the
26entire period covered by the license.
27b. A separate application for a license shall be made for
28each place of business where a distributor proposes to engage
29in business as such a distributor under this subchapter.
305. Each application for a subjobber’s license shall
31be accompanied by a fee of ten dollars, except that no an
32 applicant holding a permit pursuant to subchapter I of this
33chapter shall not be required to pay an additional fee.
346. A distributor or subjobber applying for a license between
35January 1 and June 30 of any year shall be required to pay only
-34-1one-half of the license fee provided for in this section.
27. The director, upon receipt of the application, and
3bond in the case of the distributor, in proper form, and
4payment of the applicable license fee required by subsection
54 or subsection 5 under this section, shall unless otherwise
6provided by this subchapter, issue the applicant a license in
7form as prescribed by the director, which. The license shall
8permit the applicant to whom it is issued to engage in business
9as a distributor or subjobber at the place of business shown in
10the application. The director shall assign a permit number to
11each person licensed as a distributor at the time of issuance
12of the person’s first license, which shall be inscribed upon
13all licenses issued to that distributor.
148. Each license shall expire on June 30 following its
15date of issue unless sooner revoked by the director or unless
16the business with respect to which the license was issued is
17transferred. In either case the holder of the license shall
18immediately surrender it to the director.
199. No A license shall not be transferable to any other
20person.
2110. The director may revoke, cancel, or suspend the license
22or licenses of any distributor or subjobber for violation of
23any of the provisions of this subchapter, or any other act
24applicable to the sale of tobacco products or nicotine solution
25products, or any rule or regulations promulgated by the
26director in furtherance of this subchapter. No A license shall
27not be revoked, canceled, or suspended except after notice and
28a hearing by the director as provided in section 453A.48.
2911. No A license shall not be issued under this
30subchapter to any person within one year of the date of final
31determination of a revocation of any previous license held by
32the person.
3312. When the surety upon any bond issued pursuant to the
34provisions of this subchapter shall have has fulfilled the
35conditions of such the bond and compensated the state for any
-35-1loss occasioned by any act or omission of the person bonded
2under this subchapter, such the surety shall be subrogated to
3all the rights of the state in connection with the transaction
4wherein such that resulted in the loss occurred.
5 Sec. 35. Section 453A.45, Code 2023, is amended to read as
6follows:
7453A.45 Licensees, duties.
81. a. Every distributor shall keep at each licensed place
9of business complete and accurate records for that place of
10business, including itemized invoices, of tobacco products
11or nicotine solution products held, purchased, manufactured,
12brought in or caused to be brought in from without the state,
13or shipped or transported to retailers in this state, and of
14all sales of tobacco products or nicotine solution products
15 made, except sales to the ultimate consumer.
16b. When a licensed distributor sells tobacco products
17or nicotine solution products exclusively to the ultimate
18consumer at the address given in the license, an invoice of
19those sales is not required, but itemized invoices shall be
20made of all tobacco products or nicotine solution products
21 transferred to other retail outlets owned or controlled by that
22licensed distributor. All books, records, and other papers
23and documents required by this subsection to be kept shall
24be preserved for a period of at least three years after the
25date of the documents or the date of the entries appearing
26in the records, unless the director, in writing, authorized
27their destruction or disposal at an earlier date. At any time
28during usual business hours, the director, or the director’s
29duly authorized agents or employees, may enter any place of
30business of a distributor, without a search warrant, and
31inspect the premises, the records required to be kept under
32this subsection, and the tobacco products or nicotine solution
33products contained therein at the place of business, to
34determine if all the provisions of full compliance with this
35subchapter are being fully complied with. If the director,
-36-1or any such agent or employee of the director, is denied
2free access or is hindered or interfered with in making the
3examination, the license of the distributor at that premises is
4subject to revocation by the director.
52. Every person who sells tobacco products or nicotine
6solution products to persons other than the ultimate consumer
7shall render with each sale itemized invoices showing the
8seller’s name and address, the purchaser’s name and address,
9the date of sale, and all prices and discounts. The person
10shall preserve legible copies of all these invoices for three
11years from the date of sale.
123. Every retailer and subjobber shall procure itemized
13invoices of all tobacco products or nicotine solution products
14 purchased. The invoices shall show the name and address of the
15seller and the date of purchase. The retailer and subjobber
16shall preserve a legible copy of each invoice for three
17years from the date of purchase. Invoices shall be available
18for inspection by the director or the director’s authorized
19agents or employees at the retailer’s or subjobber’s place of
20business.
214. Records of all deliveries or shipments of tobacco
22products or nicotine solution products from any public
23warehouse of first destination in this state which is subject
24to the provisions of and licensed under chapter 554 shall be
25kept by the warehouse and be available to the director for
26inspection. They The records shall show the name and address
27of the consignee, the date, the quantity of tobacco products
28or nicotine solution products delivered, and such other
29information as the commissioner director may require. These
30 The records shall be preserved for three years from the date of
31delivery of the tobacco products or nicotine solution products.
325. a. The transportation of tobacco products or nicotine
33solution products into this state by means other than common
34carrier must shall be reported to the director within thirty
35days with the following exceptions:
-37- 1(1) The transportation of not more than fifty cigars, not
2more than ten ounces of snuff or snuff powder, or not more
3than one pound of smoking or chewing tobacco or other tobacco
4products not specifically mentioned herein; specified in this
5subparagraph.
6(2) Transportation by a person with a place of business
7outside the state, who is licensed as a distributor under
8section 453A.44, or tobacco products or nicotine solution
9products sold by such person to a retailer in this state.
10b. The report shall be made on forms provided by the
11director. The director may require by rule that the report be
12filed by electronic transmission.
13c. Common carriers transporting tobacco products or nicotine
14solution products into this state shall file with the director
15reports of all such shipments other than those which are
16delivered to public warehouses of first destination in this
17state which are licensed under the provisions of chapter 554.
18Such The reports shall be filed on or before the tenth day of
19each month and shall show with respect to deliveries made in
20the preceding month all of the following:
21(1) The date.
22(2) The point of origin.
23(3) The point of delivery.
24(4) The name of the consignee.
25(5) A description and the quantity of tobacco products or
26nicotine solution products delivered.
27(6) Such other information as the director may require.
28d. Any person who fails or refuses to transmit to the
29director the required reports or whoever who refuses to permit
30the examination of the records by the director shall be guilty
31of a serious misdemeanor.
32 Sec. 36. Section 453A.46, Code 2023, is amended to read as
33follows:
34453A.46 Distributors, — monthly returns, — interest, and
35 penalties.
-38- 11. a. On or before the twentieth day of each calendar
2month every distributor with a place of business in this state
3shall file a return with the director showing for the preceding
4calendar month the quantity and wholesale sales price of each
5tobacco product or nicotine solution product brought, or caused
6to be brought, into this state for sale; or made, manufactured,
7or fabricated in this state for sale in this state;, and any
8other information the director may require. Every licensed
9distributor outside this state shall in like manner file a
10return with the director showing for the preceding calendar
11month the quantity and wholesale sales price of each tobacco
12product or nicotine solution product shipped or transported
13to retailers in this state to be sold by those retailers and
14any other information the director may require. Returns shall
15be made upon forms furnished or made available in electronic
16form and prescribed by the director and shall contain other
17information as the director may require. Each return shall be
18accompanied by a remittance for the full tax liability shown
19on the return, less a discount as fixed by the director not to
20exceed five percent of the tax. Within three years after the
21return is filed or within three years after the return became
22due, whichever is later, the department shall examine it the
23return, determine the correct amount of tax, and assess the
24tax against the taxpayer for any deficiency. The period for
25examination and determination of the correct amount of tax is
26unlimited in the case of a false or fraudulent return made with
27the intent to evade tax, or in the case of a failure to file a
28return.
29b. The three-year limitation period may be extended by a
30taxpayer by signing a waiver agreement form provided by the
31department. The agreement must shall stipulate the extension
32period and the tax period to which the extension applies. The
33agreement must shall also stipulate that a claim for refund
34may be filed by the taxpayer at any time during the extension
35period.
-39- 12. a. All taxes shall be due and payable not later than
2the twentieth day of the month following the calendar month in
3which they the taxes were incurred, and shall bear interest at
4the rate in effect under section 421.7 counting each fraction
5of a month as an entire month, computed from the date the tax
6was due.
7b. The director may reduce or abate interest when in
8the director’s opinion the facts warrant the reduction or
9abatement. The exercise of this power shall be subject to the
10approval of the attorney general.
113. In addition to the tax or additional tax, the taxpayer
12shall also pay a penalty as provided in section 421.27 and
13shall be subject to the civil penalties set forth specified
14 in sections 421.27; 453A.31, subsection 1, paragraph “b”; and
15453A.50, subsection 3, as applicable.
164. The department shall notify any person assessed
17pursuant to this section by sending a written notice of the
18determination by mail to the principal place of business of the
19person as shown on the person’s application for permit, and if
20an application was not filed by the person, to the person’s
21last known address. A determination by the department of
22the amount of tax, penalty, and interest due, or the amount
23of refund for excess tax paid, is final, unless the person
24aggrieved by the determination appeals to the director for a
25revision of the determination within sixty days from the date
26of the notice of determination of tax, penalty, and interest or
27refund owing or unless the taxpayer contests the determination
28by paying the tax, interest, and penalty and timely filing a
29claim for a refund. The director shall grant a hearing and
30upon the hearing, the director shall determine the correct tax,
31penalty, and interest or refund due and notify the appellant
32of the decision by mail. Judicial review of action of the
33director may be sought in accordance with chapter 17A and
34section 422.29.
355. The director may recover the amount of any tax due and
-40-1unpaid, interest, and any penalty in a civil action. The
2collection of such a tax, interest, or penalty shall not be a
3bar to any prosecution under this subchapter.
46. On or before the twentieth day of each calendar month,
5every consumer who, during the preceding calendar month, has
6acquired title to or possession of tobacco products or nicotine
7solution products for use or storage in this state, upon which
8tobacco products or nicotine solution products the tax imposed
9by section 453A.43 or section 453A.43A has not been paid, shall
10file a return with the director showing the quantity of tobacco
11products so or nicotine solution products acquired. The return
12shall be made upon a form furnished and prescribed by the
13director, and shall contain other information as the director
14may require. The return shall be accompanied by a remittance
15for the full unpaid tax liability shown by it the return.
16Within three years after the return is filed or within three
17years after the return became due, whichever is later, the
18department shall examine it the return, determine the correct
19amount of tax, and assess the tax against the taxpayer for any
20deficiency. The period for examination and determination of
21the correct amount of tax is unlimited in the case of a false or
22fraudulent return made with the intent to evade tax, or in the
23case of a failure to file a return.
247. The director may require by rule that returns be filed by
25electronic transmission.
26 Sec. 37. Section 453A.47, Code 2023, is amended to read as
27follows:
28453A.47 Refunds, and credits.
29Where tobacco products or nicotine solution products upon
30which the tax imposed by this subchapter has been reported and
31paid are shipped or transported by the distributor to consumers
32to be consumed without the state or to retailers or subjobbers
33without the state to be sold by those retailers or subjobbers
34without the state or are returned to the manufacturer by the
35distributor or destroyed by the distributor, refund of such the
-41-1 tax or credit may be made to the distributor in accordance with
2regulations prescribed by the director. Any overpayment of the
3tax imposed under section 453A.43 or section 453A.43A may be
4made to the taxpayer in accordance with regulations prescribed
5by the director. The director shall cause any such refund of
6a tax to be paid out of the general fund of the state, and so
7much of said the general fund as may be necessary is hereby
8 appropriated for that purpose.
9 Sec. 38. Section 453A.47A, Code 2023, is amended to read as
10follows:
11453A.47A Retailers — permits — fees — penalties.
121. Permits required. A person shall not engage in
13the business of a retailer of tobacco, tobacco products,
14alternative nicotine products, or vapor products, or nicotine
15solution products at any place of business, or through delivery
16sales, without first having received a permit as a retailer.
172. No sales without permit. A retailer shall not sell
18any tobacco, tobacco products, alternative nicotine products,
19or vapor products, or nicotine solution products until
20an application has been filed, and the fee prescribed for
21the permit paid, for a permit and until such the permit is
22 obtained, and only while such the permit is not suspended,
23unrevoked, or unexpired.
243. Number of permits. An application shall be filed and a
25permit obtained for each place of business owned or operated by
26a retailer located in the state. If an out-of-state retailer
27makes delivery sales of alternative nicotine products, or vapor
28products, or nicotine solution products, an application shall
29be filed with the department and a permit shall be issued for
30the out-of-state retailer’s principal place of business.
314. Retailer — multiple permits not required — effect of
32suspension. A retailer, as defined in section 453A.1, who holds
33a permit under subchapter I of this chapter is not required to
34also obtain a retail permit under this subchapter. However,
35if a retailer, as defined in section 453A.1, only holds a
-42-1permit under subchapter I of this chapter and that permit is
2suspended, revoked, or expired, the retailer shall not sell any
3tobacco, tobacco products, alternative nicotine products, or
4 vapor products, or nicotine solution products during the time
5which the permit is suspended, revoked, or expired.
65. Separate permit. A separate retail permit shall be
7required of a distributor or subjobber if the distributor or
8subjobber sells tobacco, tobacco products, alternative nicotine
9products, or vapor products, or nicotine solution products at
10retail.
116. Issuance. Cities may issue retail permits to retailers
12located within their respective limits. County boards of
13supervisors may issue retail permits to retailers located in
14their respective counties, outside of the corporate limits of
15cities. The city or county shall submit a duplicate of any
16application for a retail permit to the alcoholic beverages
17division of the department of commerce within thirty days of
18issuance of a permit. The alcoholic beverages division of the
19department of commerce shall submit the current list of all
20retail permits issued to the Iowa department of public health
21and human services by the last day of each quarter of a state
22fiscal year.
237. Fees — expiration.
24a. All permits provided for in this subchapter shall expire
25on June 30 of each year. A permit shall not be granted or
26issued until the applicant has paid the fees provided for in
27this section for the period ending June 30 next, to the city or
28county granting the permit. The fee for retail permits is as
29follows when the permit is granted during the month of July,
30August, or September:
31(1) In places outside any city, fifty dollars.
32(2) In cities of less than fifteen thousand population,
33seventy-five dollars.
34(3) In cities of fifteen thousand or more population, one
35hundred dollars.
-43- 1b. If any permit is granted during the month of October,
2November, or December, the fee shall be three-fourths of the
3above maximum schedule; if granted during the month of January,
4February, or March, one-half of the maximum schedule; and if
5granted during the month of April, May, or June, one-fourth of
6the maximum schedule.
78. Refunds.
8a. An unrevoked permit for which the retailer paid the full
9annual fee may be surrendered during the first nine months of
10the year to the officer issuing it, and the city or county
11granting the permit shall make refunds to the retailer as
12follows:
13(1) Three-fourths of the annual fee if the surrender is made
14during July, August, or September.
15(2) One-half of the annual fee if the surrender is made
16during October, November, or December.
17(3) One-fourth of the annual fee if the surrender is made
18during January, February, or March.
19b. An unrevoked permit for which the retailer has paid
20three-fourths of a full annual fee may be surrendered during
21the first six months of the period covered by the payment,
22and the city or county shall make refunds to the retailer as
23follows:
24(1) A sum equal to one-half of an annual fee if the
25surrender is made during October, November, or December.
26(2) A sum equal to one-fourth of an annual fee if the
27surrender is made during January, February, or March.
28c. An unrevoked permit for which the retailer has paid
29one-half of a full annual fee may be surrendered during the
30first three months of the period covered by the payment, and
31the city or county shall refund to the retailer a sum equal to
32one-fourth of an annual fee.
339. Application. Retail permits shall be issued only upon
34applications, accompanied by the fee indicated above under
35this section, made upon forms furnished by the department upon
-44-1written request. The failure to furnish such the forms shall
2not be no an excuse for the failure to file the form unless
3absolute refusal is shown. The forms shall specify:
4a. The manner under which the retailer transacts or intends
5to transact business as a retailer.
6b. The principal office, residence, and place of business,
7for which the permit is to apply applies.
8c. If the applicant is not an individual, the principal
9officers or members of the applicant, not to exceed three, and
10their addresses.
11d. Such other information as the director shall by rules
12prescribe prescribes by rule.
1310. Records and reports of retailers.
14a. The director shall prescribe the forms necessary for
15the efficient administration of this section and may require
16uniform books and records to be used and kept by each retailer
17or other person as deemed necessary.
18b. Every retailer shall, when requested by the department,
19make additional reports as the department deems necessary and
20proper and shall at the request of the department furnish full
21and complete information pertaining to any transaction of the
22retailer involving the purchase or sale or use of tobacco,
23tobacco products, alternative nicotine products, or vapor
24products, or nicotine solution products.
2511. Penalties. The permit suspension and revocation
26provisions and the civil penalties established in section
27453A.22 shall apply to retailers under this subchapter, in
28addition to any other penalties imposed under this subchapter.
29 Sec. 39. Section 453A.47B, Code 2023, is amended to read as
30follows:
31453A.47B Requirements for mailing or shipping — alternative
32nicotine products, or vapor products, or nicotine solution
33products.
34A retailer shall not mail, ship, or otherwise cause to be
35delivered any alternative nicotine product, or vapor product,
-45-1or nicotine solution product in connection with a delivery sale
2unless the retailer meets all of the following conditions:
31. Prior to sale to the purchaser, the retailer verifies
4that the purchaser is at least twenty-one years of age through
5or by one of the following:
6a. A commercially available database, or aggregate of
7databases, that is regularly used by government and businesses
8for the purpose of age and identity verification.
9b. Obtaining a copy of a valid government-issued document
10that provides the name, address, and date of birth of the
11purchaser.
122. The retailer uses a method of mailing, shipping, or
13delivery that requires the signature of a person who is at
14least twenty-one years of age before the shipping package is
15released to the purchaser.
16 Sec. 40. Section 453A.47C, Code 2023, is amended to read as
17follows:
18453A.47C Sales and use tax on delivery sales — alternative
19nicotine products, or vapor products, or nicotine solution
20products.
211. A delivery sale of alternative nicotine products, or
22 vapor products, or nicotine solution products within this state
23shall be subject to the sales tax provided in chapter 423,
24subchapter II.
252. The use in this state of alternative nicotine products,
26 or vapor products, or nicotine solution products purchased for
27use in this state through a delivery sale shall be subject to
28the use tax provided in chapter 423, subchapter III.
293. A retailer required to possess or possessing a permit
30under section 453A.13 or 453A.47A to make delivery sales of
31alternative nicotine products, or vapor products, or nicotine
32solution products within this state shall be deemed to have
33waived all claims that such retailer lacks physical presence
34within this state for purposes of collecting and remitting
35sales and use tax.
-46- 14. A retailer making taxable delivery sales of alternative
2nicotine products, or vapor products, or nicotine solution
3product within this state shall remit to the department all
4sales and use tax due on such sales at the times and in the
5manner provided by chapter 423.
65. The director shall adopt rules pursuant to chapter 17A to
7administer this section.
8 Sec. 41. Section 453A.48, Code 2023, is amended to read as
9follows:
10453A.48 Investigations, and hearings, and testimonial powers.
111. The director, or the director’s duly authorized agents,
12 may conduct investigations, inquiries, and hearings for the
13purpose of enforcing the provisions of this subchapter, and, in
14connection with such investigations, inquiries, and hearings,
15the director and the director’s duly authorized agents shall
16have all the powers conferred upon the director and the
17director’s examiners by Iowa statutes law, and the provisions
18of such these laws shall apply to all such investigations,
19inquiries, and hearings.
202. A hearing conducted under this subchapter shall be
21preceded by ten days’ notice in writing of the subject of the
22hearing, including, in the case of suspension or revocation of
23a license, a statement of the nature of the charges against
24the licensee. The notice shall be sent by mail to the last
25known address of the licensee or other person involved in the
26hearing, and the service shall be complete upon mailing. After
27every hearing the director shall make the director’s written
28 findings and an order in writing. The findings and order shall
29be filed in the office of the director, and a copy sent by mail
30or otherwise to the person to whom the notice was directed.
313. The director may exchange information with the officers
32and agencies of other states administering laws relating to the
33taxation of tobacco products or nicotine solution products.
344. No A person shall not be excused from testifying or
35from producing, pursuant to a subpoena, any books, papers,
-47-1records, or memoranda in any investigation or upon any hearing,
2upon the ground that the testimony or evidence, documentary or
3otherwise, may tend to incriminate the person or subject the
4person to a criminal penalty, but no. However, a person shall
5not be prosecuted or subjected to any criminal penalty for or
6on account of any transaction made or thing concerning which
7the person may testify or produce evidence, documentary or
8otherwise, before the director or an employee or agent thereof
9 of the director; provided that such immunity shall extend only
10to a natural person who, in obedience to a subpoena, gives
11testimony under oath or produces evidence, documentary or
12otherwise, pursuant to a subpoena. No A person so testifying
13in response to a subpoena shall not be exempt from prosecution
14and punishment for perjury committed in so testifying.
155. Any person aggrieved by an order of the director fixing
16a tax, penalty, or interest under section 453A.43 or section
17453A.43A may, within sixty days from the date of notice of the
18order, appeal to the board of review in the manner provided
19by law or unless the taxpayer contests the determination by
20paying the tax, interest, and penalty and timely filing a
21claim for refund. Judicial review of any other action of the
22director may be sought in accordance with the terms of the Iowa
23administrative procedure Act, chapter 17A.
24 Sec. 42. Section 453A.51, Code 2023, is amended to read as
25follows:
26453A.51 Assessment of cost of audit.
27The department may employ auditors or other persons to
28audit and examine the books and records of a permit holder or
29other person dealing in tobacco products or nicotine solution
30products to ascertain whether the permit holder or other person
31has paid the amount of the taxes required to be paid by the
32permit holder or other person under the provisions of this
33chapter. If the taxes have not been paid, as required, the
34department shall assess against the permit holder or other
35person, as an additional penalty, the reasonable expenses and
-48-1costs of the investigation and audit.
2 Sec. 43. Section 805.8C, subsection 3, Code 2023, is amended
3to read as follows:
43. Violations related to smoking, tobacco, tobacco products,
5alternative nicotine products, vapor products, nicotine solution
6products, and cigarettes.
7a. For violations described in section 142D.9, subsection 1,
8the scheduled fine is fifty dollars, and is a civil penalty,
9and the crime services surcharge under section 911.1 shall
10not be added to the penalty, and the court costs pursuant
11to section 805.9, subsection 6, shall not be imposed. If
12the civil penalty assessed for a violation described in
13section 142D.9, subsection 1, is not paid in a timely manner,
14a citation shall be issued for the violation in the manner
15provided in section 804.1. However, a person under age
16eighteen shall not be detained in a secure facility for failure
17to pay the civil penalty. The complainant shall not be charged
18a filing fee.
19b. For violations of section 453A.2, subsection 1, by an
20employee of a retailer, the scheduled fine is as follows:
21(1) If the violation is a first offense, the scheduled fine
22is one hundred thirty-five dollars.
23(2) If the violation is a second offense, the scheduled fine
24is three hundred twenty-five dollars.
25(3) If the violation is a third or subsequent offense, the
26scheduled fine is six hundred forty-five dollars.
27c. For violations of section 453A.2, subsection 2, the
28scheduled fine is as follows and is a civil penalty, and the
29crime services surcharge under section 911.1 shall not be added
30to the penalty, and the court costs pursuant to section 805.9,
31subsection 6, shall not be imposed:
32(1) If the violation is a first offense, the scheduled fine
33is seventy dollars.
34(2) If the violation is a second offense, the scheduled fine
35is one hundred thirty-five dollars.
-49- 1(3) If the violation is a third or subsequent offense, the
2scheduled fine is three hundred twenty-five dollars.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6This bill imposes a tax on nicotine solution products
7and requires the licensing of nicotine solution products
8distributors, subjobbers, retailers, and delivery sale
9retailers, similar to the licensing of tobacco product
10distributors, subjobbers, retailers, and delivery sale
11retailers.
12The bill defines “nicotine solution product” as any
13cartridge, bottle, or other package that contains nicotine,
14including nicotine made or derived from tobacco or sources
15other than tobacco, in a solution or other substance that is
16consumed or meant to be consumed through the use of a heating
17element, power source, electronic circuit, or other electronic,
18chemical, or mechanical means that produces vapor or aerosol.
19“Nicotine solution product” includes any alternative nicotine
20product, vapor product, or other product that contains an
21integrated, nonrefillable or nonreusable nicotine solution
22product component.
23The bill imposes a tax upon all nicotine solution products
24in this state and upon any person engaged in business as a
25distributor of nicotine solution products, at the rate of 26
26percent of the wholesale sales price of the nicotine solution
27product. The tax is imposed at the time the distributor brings
28or causes to be brought into the state from outside the state
29nicotine solution products for sale; makes, manufactures, or
30fabricates nicotine solution products in the state for sale in
31this state; or ships or transports nicotine solution products
32to retailers in this state, to be sold by those retailers. The
33tax is also imposed upon the use or storage by consumers of
34nicotine solution products in this state and upon the consumers
35at the rate of 26 percent of the cost of the nicotine solution
-50-1products. The tax on consumers does not apply if the taxes
2imposed on distributors for the nicotine solution products have
3been paid.
4The bill creates a health promotion trust fund in the office
5of the treasurer of state. The fund consists of the revenues
6generated from the tax on nicotine solution products that
7are credited to the health promotion trust fund, annually.
8Moneys in the fund are separate from the general fund of the
9state, are to be used only as specified in the bill, and are
10appropriated only for the uses specified. Moneys in the fund
11are not subject to reversion, and interest or earnings on
12moneys deposited in the fund shall be credited to the fund.
13Revenue generated from the tax on nicotine solution products
14shall be credited to the health promotion trust fund on an
15annual basis. Of the revenues generated and credited to the
16fund on an annual basis, 10 percent of the total amount is
17appropriated annually to the department of health and human
18services for tobacco use prevention and control efforts
19pursuant to Code chapter 142A and 90 percent of the total
20amount is appropriated annually to the judicial branch to be
21used to create and maintain civil and criminal specialty courts
22involving individuals with substance use disorder or mental
23health issues.
24The bill makes applicable to delivery sales of nicotine
25solution products, provisions that are applicable to delivery
26sales of alternative nicotine products and vapor products,
27including the imposition of sales and use taxes.
28The bill also makes applicable to nicotine solution products
29provisions similarly applicable to the use, sale, and taxation
30of tobacco products including required maintenance of itemized
31invoices, records, and reports; filing of monthly returns
32and the tax liability; imposition of interest and penalties;
33refunds and credits; inventory tax provisions; criminal and
34civil penalties; auditing and auditing costs; and seizure
35and forfeiture of products in the control of a person that
-51-1are being sold, distributed, removed, or otherwise used in
2violation of the bill.
3The bill also makes applicable to nicotine solution
4products, provisions and penalties under Code chapter 453A
5relating to the sale or other provision to, or the purchase or
6other use or possession by, persons under 21 years of age of
7cigarettes, tobacco products, and other products; the giving
8away of samples of cigarettes, tobacco products, and other
9products to persons under 21 years of age near locations used
10by persons primarily under 21 years of age; and self-service
11sales of cigarettes, tobacco products, and other products.
-52-pf/jh
2taxation of such products, making appropriations, and making
3penalties applicable.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 142A.2, subsection 8, Code 2023, is
2amended to read as follows:
38. “Manufacturer” means manufacturer as defined in section
4 sections 453A.1 and 453A.42.
5 Sec. 2. Section 142A.6, subsection 6, paragraph d, Code
62023, is amended to read as follows:
7d. For the purpose of this subsection, manufacturer,
8distributor, wholesaler, retailer, and distributing agent mean
9as defined in section sections 453A.1 and 453A.42.
10 Sec. 3. Section 232C.4, subsection 3, Code 2023, is amended
11to read as follows:
123. An emancipated minor shall remain subject to voting
13restrictions under chapter 48A, gambling restrictions under
14chapter 99B, 99D, 99F, 99G, or 725, internet fantasy sports
15contest restrictions under chapter 99E, alcohol restrictions
16under chapter 123, compulsory attendance requirements under
17chapter 299, and cigarette, tobacco product, alternative
18nicotine product, vapor product, and nicotine solution product
19 restrictions under chapter 453A.
20 Sec. 4. Section 321.216C, Code 2023, is amended to read as
21follows:
22321.216C Use of driver’s license or nonoperator’s
23identification card by underage person to obtain tobacco, tobacco
24products, alternative nicotine products, vapor products, nicotine
25solution products, or cigarettes.
26A person who is under the age of twenty-one, who alters
27or displays or has in the person’s possession a fictitious
28or fraudulently altered driver’s license or nonoperator’s
29identification card and who uses the license or card to violate
30or attempt to violate section 453A.2, subsection 2, commits a
31simple misdemeanor punishable as a scheduled violation under
32section 805.8A, subsection 4. The court shall forward a copy
33of the conviction to the department.
34 Sec. 5. Section 331.653, subsection 11, Code 2023, is
35amended to read as follows:
-1- 111. Carry out duties relating to the seizure and forfeiture
2of cigarettes, tobacco products, nicotine solution products,
3 vehicles, and other property used in violation of cigarette,
4tobacco products, and nicotine solution products tax laws as
5provided in section 453A.32.
6 Sec. 6. Section 331.756, subsection 19, Code 2023, is
7amended to read as follows:
819. Assist, at the request of the director of revenue, in
9the enforcement of cigar and cigarette, tobacco product, and
10nicotine solution product tax laws as provided in sections
11453A.32 and 453A.49.
12 Sec. 7. Section 423.3, subsection 57, paragraph h, Code
132023, is amended to read as follows:
14h. “Tobacco” means cigarettes, cigars, chewing or pipe
15tobacco, or any other item that contains tobacco products, and
16nicotine solution products as defined in sections 453A.1 and
17453A.42.
18 Sec. 8. Section 453A.1, Code 2023, is amended to read as
19follows:
20453A.1 Definitions.
21The following words, terms, and phrases, when used in this
22chapter, shall, for the purpose of this chapter, have the
23meanings respectively ascribed to them.
241. “Alternative nicotine product” means a product, not
25consisting of or containing tobacco, that provides for the
26ingestion into the body of nicotine, whether by chewing,
27absorbing, dissolving, inhaling, snorting, or sniffing, or
28by any other means. “Alternative nicotine product” does not
29include cigarettes, tobacco products, or vapor products, or a
30product that is regulated as a drug or device by the United
31States food and drug administration under chapter V of the
32federal Food, Drug, and Cosmetic Act.
332. “Attorney general” shall mean means the attorney
34general of the state or the attorney general’s duly authorized
35assistants and employees.
-2- 13. “Carton” means a box or container of any kind in which
2ten or more packages or packs of cigarettes or tobacco products
3are offered for sale, sold, or otherwise distributed to
4consumers.
54. “Cigarette” means any roll for smoking made wholly or in
6part of tobacco, or any substitute for tobacco, irrespective of
7size or shape and irrespective of tobacco or any substitute for
8tobacco being flavored, adulterated, or mixed with any other
9ingredient, where such roll has a wrapper or cover made of
10paper or any other material. However, “cigarette” shall not be
11construed to does not include cigars.
125. “Cigarette vending machine” means any self-service device
13offered for public use which, upon payment or insertion of
14loose tobacco product, dispenses, or assembles and dispenses,
15cigarettes or tobacco products.
166. “Cigarette vendor” means any person who by contract,
17agreement, or ownership takes responsibility for furnishing,
18installing, servicing, operating, or maintaining one or
19more cigarette vending machines for the purpose of selling
20cigarettes at retail.
217. 5. “Counterfeit stamp” shall mean means any stamp,
22label, print, indicium, or character which evidences, or
23purports to evidence the payment of any tax levied by this
24chapter, and which stamp, label, print, indicium, or character
25has not been printed, manufactured, or made by authority of
26the director as hereinafter provided, and which has not been
27 issued, sold, or circulated by the department or a bank as
28applicable pursuant to section 453A.8.
298. 6. “Delivery sale” means any sale of an alternative
30nicotine product, or a vapor product, or a nicotine solution
31product to a purchaser in this state where the purchaser
32submits the order for such sale by means of a telephonic or
33other method of voice transmission, mail or any other delivery
34service, or the internet or other online service and the
35alternative nicotine product, or vapor product, or a nicotine
-3-1solution product is delivered by use of mail or a delivery
2service. The sale of an alternative nicotine product, or
3 vapor product, or a nicotine solution product shall constitute
4a delivery sale regardless of whether the seller is located
5in this state. “Delivery sale” does not include a sale to a
6distributor or retailer of any alternative nicotine product, or
7 vapor product, or a nicotine solution product not for personal
8consumption.
99. 7. “Department” means the department of revenue.
1010. 8. “Director” means the director of revenue or the
11director’s duly authorized assistants and employees.
1211. 9. “Distributing agent” shall mean and include
13 means every person in this state who acts as an agent of
14any manufacturer outside of the state by storing cigarettes
15received in interstate commerce from such manufacturer subject
16to distribution or delivery to distributors upon orders
17received by said the manufacturer in interstate commerce and
18transmitted to such the distributing agent for fulfillment from
19such the place of storage.
2012. 10. “Distributing agent’s permit” shall mean and
21include means permits issued by the department to distributing
22agents.
2313. 11. “Distributor” shall mean and include means every
24person in this state who manufactures or produces cigarettes
25or who ships, transports, or imports into this state or in any
26manner acquires or possesses cigarettes without stamps affixed
27for the purpose of making a “first sale” of the same cigarettes
28 within the state.
2914. “Drop shipment” shall mean and include any delivery
30of cigarettes received by any person within this state when
31payment for such cigarettes is made to the shipper or seller by
32or through a person other than the consignee.
3315. 12. “First sale” shall mean and include means the first
34sale or distribution of cigarettes in intrastate commerce, or
35the first use or consumption of cigarettes within this state.
-4- 116. 13. “Individual packages of cigarettes” shall mean
2and include means every package of cigarettes or quantity of
3cigarettes assembled and ordinarily sold at retail.
417. 14. “Manufacturer” shall mean and include means every
5person who ships cigarettes into this state from outside the
6state.
718. 15. “Manufacturer’s permit” shall mean and include
8 means permits issued by the department to a manufacturer.
916. “Nicotine solution product” means any cartridge, bottle,
10or other package that contains nicotine, including nicotine
11made or derived from tobacco or sources other than tobacco,
12in a solution or other substance that is consumed or meant
13to be consumed through the use of a heating element, power
14source, electronic circuit, or other electronic, chemical, or
15mechanical means that produces vapor or aerosol. “Nicotine
16solution product” includes any alternative nicotine product,
17vapor product, or other product that contains an integrated,
18nonrefillable or nonreusable nicotine solution product
19component.
2019. 17. “Package” or “pack” means a container of any kind
21in which cigarettes or tobacco products are offered for sale,
22sold, or otherwise distributed to consumers.
2320. 18. “Person” shall mean and include means every
24individual, firm, association, joint stock company, syndicate,
25partnership, corporation, trustee, agency or receiver, or
26respective legal representative.
2721. 19. “Place of business” is construed to mean and
28include means any place where cigarettes are sold or where
29cigarettes are stored within or without the state of Iowa by
30the holder of an Iowa permit or kept for the purpose of sale
31or consumption; or if. “Place of business” includes a vehicle
32or train on which or from which cigarettes are sold from any
33vehicle or train, the vehicle or train on which or from which
34such cigarettes are sold shall constitute a place of business;
35or and, for a business within or without the state that
-5-1conducts delivery sales, any place where alternative nicotine
2products, or vapor products, or nicotine solution products are
3sold or where alternative nicotine products, or vapor products,
4or nicotine solution products are kept for the purpose of sale,
5including delivery sales.
622. 20. “Previously used stamp” shall mean and include
7 means any stamp which is used, sold, or possessed for the
8purpose of sale or use, to evidence the payment of the tax
9herein imposed on an individual package of cigarettes after
10said the stamp has, anterior to such use, sale, or possession,
11 been used on a previous or separate individual package of
12cigarettes to evidence the payment of the tax as aforesaid.
1323. 21. “Retailer” shall mean and include means every
14person in this state who shall sell, distribute, or offer
15 sells, distributes, or offers for sale for consumption or
16possess possesses for the purpose of sale for consumption,
17cigarettes, alternative nicotine products, or vapor products,
18or nicotine solution products, irrespective of quantity or
19amount or the number of sales.
2024. 22. “Retail permit” shall mean and include means
21 permits issued to retailers.
2225. 23. “Self-service display” means any manner of product
23display, placement, or storage from which a person purchasing
24the product may take possession of the product, prior to
25purchase, without assistance from the retailer or employee of
26the retailer, in removing the product from a restricted access
27location.
2826. 24. “Stamps” “Stamp” or “stamps” means the stamp or
29stamps printed, manufactured, or made by authority of the
30director and issued, sold, or circulated by the department or a
31bank as applicable pursuant to section 453A.8 and by the use of
32which the tax levied is paid. It “Stamp” or “stamps” also means
33any impression, indicium, or character fixed upon packages
34of cigarettes by a metered stamping machine or device which
35may be authorized by the director to the holder of state or
-6-1manufacturers’ permits and by the use of which the tax levied
2is paid.
327. 25. “State permit” shall mean and include means permits
4issued by the department to distributors, wholesalers, and
5retailers.
628. 26. “Tobacco products” means cigars; little cigars as
7defined in section 453A.42, subsection 6; cheroots; stogies;
8periques; granulated;, plug cut, crimp cut, ready rubbed,
9and other smoking tobacco; snuff,; snuff flour; cavendish;
10plug and twist tobacco; fine-cut and other chewing tobaccos;
11shorts; or refuse scraps, clippings, cuttings, and sweepings
12of tobacco,; and other kinds and forms of tobacco, prepared in
13such manner as to be suitable for chewing or smoking in a pipe
14or otherwise, or both for chewing and smoking; but does not
15mean cigarettes.
1629. 27. “Vapor product” means any noncombustible product,
17which may or may not contain nicotine, that employs a heating
18element, power source, electronic circuit, or other electronic,
19chemical, or mechanical means, regardless of shape or size,
20that can be used to produce vapor from a solution or other
21substance. “Vapor product” includes an electronic cigarette,
22electronic cigar, electronic cigarillo, electronic pipe, or
23similar product or device, and any cartridge or other container
24of a solution or other substance, which may or may not contain
25nicotine, that is intended to be used with or in an electronic
26cigarette, electronic cigar, electronic cigarillo, electronic
27pipe, or similar product or device. “Vapor product” does not
28include a product regulated as a drug or device by the United
29States food and drug administration under chapter V of the
30federal Food, Drug, and Cosmetic Act.
3128. “Vending machine” means any self-service device
32offered for public use which, upon payment or the insertion of
33loose tobacco product, dispenses or assembles and dispenses
34cigarettes, tobacco products, alternative nicotine products,
35vapor products, or nicotine solution products.
-7- 129. “Vendor” means any person who by contract, agreement,
2or ownership takes responsibility for furnishing, installing,
3servicing, operating, or maintaining one or more vending
4machines for the purpose of selling cigarettes, tobacco
5products, alternative nicotine products, vapor products, or
6nicotine solution products at retail.
730. “Wholesaler” shall mean and include means every person
8other than a distributor or distributing agent who engages in
9the business of selling or distributing cigarettes within the
10state, for the purpose of resale.
11 Sec. 9. Section 453A.2, subsections 1, 2, 3, and 8, Code
122023, are amended to read as follows:
131. A person shall not sell, give, or otherwise supply any
14tobacco, tobacco products, alternative nicotine products, vapor
15products, nicotine solution products, or cigarettes to any
16person under twenty-one years of age.
172. A person under twenty-one years of age shall not
18smoke, use, possess, purchase, or attempt to purchase any
19tobacco, tobacco products, alternative nicotine products, vapor
20products, nicotine solution products, or cigarettes.
213. Possession of tobacco, tobacco products, alternative
22nicotine products, vapor products, nicotine solution products,
23 or cigarettes by an individual under twenty-one years of
24age does not constitute a violation under this section if
25the individual under twenty-one years of age possesses the
26tobacco, tobacco products, alternative nicotine products, vapor
27products, nicotine solution products, or cigarettes as part
28of the individual’s employment and the individual is employed
29by a person who holds a valid permit under this chapter or
30who lawfully offers for sale or sells cigarettes, or tobacco
31products, alternative nicotine products, vapor products, or
32nicotine solution products.
338. a. A person shall not be guilty of a violation of this
34section if conduct that would otherwise constitute a violation
35is performed to assess compliance with tobacco, tobacco
-8-1products, alternative nicotine products, vapor products,
2nicotine solution products, or cigarette laws if any of the
3following applies:
4(1) The compliance effort is conducted by or under the
5supervision of law enforcement officers.
6(2) The compliance effort is conducted with the advance
7knowledge of law enforcement officers and reasonable measures
8are adopted by those conducting the effort to ensure that use
9of tobacco, tobacco products, alternative nicotine products,
10vapor products, nicotine solution products, or cigarettes by
11individuals under twenty-one years of age does not result from
12participation by any individual under twenty-one years of age
13in the compliance effort.
14b. For the purposes of this subsection, “law enforcement
15officer” means a peace officer as defined in section 801.4 and
16includes persons designated under subsection 4 to enforce this
17section.
18 Sec. 10. Section 453A.4, subsection 1, Code 2023, is amended
19to read as follows:
201. If a person holding a permit under this chapter or an
21employee of such a permittee has a reasonable belief based on
22factual evidence that a driver’s license as defined in section
23321.1, subsection 20A, or nonoperator’s identification card
24issued pursuant to section 321.190 offered by a person who
25wishes to purchase tobacco, tobacco products, alternative
26nicotine products, vapor products, nicotine solution
27products, or cigarettes is altered or falsified or belongs
28to another person, the permittee or employee may retain
29the driver’s license or nonoperator’s identification card.
30Within twenty-four hours, the card shall be delivered to the
31appropriate city or county law enforcement agency of the
32jurisdiction in which the permittee’s premises are located, and
33the permittee shall file a written report of the circumstances
34under which the card was retained. The local law enforcement
35agency may investigate whether a violation of section 321.216,
-9-1321.216A, or 321.216C has occurred. If an investigation is not
2initiated or probable cause is not established by the local
3law enforcement agency, the driver’s license or nonoperator’s
4identification card shall be delivered to the person to whom it
5was issued. The local law enforcement agency may forward the
6card with the report to the state department of transportation
7for investigation, in which case, the state department
8of transportation may investigate whether a violation of
9section 321.216, 321.216A, or 321.216C has occurred. The
10state department of transportation shall return the card to
11the person to whom it was issued if an investigation is not
12initiated or probable cause is not established.
13 Sec. 11. Section 453A.5, subsection 1, Code 2023, is amended
14to read as follows:
151. The alcoholic beverages division of the department of
16commerce shall develop a tobacco compliance employee training
17program not to exceed two hours in length for employees and
18prospective employees of retailers, as defined in sections
19453A.1 and 453A.42, to inform the employees about state and
20federal laws and regulations regarding the sale of tobacco,
21tobacco products, alternative nicotine products, vapor
22products, nicotine solution products, and cigarettes to persons
23under twenty-one years of age and compliance with and the
24importance of laws regarding the sale of tobacco, tobacco
25products, alternative nicotine products, vapor products,
26nicotine solution products, and cigarettes to persons under
27twenty-one years of age.
28 Sec. 12. Section 453A.6, subsections 2 and 3, Code 2023, are
29amended to read as follows:
302. The said tax shall be paid only once by the person
31making the “first sale” in this state, and shall become due
32and payable as soon as such cigarettes are subject to a “first
33sale” in Iowa, it being intended to impose the tax as soon as
34such cigarettes are received by any person in Iowa for the
35purpose of making a “first sale” of same the cigarettes. If
-10-1the person making the “first sale” did not pay such tax, it
2 the tax shall be paid by any person into whose possession such
3cigarettes come until said the tax has been paid in full.
4No A person, however, shall not be required to pay a tax on
5cigarettes brought into this state on or about the person in
6quantities of forty cigarettes or less, when such cigarettes
7have had the individual packages or seals thereof of the
8packages in which the cigarettes were contained broken and when
9such cigarettes are actually used by said the person and not
10sold or offered for sale.
113. Payment of the tax shall be evidenced by stamps purchased
12from the department or a bank authorized to sell stamps
13pursuant to section 453A.8 by a distributor or manufacturer
14and securely affixed to each individual package of cigarettes
15in amounts equal to the tax as imposed by this chapter, or
16by the impressing of an indicium upon individual packages of
17cigarettes, under regulations prescribed by the director.
18 Sec. 13. Section 453A.6, subsection 8, unnumbered paragraph
191, Code 2023, is amended to read as follows:
20Any permit holder owning, renting, leasing, or otherwise
21operating a cigarette vending machine into which loose tobacco
22products are inserted and from which assembled cigarettes are
23dispensed shall do all the following:
24 Sec. 14. Section 453A.7, subsection 1, Code 2023, is amended
25to read as follows:
261. The director of the department of administrative
27services shall have printed or manufactured, cigarette and
28little cigar tax stamps of such design, size, denomination,
29and type and in such quantities as may be determined by the
30director of revenue. The stamps shall be so manufactured as
31 to render them the stamps easy to be securely attached to each
32individual package of cigarettes and little cigars or cigarette
33papers. The cigarette and little cigar tax stamps shall be
34in the possession of and under the control of the director of
35revenue and the director shall keep accurate records of all
-11-1cigarette and little cigar tax stamps.
2 Sec. 15. Section 453A.8, subsections 2 and 3, Code 2023, are
3amended to read as follows:
42. Orders for cigarette tax stamps, including the payment
5for such stamps, shall be sent direct to the department on a
6form to be prescribed by the director, except as provided in
7subsection 6.
83. a. The department may make issue refunds on unused
9stamps to the person who purchased the stamps at a price equal
10to the amount paid for the stamps when proof satisfactory to
11the department is furnished that any stamps upon which a refund
12is requested were properly purchased from the department and
13paid for by the person requesting the refund. In making the
14refund, the department shall prepare a voucher showing the
15amount of refund due and to whom payable and shall authorize
16the department of administrative services to issue a warrant
17upon order of the director to pay the refund out of any funds in
18the state treasury not otherwise appropriated.
19b. The director may promulgate adopt rules providing for
20refunds of the face value of stamps, less any discount, affixed
21to any cigarettes package, the contents of which have become
22unfit for use and consumption, unsalable, or for any other
23legitimate loss which may occur, upon proof of such loss.
24Refund Refunds shall be made in the same manner as provided for
25unused stamps.
26 Sec. 16. Section 453A.10, Code 2023, is amended to read as
27follows:
28453A.10 Affixing of stamps by distributors.
29Except as provided in section 453A.17, every distributor
30holding an Iowa permit shall cause to be affixed, within or
31without the state of Iowa, upon every individual package
32of cigarettes received by the distributor in this state or
33for distribution in this state, upon which no a sufficient
34tax stamp is not already affixed, a stamp or stamps of
35an amount equal to the tax due thereon on the package of
-12-1cigarettes. Such stamps shall be affixed within forty-eight
2hours, exclusive of a Sunday or a holiday, from the hour the
3cigarettes were received, and shall be affixed before such
4distributor sells, offers for sale, consumes, or otherwise
5distributes or transports the same cigarettes. It shall be
6unlawful for any person, other than a distributing agent or
7distributor, bonded pursuant to section 453A.14, or common
8carrier to receive or accept delivery of any cigarettes without
9stamps affixed to evidence the payment of the tax, or without
10having in the distributor’s, distributing agent’s, or common
11carrier’s possession the requisite amount or number of stamps
12necessary to stamp such cigarettes, and the. The possession
13of any unstamped cigarettes, without the possession of the
14requisite amount or number of stamps, shall be prima facie
15evidence of the violation of this provision. As used in this
16section, “holiday” means the same as defined in section 421.9A.
17 Sec. 17. Section 453A.11, Code 2023, is amended to read as
18follows:
19453A.11 Cancellation of stamps.
20Stamps affixed to a package of cigarettes shall not
21be canceled by any letter, numeral, or other mark of
22identification or otherwise mutilated in any manner that will
23prevent or hinder the department in making an examination as
24to the genuineness of the stamp. However, the director may
25require such cancellation of cancel the tax stamps affixed
26to packages of cigarettes which is as necessary to carry out
27properly the provisions of this subchapter. A person who
28cancels or causes the cancellation of stamps in violation of
29this section shall be considered in possession of unstamped
30cigarettes and is subject to the penalty for possession of
31unstamped cigarettes as provided in section 453A.31, subsection
321, paragraph “a”.
33 Sec. 18. Section 453A.13, Code 2023, is amended to read as
34follows:
35453A.13 Distributor’s, wholesaler’s, vendor’s, and retailer’s
-13-1permits.
21. Permits required. Every distributor, wholesaler,
3cigarette vendor, and retailer, now engaged or who desires to
4become engaged in the sale or use of cigarettes, upon which a
5tax is required to be paid, and every retailer now engaged or
6who desires to become engaged in selling, offering for sale, or
7distributing alternative nicotine products, or vapor products,
8or nicotine solution products, including through delivery
9sales, shall obtain a state or retail permit as a distributor,
10wholesaler, cigarette vendor, or retailer, as the case may be.
112. Issuance or denial.
12a. The department shall issue state permits to distributors,
13wholesalers, and cigarette vendors, and retailers that make
14delivery sales of alternative nicotine products, and vapor
15products, and nicotine solution products subject to the
16conditions provided in this subchapter. If an out-of-state
17retailer makes delivery sales of alternative nicotine
18products, or vapor products, or nicotine solution products, an
19application shall be filed with the department and a permit
20shall be issued for the out-of-state retailer’s principal place
21of business. Cities may issue retail permits to retailers
22with a place of business located within their respective
23limits. County boards of supervisors may issue retail permits
24to retailers with a place of business in their respective
25counties, outside of the corporate limits of cities.
26b. The department may deny the issuance of a permit
27to a distributor, wholesaler, vendor, or retailer who is
28substantially delinquent in the payment of a tax due, or the
29interest or penalty on the tax, administered by the department
30at the time of application. If the applicant is a partnership,
31a permit may be denied if a partner is substantially delinquent
32on any delinquent tax, penalty or interest. If the applicant
33is a corporation, a permit may be denied if any officer having
34a substantial legal or equitable interest in the ownership of
35the corporation owes any delinquent tax, interest, or penalty
-14-1of the applicant corporation.
2c. The department, or a city or county, shall submit
3a duplicate of any application for a retail permit to the
4alcoholic beverages division of the department of commerce
5within thirty days of the issuance. The alcoholic beverages
6division of the department of commerce shall submit the current
7list of all retail permits issued to the Iowa department of
8public health and human services by the last day of each
9quarter of a state fiscal year.
103. Fees — expiration.
11a. All permits provided for in this subchapter shall expire
12on June 30 of each year. A permit shall not be granted or
13issued until the applicant has paid for the period ending June
1430 next, to the department or the city or county granting the
15permit, the fees provided for in this subchapter. The annual
16state permit fee for a distributor, cigarette vendor, and
17 wholesaler, or vendor is one hundred dollars when the permit
18is granted during the months of July, August, or September.
19However, whenever a state permit holder operates more than one
20place of business, a duplicate state permit shall be issued for
21each additional place of business on payment of five dollars
22for each duplicate state permit, but refunds as provided in
23this subchapter do not apply to any duplicate permit issued.
24b. The fee for retail permits is as follows when the permit
25is granted during the months of July, August, or September:
26(1) In places outside any city, fifty dollars.
27(2) In cities of less than fifteen thousand population,
28seventy-five dollars.
29(3) In cities of fifteen thousand or more population, one
30hundred dollars.
31c. If any permit is granted during the months of October,
32November, or December, the fee shall be three-fourths of
33the above maximum schedule; if granted during the months of
34January, February, or March, one-half of the maximum schedule,
35and if granted during the months of April, May, or June,
-15-1one-fourth of the maximum schedule.
24. Refunds.
3a. An unrevoked permit for which the holder has paid the
4full annual fee may be surrendered during the first nine months
5of said the year to the officer issuing it, and the department,
6 or the city or county granting the permit shall make refunds to
7the holder as follows:
8(1) Three-fourths of the annual fee if the surrender is made
9during July, August, or September.
10(2) One-half of the annual fee if the surrender is made
11during October, November, or December.
12(3) One-fourth of the annual fee if the surrender is made
13during January, February, or March.
14b. An unrevoked permit for which the holder has paid
15three-fourths of a full annual fee may be so surrendered during
16the first six months of the period covered by said the payment
17and the department, city, or county shall make refunds to the
18holder as follows:
19(1) A sum equal to one-half of an annual fee if the
20surrender is made during October, November, or December.
21(2) A sum equal to one-fourth of an annual fee if the
22surrender is made during January, February, or March.
23c. An unrevoked permit for which the holder has paid
24one-half of a full annual fee may be surrendered during the
25first three months of the period covered by that payment, and
26the department, city, or county shall refund to the holder a
27sum equal to one-fourth of an annual fee.
285. Application — bond. Permits shall be issued only upon
29applications accompanied by the fee indicated above, and by an
30adequate bond as provided in section 453A.14, and upon forms
31furnished by the department upon written request. The failure
32to furnish such the forms shall not be no an excuse for the
33 failure to file the forms unless absolute refusal is shown.
34The forms shall set forth specify all of the following:
35a. The manner under which the distributor, wholesaler,
-16- 1vendor, or retailer, transacts or intends to transact such
2business as a distributor, wholesaler, vendor, or retailer.
3b. The principal office, residence, and place of business
4where the permit is to apply.
5c. If the applicant is not an individual, the principal
6officers or members and their addresses.
7d. Any other information as the director shall by rules
8 prescribe by rule.
96. No sales without permit. A distributor, wholesaler,
10cigarette vendor, or retailer shall not sell any cigarettes,
11alternative nicotine products, or vapor products, or nicotine
12solution products until such application has been filed and
13the fee prescribed paid for a permit and until such permit is
14obtained and only while such permit is unrevoked and unexpired.
157. Number of permits — trucks. An application shall be
16filed and a permit obtained for each place of business owned or
17operated by a distributor, wholesaler, or retailer, excepting
18 except that no a permit need not be obtained for a delivery or
19sales truck of a distributor or wholesaler holding a permit,
20provided that the director may by regulation require that said
21 the truck bear the distributor’s or wholesaler’s name, and that
22the permit number of the place of business for and from which
23it the truck operates be conspicuously displayed on the outside
24of the body of the truck, immediately under the name.
258. Group business. Any person who operates both as a
26distributor and wholesaler in the same place of business shall
27only be required to obtain a state permit for the particular
28place of business where such operation of said the business
29is conducted. A separate retail permit, however, shall be
30required if any distributor or wholesaler sells cigarettes at
31both retail and wholesale.
329. Permit — form and contents. Each permit issued shall
33describe clearly the place of business for which it the permit
34 is issued, shall be nonassignable, consecutively numbered,
35designating the kind of permit, and shall authorize the sale of
-17-1cigarettes, alternative nicotine products, or vapor products,
2or nicotine solution products in this state subject to the
3limitations and restrictions herein contained specified under
4this chapter. The retail permits shall be upon forms furnished
5by the department or on forms made available or approved by the
6department.
710. Permit displayed. The permit shall, at all times, be
8publicly displayed by the distributor, wholesaler, vendor, or
9retailer at the place of business so as to be easily seen by
10the public and the persons authorized to inspect the place
11of business. The proprietor or keeper of any building or
12place where cigarettes, alternative nicotine products, vapor
13products, nicotine solution products, tobacco, or tobacco
14products are kept for sale, or with intent to sell, shall upon
15request of any agent of the department or any peace officer
16exhibit the permit. A refusal or failure to exhibit the permit
17is prima facie evidence that the cigarettes, alternative
18nicotine products, vapor products, nicotine solution products,
19 tobacco, or tobacco products are kept for sale or with intent
20to sell in violation of this subchapter.
21 Sec. 19. Section 453A.15, subsections 4, 5, and 6, Code
222023, are amended to read as follows:
234. Every permit holder or other person shall, when requested
24by the department, make additional reports as the department
25deems necessary and proper and shall at the request of the
26department furnish full and complete information pertaining to
27any transaction of the permit holder or other person involving
28the purchase or sale or use of cigarettes or purchase of
29cigarette stamps.
305. Every person engaged in the business of selling
31cigarettes in interstate commerce only, who has, by furnishing
32the bond required in section 453A.14, been permitted to set
33aside or store cigarettes in this state for the conduct of
34such interstate business without the stamps affixed thereto
35 to the cigarettes, shall be required to keep such records and
-18-1make such reports to the department as are required by the
2department.
36. If any distributor, manufacturer, or other person
4fails or refuses to pay any tax, penalties, or cost of an
5 audit hereinafter provided, and it becomes necessary to bring
6suit or to intervene in any manner for the establishment or
7collection of said the claims, in any judicial proceedings, any
8report filed in the office of the director by the distributor,
9manufacturer, or other person, or the distributor’s,
10manufacturer’s, or other person’s representative, or a
11copy thereof of the report, certified to by the director,
12showing the number of cigarettes sold by the distributor,
13the distributor’s representative, the manufacturer, or the
14other person, upon which a tax, penalty, or cost of audit
15has not been paid, or any audit made by the department from
16the books or records of the distributor, manufacturer, or
17other person when signed and sworn to by the agent of the
18department making the audit as being made from the books or
19 records of the distributor, manufacturer, or other person from
20or to whom the distributor, manufacturer, or other person
21has bought, received, or delivered cigarettes, whether from
22a transportation company or otherwise, such report or audit
23shall be admissible in evidence in such proceedings and shall
24be prima facie evidence of the contents thereof. However, the
25incorrectness of the report or audit may be shown.
26 Sec. 20. Section 453A.17, Code 2023, is amended to read as
27follows:
28453A.17 Distributing agent’s permit.
291. Every distributing agent in the state, now engaged,
30or who desires to become engaged, in the business of storing
31unstamped cigarettes which are received in interstate commerce
32for distribution or delivery only upon order received from
33without the state or to be sold outside the state, shall
34file with the department, an application with the department
35 for a distributing agent’s permit, on a form prescribed by
-19-1the director, to be and furnished by the department upon
2written request. The failure of the department to furnish
3an application shall not be no an excuse for the failure to
4file the same application unless an absolute refusal is shown.
5Said The application form shall set forth specify the name
6under which such the distributing agent transacts or intends to
7transact such business as a distributing agent, the principal
8office and place of business in Iowa to which the permit is
9to apply, and if other than an individual, the principal
10officers or members thereof of the distributing agent and their
11addresses. The director may require any other information in
12said the application. No A distributing agent shall not engage
13in such business until such the application has been filed
14and, a fee in the sum of one hundred dollars has been paid for
15the permit, and until the permit has been obtained. Such The
16 permit shall expire on June 30 following the date of issuance.
17All of the The provisions of the last two paragraphs of section
18453A.14, relative to bonds, are incorporated herein and by
19this reference made applicable to distributing agents. Upon
20failure to furnish adequate bond as required, the permit shall
21be revoked without hearing. An application shall be filed and
22a permit obtained for each place of business owned or operated
23by a distributing agent.
242. Upon receipt of the application, the bond, and the permit
25fee, the department may issue to every distributing agent for
26the place of business designated a nonassignable consecutively
27numbered permit, authorizing the storing, and distribution of
28unstamped cigarettes within this state when the distribution
29is made upon interstate orders only. A distributing agent
30may also transport unstamped cigarettes in the agent’s own
31conveyances to the state boundary for distribution outside the
32state, and any nonresident customer of the distributor may
33purchase and convey unstamped cigarettes to the state line for
34distribution outside the state. The nonresident purchaser
35shall have in possession an invoice evidencing the purchase of
-20-1the unstamped cigarettes, which must be exhibited upon request
2to any peace officer or agent charged with the enforcement of
3this subchapter.
43. Cigarettes set aside for interstate business must be kept
5separate from intrastate stock and those cigarettes not so kept
6separate shall be considered as intrastate stock and subject to
7the same requirements as cigarettes possessed for the purpose
8of a “first sale”.
94. It is unlawful for any distributing agent to sell at
10retail cigarettes from automobiles, trucks, or any similar
11conveyances.
12 Sec. 21. Section 453A.19, Code 2023, is amended to read as
13follows:
14453A.19 Examination of records and premises.
151. For the purpose of enabling the department to determine
16the tax liability of permit holders or any other person dealing
17in cigarettes or to determine whether a tax liability has been
18incurred, the department shall have the right to inspect any
19premises of the holder of an Iowa permit located within or
20without the state of Iowa where cigarettes are manufactured,
21produced, made, stored, transported, sold, or offered for sale
22or exchange, and to examine all of the records required to be
23kept or any other records that may be kept incident to the
24conduct of the cigarette business of said the permit holder or
25any other person dealing in cigarettes.
262. The said authorized officers shall also have the right,
27 as an incident to determining the said tax liability, or
28whether a tax liability has been incurred, to examine all
29stocks of cigarettes and cigarette stamps and for the foregoing
30purpose said authorized officers shall also have the right to
31remain upon said the premises for such length of time as may be
32 necessary to fully determine said the tax liability, or whether
33a tax liability has been incurred.
343. It shall be unlawful for any of the foregoing permit
35holders to fail to produce upon demand of the department any
-21-1records required herein to be kept or to hinder or prevent
2in any manner the inspection of said the records or the
3examination of said the premises.
44. In the case of any departmental inspection conducted
5under this section requiring department personnel to travel
6outside the state of Iowa, any additional costs incurred by the
7department for out-of-state travel expenses shall be borne by
8the permittee. These additional costs shall be those costs in
9excess of the costs of a similar inspection conducted at the
10geographical point located within the state of Iowa nearest to
11the out-of-state inspection point. In lieu of conducting an on
12premises out-of-state inspection, the department shall have the
13authority to may direct the permittee to assemble and transport
14all records described in subsection 1, to the nearest practical
15and convenient geographical location in Iowa for inspection by
16the department.
17 Sec. 22. Section 453A.21, Code 2023, is amended to read as
18follows:
19453A.21 Cigarettes retailer may not sell.
20Unless a retail permit holder shall also hold holds a state
21permit, it shall be unlawful for a the retailer to sell or have
22in the retailer’s possession cigarettes upon which the stamp
23tax has stamps have not been affixed.
24 Sec. 23. Section 453A.32, subsection 6, Code 2023, is
25amended to read as follows:
266. The provisions of this section applying to cigarettes
27shall also apply to tobacco products and nicotine solution
28products taxed under subchapter II of this chapter.
29 Sec. 24. Section 453A.33, Code 2023, is amended to read as
30follows:
31453A.33 Seizure not to affect criminal prosecution.
32The seizure, forfeiture, and sale of cigarettes, tobacco
33products, nicotine solution products, and other property under
34the terms and conditions set out specified in section 453A.32,
35shall not constitute any defense to the person owning or having
-22-1control or possession of the property from criminal prosecution
2for any act or omission made or offense committed under this
3chapter or from liability to pay penalties provided by this
4chapter.
5 Sec. 25. Section 453A.35, subsection 1, paragraph a, Code
62023, is amended to read as follows:
7a. With the exception of revenues credited to the health
8care trust fund pursuant to paragraph “b” and the revenues
9generated from the tax on nicotine solution products pursuant
10to section 453A.43A, the proceeds derived from the sale of
11stamps and the payment of fees and penalties provided for under
12this chapter, and the permit fees received from all permits
13issued by the department, shall be credited to the general fund
14of the state.
15 Sec. 26. Section 453A.36, subsections 1, 2, 3, 4, 5, 6, and
167, Code 2023, are amended to read as follows:
171. Except as otherwise provided in this subchapter, it is
18unlawful for any person to have in the person’s possession for
19sale, distribution, or use, or for any other purpose, in excess
20of forty cigarettes, or to sell, distribute, use, or present
21as a gift or prize cigarettes upon which a tax is required to
22be paid by this subchapter, without having affixed to each
23individual package of cigarettes, the proper stamp evidencing
24the payment of the tax and the. The absence of the stamp on the
25individual package of cigarettes is notice to all persons that
26the tax has not been paid and is prima facie evidence of the
27nonpayment of the tax.
282. No A person, other than a common carrier and a
29distributor’s truck bearing the distributor’s name and permit
30number in plain view on the outside of such truck, shall not
31 transport within this state cigarettes upon which a tax is
32required to be paid, without having stamps affixed to each
33individual package of said cigarettes; and no. A person shall
34not fail or refuse, upon demand of agent of the department, or
35any peace officer to stop any vehicle transporting cigarettes
-23-1for a full and complete inspection of the cargo carried.
23. No A person shall not use, sell, offer for sale, or
3possess for the purpose of use or sale, within this state, any
4previously used stamp or stamps, or attach any such previously
5used stamps to an individual package of cigarettes, nor shall
6any person purchase stamps from any person other than the
7department or a bank authorized to sell stamps pursuant to
8section 453A.8, or sell stamps purchased from the department or
9a bank authorized to sell stamps pursuant to section 453A.8.
104. No A person shall not knowingly use, consume, or smoke,
11within this state, cigarettes upon which a tax is required to
12be paid, without said the tax having been paid.
135. No A person, unless the person be other than the holder
14of a permit, or the permit holder’s representative, shall
15not solicit the sale of cigarettes, provided that. However,
16 this section subsection shall not prevent solicitation by a
17nonpermit holder for the sale of cigarettes to any state permit
18holder.
196. Any sales of tobacco, tobacco products, alternative
20nicotine products, vapor products, nicotine solution products,
21 or cigarettes made through a cigarette vending machine are
22subject to rules and penalties relative to retail sales of
23tobacco, tobacco products, alternative nicotine products, vapor
24products, nicotine solution products, and cigarettes provided
25for in this chapter. Cigarettes shall not be sold through
26any cigarette a vending machine unless the cigarettes have
27been properly stamped or metered as provided by under this
28subchapter, and in case of violation of this provision, the
29permit of the dealer authorizing retail sales of cigarettes
30shall be revoked. Payment of the permit fee as provided
31in section 453A.13 authorizes a cigarette vendor to sell
32tobacco, tobacco products, alternative nicotine products,
33vapor products, nicotine solution products, and cigarettes
34through vending machines. However, tobacco, tobacco products,
35alternative nicotine products, vapor products, nicotine
-24-1solution products, and cigarettes shall not be sold through
2a vending machine unless the vending machine is located in
3a place where the retailer ensures that no person younger
4than twenty-one years of age is present or permitted to
5enter at any time. Tobacco, tobacco products, alternative
6nicotine products, vapor products, nicotine solution products,
7 and cigarettes shall not be sold through any cigarette a
8 vending machine if such products are placed together with
9any nontobacco product, other than matches, in the cigarette
10 vending machine. This section subsection does not require a
11retail permit holder to buy a cigarette vendor’s permit if the
12retail permit holder is in fact the owner of the cigarette
13 vending machines and the machines are operated in the location
14described in the retail permit.
157. a. It shall be unlawful for a person other than a
16retailer as defined in section 453A.1 or 453A.42 who holds a
17valid retail permit, as applicable, to sell tobacco, tobacco
18products, alternative nicotine products, vapor products,
19nicotine solution products, or cigarettes at retail.
20b. A state permit holder shall not sell or distribute
21cigarettes at wholesale to any person in the state of Iowa
22 who does not hold a permit authorizing the retail sale
23of cigarettes or who does not hold a state permit as a
24manufacturer, distributing agent, wholesaler, or distributor.
25 Sec. 27. Section 453A.36A, subsection 1, Code 2023, is
26amended to read as follows:
271. Except as provided in section 453A.36, subsection 6,
28a retailer shall not sell or offer for sale tobacco, tobacco
29products, alternative nicotine products, vapor products,
30nicotine solution products, or cigarettes through the use of
31a self-service display.
32 Sec. 28. Section 453A.39, Code 2023, is amended to read as
33follows:
34453A.39 Tobacco, tobacco products, alternative nicotine
35products, vapor products, nicotine solution products, and
-25-1cigarette samples — restrictions — administration.
21. A manufacturer, distributor, wholesaler, retailer, or
3distributing agent, or agent thereof, shall not give away
4cigarettes or tobacco products at any time in connection with
5the manufacturer’s, distributor’s, wholesaler’s, retailer’s, or
6distributing agent’s business or for promotion of the business
7or product, except as provided in subsection 2.
82. a. All cigarette samples shall be shipped only to a
9distributor that has a permit to stamp cigarettes or little
10cigars with Iowa tax. All cigarette samples must have a
11cigarette stamp. The manufacturer shipping samples under this
12section shall send an affidavit to the director stating the
13shipment information, including the date shipped, quantity, and
14to whom the samples were shipped. The distributor receiving
15the shipment shall send an affidavit to the director stating
16the shipment information, including the date shipped, quantity,
17and from whom the samples were shipped. These affidavits shall
18be duly notarized and submitted to the director at the time of
19shipment and receipt of the samples. The distributor shall
20pay the tax on samples by separate remittance along with the
21affidavit.
22b. A manufacturer, distributor, wholesaler, retailer, or
23distributing agent or agent thereof shall not give away any
24tobacco, tobacco products, alternative nicotine products, vapor
25products, nicotine solution products, or cigarettes to any
26person under twenty-one years of age, or within five hundred
27feet of any playground, school, high school, or other facility
28when such facility is being used primarily by persons under age
29twenty-one for recreational, educational, or other purposes.
30c. Proof of age shall be required if a reasonable person
31could conclude on the basis of outward appearance that a
32prospective recipient of a sample may be under twenty-one years
33of age.
34 Sec. 29. Section 453A.40, subsections 1 and 3, Code 2023,
35are amended to read as follows:
-26- 11. All persons required to obtain a permit or to be licensed
2under section 453A.13 or section 453A.44 having in their
3possession and held for resale on the effective date of an
4increase in the tax rate cigarettes, little cigars, or tobacco
5products, or nicotine solution products upon which the tax
6under section 453A.6, or 453A.43, or 453A.43A has been paid,
7unused cigarette tax stamps which have been paid for under
8section 453A.8, unused metered imprints which have been paid
9for under section 453A.12, or tobacco products or nicotine
10solution products for which the tax has not been paid under
11section 453A.46 shall be subject to an inventory tax on the
12items as provided in this section.
133. The rate of the inventory tax on each item subject to
14the tax as specified in subsection 1 is equal to the difference
15between the amount paid on each item under section 453A.6,
16453A.8, 453A.12, or 453A.43, or 453A.43A prior to the tax
17increase and the amount that is to be paid on each similar item
18under section 453A.6, 453A.8, 453A.12, or 453A.43, or 453A.43A
19 after the tax increase except that in computing the rate of the
20inventory tax any discount allowed or allowable under section
21453A.8 shall not be considered.
22 Sec. 30. Section 453A.42, Code 2023, is amended to read as
23follows:
24453A.42 Definitions.
25When used in this subchapter, unless the context clearly
26indicates otherwise, the following terms shall have the
27meanings, respectively, ascribed to them in this section:
281. “Alternative nicotine product” means the same as defined
29in section 453A.1.
301. 2. “Business” means any trade, occupation, activity,
31or enterprise engaged in for the purpose of selling or
32distributing tobacco products or nicotine solution products in
33this state.
342. 3. “Consumer” means any person who has title to or
35possession of tobacco products or nicotine solution products in
-27-1storage, for use or other consumption in this state.
23. 4. “Delivery sale” means any sale of an alternative
3nicotine product or a vapor product to a purchaser in this
4state where the purchaser submits the order for such sale by
5means of a telephonic or other method of voice transmission,
6mail or any other delivery service, or the internet or other
7online service and the alternative nicotine product or vapor
8product is delivered by use of mail or a delivery service. The
9sale of an alternative nicotine product or vapor product shall
10constitute a delivery sale regardless of whether the seller
11is located in this state. “Delivery sale” does not include a
12sale to a distributor or retailer of any alternative nicotine
13product or vapor product not for personal consumption the same
14as defined in section 453A.1.
154. 5. “Director” means the director of the department of
16revenue.
175. 6. “Distributor” means any and each of the following:
18a. Any person engaged in the business of selling tobacco
19products or nicotine solution products in this state who
20brings, or causes to be brought, into this state from without
21the state any tobacco products or nicotine solution products
22 for sale;.
23b. Any person who makes, manufactures, or fabricates tobacco
24products or nicotine solution products in this state for sale
25in this state;.
26c. Any person engaged in the business of selling tobacco
27products or nicotine solution products without this state who
28ships or transports tobacco products or nicotine solution
29products to retailers in this state, to be sold by those
30retailers.
316. 7. “Little cigar” means any roll for smoking which meets
32all of the following conditions:
33a. Is made wholly or in part of tobacco, irrespective of
34size or shape and irrespective of the tobacco being flavored,
35adulterated, or mixed with any other ingredient;.
-28- 1b. Is not a cigarette as defined in section 453A.1,
2subsection 4; and.
3c. Either weighs not more than three pounds per thousand,
4irrespective of retail price, or weighs more than three pounds
5per thousand and has a retail price of not more than two
6and one-half cents per little cigar. For purposes of this
7subsection, the retail price is the ordinary retail price in
8this state, not including retail sales tax, use tax, or the tax
9on little cigars imposed by section 453A.43.
107. 8. “Manufacturer” means a person who manufactures and
11sells tobacco products or nicotine solution products.
129. “Nicotine solution product” means the same as defined in
13section 453A.1.
148. 10. “Person” means any individual, firm, association,
15partnership, joint stock company, joint adventure, corporation,
16trustee, agency, or receiver, or any legal representative of
17any of the foregoing the same as defined in section 453A.1.
189. 11. “Place of business” means any place where
19tobacco products or nicotine solution products are sold or
20where tobacco products or nicotine solution products are
21manufactured, stored, or kept for the purpose of sale or
22consumption, including any vessel, vehicle, airplane, train, or
23vending machine; or and for a business within or without the
24state that conducts delivery sales, any place where alternative
25nicotine products, or vapor products, or nicotine solution
26products are sold or where alternative nicotine products, or
27 vapor products, or nicotine solution products are kept for the
28purpose of sale, including delivery sales.
2910. 12. “Retail outlet” means each place of business from
30which tobacco products are sold to consumers.
3111. 13. “Retailer” means any person engaged in the business
32of selling tobacco, tobacco products, alternative nicotine
33products, or vapor products, or nicotine solution products to
34ultimate consumers.
3512. 14. “Sale” means any transfer, exchange, or barter,
-29-1in any manner or by any means whatsoever, for a consideration,
2and includes and means all sales made by any person. It
3 “Sale” includes a gift by a person engaged in the business
4of selling tobacco products or nicotine solution products,
5for advertising, as a means of evading the provisions of this
6subchapter, or for any other purposes whatsoever.
713. 15. “Snuff” means any finely cut, ground, or powdered
8tobacco that is not intended to be smoked.
914. 16. “Storage” means any keeping or retention of tobacco
10products or nicotine solution products for use or consumption
11in this state.
1215. 17. “Subjobber” means any person, other than a
13manufacturer or distributor, who buys tobacco products or
14nicotine solution products from a distributor and sells them to
15persons other than the ultimate consumers.
1616. 18. “Tobacco products” means cigars; little cigars
17as defined herein; cheroots; stogies; periques; granulated,
18plug cut, crimp cut, ready rubbed, and other smoking tobacco;
19snuff; cavendish; plug and twist tobacco; fine-cut and other
20chewing tobaccos; shorts; refuse scraps, clippings, cuttings
21and sweepings of tobacco, and other kinds and forms of tobacco,
22prepared in such manner as to be suitable for chewing or
23smoking in a pipe or otherwise, or both for chewing and
24smoking; but shall not include cigarettes as defined in section
25453A.1, subsection 4 the same as defined in section 453A.1.
2617. 19. “Use” means the exercise of any right or power
27incidental to the ownership of tobacco products or nicotine
28solution products.
2920. “Vapor product” means the same as defined in section
30453A.1.
3118. 21. “Wholesale sales price” means the established price
32for which a manufacturer sells a tobacco product or a nicotine
33solution product to a distributor, exclusive of any discount
34or other reduction.
35 Sec. 31. Section 453A.43, subsection 1, paragraphs a and b,
-30-1Code 2023, are amended to read as follows:
2a. A tax is imposed upon all tobacco products in this state
3and upon any person engaged in business as a distributor of
4tobacco products, at the rate of twenty-two percent of the
5wholesale sales price of the tobacco products, except little
6cigars and snuff as defined in section 453A.42.
7b. In addition to the tax imposed under paragraph “a”, a
8tax is imposed upon all tobacco products in this state and upon
9any person engaged in business as a distributor of tobacco
10products, at the rate of twenty-eight percent of the wholesale
11sales price of the tobacco products, except little cigars and
12snuff as defined in section 453A.42.
13 Sec. 32. NEW SECTION. 453A.43A Tax on nicotine solution
14products.
151. A tax is imposed upon all nicotine solution products
16in this state and upon any person engaged in business as a
17distributor of nicotine solution products, at the rate of
18twenty-six percent of the wholesale sales price of the nicotine
19solution products.
202. The taxes on nicotine solution products shall be imposed
21at the time the distributor does any of the following:
22a. Brings, or causes to be brought, into this state from
23outside the state nicotine solution products for sale.
24b. Makes, manufactures, or fabricates nicotine solution
25products in this state for sale in this state.
26c. Ships or transports nicotine solution products to
27retailers in this state, to be sold by those retailers.
283. a. A tax is imposed upon the use or storage by consumers
29of nicotine solution products in this state, and upon the
30consumers, at the rate of twenty-six percent of the cost of the
31nicotine solution products.
32b. The taxes imposed by this subsection shall not apply
33if the taxes imposed by subsection 1 on the nicotine solution
34products have been paid.
354. Any nicotine solution product with respect to which a
-31-1tax has once been imposed under this subchapter shall not again
2be subject to tax under this subchapter, except as provided in
3section 453A.40.
45. The tax imposed by this section shall not apply with
5respect to any nicotine solution product which under the
6Constitution and laws of the United States may not be made the
7subject of taxation by this state.
86. The tax imposed by this section shall be in addition to
9all other occupation or privilege taxes or license fees now or
10hereafter imposed by any city or county.
117. All excise taxes imposed on nicotine solution products
12and collected under this chapter by a distributor or any
13individual are deemed to be held in trust for the state of
14Iowa.
15 Sec. 33. NEW SECTION. 453A.43B Health promotion trust fund
16— nicotine solution products revenue — use of moneys.
171. A health promotion trust fund is created in the
18office of the treasurer of state. The fund consists of the
19revenues generated from the tax on nicotine solution products
20pursuant to section 453A.43A that are credited to the health
21promotion trust fund, annually. Moneys in the fund shall be
22separate from the general fund of the state and shall not be
23considered part of the general fund of the state. However, the
24fund shall be considered a special account for the purposes
25of section 8.53 relating to generally accepted accounting
26principles. Moneys in the fund shall be used only as specified
27in this section and shall be appropriated only for the uses
28specified. Moneys in the fund are not subject to section 8.33
29and shall not be transferred, used, obligated, appropriated,
30or otherwise encumbered, except as provided in this section.
31Notwithstanding section 12C.7, subsection 2, interest or
32earnings on moneys deposited in the fund shall be credited to
33the fund.
342. The revenue generated from the tax on nicotine solution
35products pursuant to section 453A.43A shall be credited to
-32-1the health promotion trust fund created in this section on an
2annual basis.
33. Of the revenues generated and credited to the fund on an
4annual basis, ten percent of the total amount is appropriated
5annually to the department of health and human services for
6tobacco use prevention and control efforts pursuant to chapter
7142A and ninety percent of the total amount is appropriated
8annually to the judicial branch to be used to create and
9maintain civil and criminal specialty courts involving
10individuals with substance use disorder or mental health
11issues.
12 Sec. 34. Section 453A.44, Code 2023, is amended to read as
13follows:
14453A.44 Licenses — distributors, and subjobbers.
151. No A person shall not engage in the business of a
16distributor or subjobber of tobacco products or nicotine
17solution products at any place of business without first having
18received a license from the director to engage in that business
19 as a distributor or subjobber at that place of business.
202. Every An application for such a license shall be made on
21a form prescribed by the director and shall state the all of
22the following:
23a. Thename and address of the applicant; if.
24(1) Ifthe applicant is a firm, partnership, or association,
25the name and address of each of its members; if.
26(2) Ifthe applicant is a corporation, the name and address
27of each of its officers; the.
28b. Theaddress of its the applicant’s principal place of
29business; the.
30c. Theplace where the business to be licensed is to be
31conducted; and such.
32d. Suchother information as the director may require for
33the purpose of the administration of this subchapter.
343. A person without this state who ships or transports
35tobacco products or nicotine solution products to retailers
-33-1in this state, to be sold by those retailers, may make
2application apply for a license as a distributor, be granted a
3license by the director, and thereafter be subject to all the
4provisions of this subchapter and entitled to act as a licensed
5distributor.
64. a. Each application for a distributor’s license shall
7be accompanied by a fee of one hundred dollars, except that an
8applicant holding a permit pursuant to subchapter I of this
9chapter shall not be required to pay an additional fee. The
10application shall be accompanied by a corporate surety bond
11issued by a surety licensed to do business in this state, in
12the sum of one thousand dollars, conditioned upon the true and
13faithful compliance by the distributor with all the provisions
14of this subchapter and the payment when due of all taxes,
15penalties, and accrued interest arising in the ordinary course
16of business or by reason of any delinquent money which may be
17due the state of Iowa. This The bond shall be in a form to be
18fixed by the director and approved by the attorney general.
19Whenever it is the opinion of the director that the bond given
20by a licensee is inadequate in amount to fully protect the
21state, the director shall require either an increase in the
22amount of said the bond or an additional bond, in such an
23 amount as the director deems sufficient. Any bond required by
24this subchapter, or a reissue thereof, or a substitute therefor
25 of the bond, shall be kept in full force and effect during the
26entire period covered by the license.
27b. A separate application for a license shall be made for
28each place of business where a distributor proposes to engage
29in business as such a distributor under this subchapter.
305. Each application for a subjobber’s license shall
31be accompanied by a fee of ten dollars, except that no an
32 applicant holding a permit pursuant to subchapter I of this
33chapter shall not be required to pay an additional fee.
346. A distributor or subjobber applying for a license between
35January 1 and June 30 of any year shall be required to pay only
-34-1one-half of the license fee provided for in this section.
27. The director, upon receipt of the application, and
3bond in the case of the distributor, in proper form, and
4payment of the applicable license fee required by subsection
54 or subsection 5 under this section, shall unless otherwise
6provided by this subchapter, issue the applicant a license in
7form as prescribed by the director, which. The license shall
8permit the applicant to whom it is issued to engage in business
9as a distributor or subjobber at the place of business shown in
10the application. The director shall assign a permit number to
11each person licensed as a distributor at the time of issuance
12of the person’s first license, which shall be inscribed upon
13all licenses issued to that distributor.
148. Each license shall expire on June 30 following its
15date of issue unless sooner revoked by the director or unless
16the business with respect to which the license was issued is
17transferred. In either case the holder of the license shall
18immediately surrender it to the director.
199. No A license shall not be transferable to any other
20person.
2110. The director may revoke, cancel, or suspend the license
22or licenses of any distributor or subjobber for violation of
23any of the provisions of this subchapter, or any other act
24applicable to the sale of tobacco products or nicotine solution
25products, or any rule or regulations promulgated by the
26director in furtherance of this subchapter. No A license shall
27not be revoked, canceled, or suspended except after notice and
28a hearing by the director as provided in section 453A.48.
2911. No A license shall not be issued under this
30subchapter to any person within one year of the date of final
31determination of a revocation of any previous license held by
32the person.
3312. When the surety upon any bond issued pursuant to the
34provisions of this subchapter shall have has fulfilled the
35conditions of such the bond and compensated the state for any
-35-1loss occasioned by any act or omission of the person bonded
2under this subchapter, such the surety shall be subrogated to
3all the rights of the state in connection with the transaction
4wherein such that resulted in the loss occurred.
5 Sec. 35. Section 453A.45, Code 2023, is amended to read as
6follows:
7453A.45 Licensees, duties.
81. a. Every distributor shall keep at each licensed place
9of business complete and accurate records for that place of
10business, including itemized invoices, of tobacco products
11or nicotine solution products held, purchased, manufactured,
12brought in or caused to be brought in from without the state,
13or shipped or transported to retailers in this state, and of
14all sales of tobacco products or nicotine solution products
15 made, except sales to the ultimate consumer.
16b. When a licensed distributor sells tobacco products
17or nicotine solution products exclusively to the ultimate
18consumer at the address given in the license, an invoice of
19those sales is not required, but itemized invoices shall be
20made of all tobacco products or nicotine solution products
21 transferred to other retail outlets owned or controlled by that
22licensed distributor. All books, records, and other papers
23and documents required by this subsection to be kept shall
24be preserved for a period of at least three years after the
25date of the documents or the date of the entries appearing
26in the records, unless the director, in writing, authorized
27their destruction or disposal at an earlier date. At any time
28during usual business hours, the director, or the director’s
29duly authorized agents or employees, may enter any place of
30business of a distributor, without a search warrant, and
31inspect the premises, the records required to be kept under
32this subsection, and the tobacco products or nicotine solution
33products contained therein at the place of business, to
34determine if all the provisions of full compliance with this
35subchapter are being fully complied with. If the director,
-36-1or any such agent or employee of the director, is denied
2free access or is hindered or interfered with in making the
3examination, the license of the distributor at that premises is
4subject to revocation by the director.
52. Every person who sells tobacco products or nicotine
6solution products to persons other than the ultimate consumer
7shall render with each sale itemized invoices showing the
8seller’s name and address, the purchaser’s name and address,
9the date of sale, and all prices and discounts. The person
10shall preserve legible copies of all these invoices for three
11years from the date of sale.
123. Every retailer and subjobber shall procure itemized
13invoices of all tobacco products or nicotine solution products
14 purchased. The invoices shall show the name and address of the
15seller and the date of purchase. The retailer and subjobber
16shall preserve a legible copy of each invoice for three
17years from the date of purchase. Invoices shall be available
18for inspection by the director or the director’s authorized
19agents or employees at the retailer’s or subjobber’s place of
20business.
214. Records of all deliveries or shipments of tobacco
22products or nicotine solution products from any public
23warehouse of first destination in this state which is subject
24to the provisions of and licensed under chapter 554 shall be
25kept by the warehouse and be available to the director for
26inspection. They The records shall show the name and address
27of the consignee, the date, the quantity of tobacco products
28or nicotine solution products delivered, and such other
29information as the commissioner director may require. These
30 The records shall be preserved for three years from the date of
31delivery of the tobacco products or nicotine solution products.
325. a. The transportation of tobacco products or nicotine
33solution products into this state by means other than common
34carrier must shall be reported to the director within thirty
35days with the following exceptions:
-37- 1(1) The transportation of not more than fifty cigars, not
2more than ten ounces of snuff or snuff powder, or not more
3than one pound of smoking or chewing tobacco or other tobacco
4products not specifically mentioned herein; specified in this
5subparagraph.
6(2) Transportation by a person with a place of business
7outside the state, who is licensed as a distributor under
8section 453A.44, or tobacco products or nicotine solution
9products sold by such person to a retailer in this state.
10b. The report shall be made on forms provided by the
11director. The director may require by rule that the report be
12filed by electronic transmission.
13c. Common carriers transporting tobacco products or nicotine
14solution products into this state shall file with the director
15reports of all such shipments other than those which are
16delivered to public warehouses of first destination in this
17state which are licensed under the provisions of chapter 554.
18Such The reports shall be filed on or before the tenth day of
19each month and shall show with respect to deliveries made in
20the preceding month all of the following:
21(1) The date.
22(2) The point of origin.
23(3) The point of delivery.
24(4) The name of the consignee.
25(5) A description and the quantity of tobacco products or
26nicotine solution products delivered.
27(6) Such other information as the director may require.
28d. Any person who fails or refuses to transmit to the
29director the required reports or whoever who refuses to permit
30the examination of the records by the director shall be guilty
31of a serious misdemeanor.
32 Sec. 36. Section 453A.46, Code 2023, is amended to read as
33follows:
34453A.46 Distributors, — monthly returns, — interest, and
35 penalties.
-38- 11. a. On or before the twentieth day of each calendar
2month every distributor with a place of business in this state
3shall file a return with the director showing for the preceding
4calendar month the quantity and wholesale sales price of each
5tobacco product or nicotine solution product brought, or caused
6to be brought, into this state for sale; or made, manufactured,
7or fabricated in this state for sale in this state;, and any
8other information the director may require. Every licensed
9distributor outside this state shall in like manner file a
10return with the director showing for the preceding calendar
11month the quantity and wholesale sales price of each tobacco
12product or nicotine solution product shipped or transported
13to retailers in this state to be sold by those retailers and
14any other information the director may require. Returns shall
15be made upon forms furnished or made available in electronic
16form and prescribed by the director and shall contain other
17information as the director may require. Each return shall be
18accompanied by a remittance for the full tax liability shown
19on the return, less a discount as fixed by the director not to
20exceed five percent of the tax. Within three years after the
21return is filed or within three years after the return became
22due, whichever is later, the department shall examine it the
23return, determine the correct amount of tax, and assess the
24tax against the taxpayer for any deficiency. The period for
25examination and determination of the correct amount of tax is
26unlimited in the case of a false or fraudulent return made with
27the intent to evade tax, or in the case of a failure to file a
28return.
29b. The three-year limitation period may be extended by a
30taxpayer by signing a waiver agreement form provided by the
31department. The agreement must shall stipulate the extension
32period and the tax period to which the extension applies. The
33agreement must shall also stipulate that a claim for refund
34may be filed by the taxpayer at any time during the extension
35period.
-39- 12. a. All taxes shall be due and payable not later than
2the twentieth day of the month following the calendar month in
3which they the taxes were incurred, and shall bear interest at
4the rate in effect under section 421.7 counting each fraction
5of a month as an entire month, computed from the date the tax
6was due.
7b. The director may reduce or abate interest when in
8the director’s opinion the facts warrant the reduction or
9abatement. The exercise of this power shall be subject to the
10approval of the attorney general.
113. In addition to the tax or additional tax, the taxpayer
12shall also pay a penalty as provided in section 421.27 and
13shall be subject to the civil penalties set forth specified
14 in sections 421.27; 453A.31, subsection 1, paragraph “b”; and
15453A.50, subsection 3, as applicable.
164. The department shall notify any person assessed
17pursuant to this section by sending a written notice of the
18determination by mail to the principal place of business of the
19person as shown on the person’s application for permit, and if
20an application was not filed by the person, to the person’s
21last known address. A determination by the department of
22the amount of tax, penalty, and interest due, or the amount
23of refund for excess tax paid, is final, unless the person
24aggrieved by the determination appeals to the director for a
25revision of the determination within sixty days from the date
26of the notice of determination of tax, penalty, and interest or
27refund owing or unless the taxpayer contests the determination
28by paying the tax, interest, and penalty and timely filing a
29claim for a refund. The director shall grant a hearing and
30upon the hearing, the director shall determine the correct tax,
31penalty, and interest or refund due and notify the appellant
32of the decision by mail. Judicial review of action of the
33director may be sought in accordance with chapter 17A and
34section 422.29.
355. The director may recover the amount of any tax due and
-40-1unpaid, interest, and any penalty in a civil action. The
2collection of such a tax, interest, or penalty shall not be a
3bar to any prosecution under this subchapter.
46. On or before the twentieth day of each calendar month,
5every consumer who, during the preceding calendar month, has
6acquired title to or possession of tobacco products or nicotine
7solution products for use or storage in this state, upon which
8tobacco products or nicotine solution products the tax imposed
9by section 453A.43 or section 453A.43A has not been paid, shall
10file a return with the director showing the quantity of tobacco
11products so or nicotine solution products acquired. The return
12shall be made upon a form furnished and prescribed by the
13director, and shall contain other information as the director
14may require. The return shall be accompanied by a remittance
15for the full unpaid tax liability shown by it the return.
16Within three years after the return is filed or within three
17years after the return became due, whichever is later, the
18department shall examine it the return, determine the correct
19amount of tax, and assess the tax against the taxpayer for any
20deficiency. The period for examination and determination of
21the correct amount of tax is unlimited in the case of a false or
22fraudulent return made with the intent to evade tax, or in the
23case of a failure to file a return.
247. The director may require by rule that returns be filed by
25electronic transmission.
26 Sec. 37. Section 453A.47, Code 2023, is amended to read as
27follows:
28453A.47 Refunds, and credits.
29Where tobacco products or nicotine solution products upon
30which the tax imposed by this subchapter has been reported and
31paid are shipped or transported by the distributor to consumers
32to be consumed without the state or to retailers or subjobbers
33without the state to be sold by those retailers or subjobbers
34without the state or are returned to the manufacturer by the
35distributor or destroyed by the distributor, refund of such the
-41-1 tax or credit may be made to the distributor in accordance with
2regulations prescribed by the director. Any overpayment of the
3tax imposed under section 453A.43 or section 453A.43A may be
4made to the taxpayer in accordance with regulations prescribed
5by the director. The director shall cause any such refund of
6a tax to be paid out of the general fund of the state, and so
7much of said the general fund as may be necessary is hereby
8 appropriated for that purpose.
9 Sec. 38. Section 453A.47A, Code 2023, is amended to read as
10follows:
11453A.47A Retailers — permits — fees — penalties.
121. Permits required. A person shall not engage in
13the business of a retailer of tobacco, tobacco products,
14alternative nicotine products, or vapor products, or nicotine
15solution products at any place of business, or through delivery
16sales, without first having received a permit as a retailer.
172. No sales without permit. A retailer shall not sell
18any tobacco, tobacco products, alternative nicotine products,
19or vapor products, or nicotine solution products until
20an application has been filed, and the fee prescribed for
21the permit paid, for a permit and until such the permit is
22 obtained, and only while such the permit is not suspended,
23unrevoked, or unexpired.
243. Number of permits. An application shall be filed and a
25permit obtained for each place of business owned or operated by
26a retailer located in the state. If an out-of-state retailer
27makes delivery sales of alternative nicotine products, or vapor
28products, or nicotine solution products, an application shall
29be filed with the department and a permit shall be issued for
30the out-of-state retailer’s principal place of business.
314. Retailer — multiple permits not required — effect of
32suspension. A retailer, as defined in section 453A.1, who holds
33a permit under subchapter I of this chapter is not required to
34also obtain a retail permit under this subchapter. However,
35if a retailer, as defined in section 453A.1, only holds a
-42-1permit under subchapter I of this chapter and that permit is
2suspended, revoked, or expired, the retailer shall not sell any
3tobacco, tobacco products, alternative nicotine products, or
4 vapor products, or nicotine solution products during the time
5which the permit is suspended, revoked, or expired.
65. Separate permit. A separate retail permit shall be
7required of a distributor or subjobber if the distributor or
8subjobber sells tobacco, tobacco products, alternative nicotine
9products, or vapor products, or nicotine solution products at
10retail.
116. Issuance. Cities may issue retail permits to retailers
12located within their respective limits. County boards of
13supervisors may issue retail permits to retailers located in
14their respective counties, outside of the corporate limits of
15cities. The city or county shall submit a duplicate of any
16application for a retail permit to the alcoholic beverages
17division of the department of commerce within thirty days of
18issuance of a permit. The alcoholic beverages division of the
19department of commerce shall submit the current list of all
20retail permits issued to the Iowa department of public health
21and human services by the last day of each quarter of a state
22fiscal year.
237. Fees — expiration.
24a. All permits provided for in this subchapter shall expire
25on June 30 of each year. A permit shall not be granted or
26issued until the applicant has paid the fees provided for in
27this section for the period ending June 30 next, to the city or
28county granting the permit. The fee for retail permits is as
29follows when the permit is granted during the month of July,
30August, or September:
31(1) In places outside any city, fifty dollars.
32(2) In cities of less than fifteen thousand population,
33seventy-five dollars.
34(3) In cities of fifteen thousand or more population, one
35hundred dollars.
-43- 1b. If any permit is granted during the month of October,
2November, or December, the fee shall be three-fourths of the
3above maximum schedule; if granted during the month of January,
4February, or March, one-half of the maximum schedule; and if
5granted during the month of April, May, or June, one-fourth of
6the maximum schedule.
78. Refunds.
8a. An unrevoked permit for which the retailer paid the full
9annual fee may be surrendered during the first nine months of
10the year to the officer issuing it, and the city or county
11granting the permit shall make refunds to the retailer as
12follows:
13(1) Three-fourths of the annual fee if the surrender is made
14during July, August, or September.
15(2) One-half of the annual fee if the surrender is made
16during October, November, or December.
17(3) One-fourth of the annual fee if the surrender is made
18during January, February, or March.
19b. An unrevoked permit for which the retailer has paid
20three-fourths of a full annual fee may be surrendered during
21the first six months of the period covered by the payment,
22and the city or county shall make refunds to the retailer as
23follows:
24(1) A sum equal to one-half of an annual fee if the
25surrender is made during October, November, or December.
26(2) A sum equal to one-fourth of an annual fee if the
27surrender is made during January, February, or March.
28c. An unrevoked permit for which the retailer has paid
29one-half of a full annual fee may be surrendered during the
30first three months of the period covered by the payment, and
31the city or county shall refund to the retailer a sum equal to
32one-fourth of an annual fee.
339. Application. Retail permits shall be issued only upon
34applications, accompanied by the fee indicated above under
35this section, made upon forms furnished by the department upon
-44-1written request. The failure to furnish such the forms shall
2not be no an excuse for the failure to file the form unless
3absolute refusal is shown. The forms shall specify:
4a. The manner under which the retailer transacts or intends
5to transact business as a retailer.
6b. The principal office, residence, and place of business,
7for which the permit is to apply applies.
8c. If the applicant is not an individual, the principal
9officers or members of the applicant, not to exceed three, and
10their addresses.
11d. Such other information as the director shall by rules
12prescribe prescribes by rule.
1310. Records and reports of retailers.
14a. The director shall prescribe the forms necessary for
15the efficient administration of this section and may require
16uniform books and records to be used and kept by each retailer
17or other person as deemed necessary.
18b. Every retailer shall, when requested by the department,
19make additional reports as the department deems necessary and
20proper and shall at the request of the department furnish full
21and complete information pertaining to any transaction of the
22retailer involving the purchase or sale or use of tobacco,
23tobacco products, alternative nicotine products, or vapor
24products, or nicotine solution products.
2511. Penalties. The permit suspension and revocation
26provisions and the civil penalties established in section
27453A.22 shall apply to retailers under this subchapter, in
28addition to any other penalties imposed under this subchapter.
29 Sec. 39. Section 453A.47B, Code 2023, is amended to read as
30follows:
31453A.47B Requirements for mailing or shipping — alternative
32nicotine products, or vapor products, or nicotine solution
33products.
34A retailer shall not mail, ship, or otherwise cause to be
35delivered any alternative nicotine product, or vapor product,
-45-1or nicotine solution product in connection with a delivery sale
2unless the retailer meets all of the following conditions:
31. Prior to sale to the purchaser, the retailer verifies
4that the purchaser is at least twenty-one years of age through
5or by one of the following:
6a. A commercially available database, or aggregate of
7databases, that is regularly used by government and businesses
8for the purpose of age and identity verification.
9b. Obtaining a copy of a valid government-issued document
10that provides the name, address, and date of birth of the
11purchaser.
122. The retailer uses a method of mailing, shipping, or
13delivery that requires the signature of a person who is at
14least twenty-one years of age before the shipping package is
15released to the purchaser.
16 Sec. 40. Section 453A.47C, Code 2023, is amended to read as
17follows:
18453A.47C Sales and use tax on delivery sales — alternative
19nicotine products, or vapor products, or nicotine solution
20products.
211. A delivery sale of alternative nicotine products, or
22 vapor products, or nicotine solution products within this state
23shall be subject to the sales tax provided in chapter 423,
24subchapter II.
252. The use in this state of alternative nicotine products,
26 or vapor products, or nicotine solution products purchased for
27use in this state through a delivery sale shall be subject to
28the use tax provided in chapter 423, subchapter III.
293. A retailer required to possess or possessing a permit
30under section 453A.13 or 453A.47A to make delivery sales of
31alternative nicotine products, or vapor products, or nicotine
32solution products within this state shall be deemed to have
33waived all claims that such retailer lacks physical presence
34within this state for purposes of collecting and remitting
35sales and use tax.
-46- 14. A retailer making taxable delivery sales of alternative
2nicotine products, or vapor products, or nicotine solution
3product within this state shall remit to the department all
4sales and use tax due on such sales at the times and in the
5manner provided by chapter 423.
65. The director shall adopt rules pursuant to chapter 17A to
7administer this section.
8 Sec. 41. Section 453A.48, Code 2023, is amended to read as
9follows:
10453A.48 Investigations, and hearings, and testimonial powers.
111. The director, or the director’s duly authorized agents,
12 may conduct investigations, inquiries, and hearings for the
13purpose of enforcing the provisions of this subchapter, and, in
14connection with such investigations, inquiries, and hearings,
15the director and the director’s duly authorized agents shall
16have all the powers conferred upon the director and the
17director’s examiners by Iowa statutes law, and the provisions
18of such these laws shall apply to all such investigations,
19inquiries, and hearings.
202. A hearing conducted under this subchapter shall be
21preceded by ten days’ notice in writing of the subject of the
22hearing, including, in the case of suspension or revocation of
23a license, a statement of the nature of the charges against
24the licensee. The notice shall be sent by mail to the last
25known address of the licensee or other person involved in the
26hearing, and the service shall be complete upon mailing. After
27every hearing the director shall make the director’s written
28 findings and an order in writing. The findings and order shall
29be filed in the office of the director, and a copy sent by mail
30or otherwise to the person to whom the notice was directed.
313. The director may exchange information with the officers
32and agencies of other states administering laws relating to the
33taxation of tobacco products or nicotine solution products.
344. No A person shall not be excused from testifying or
35from producing, pursuant to a subpoena, any books, papers,
-47-1records, or memoranda in any investigation or upon any hearing,
2upon the ground that the testimony or evidence, documentary or
3otherwise, may tend to incriminate the person or subject the
4person to a criminal penalty, but no. However, a person shall
5not be prosecuted or subjected to any criminal penalty for or
6on account of any transaction made or thing concerning which
7the person may testify or produce evidence, documentary or
8otherwise, before the director or an employee or agent thereof
9 of the director; provided that such immunity shall extend only
10to a natural person who, in obedience to a subpoena, gives
11testimony under oath or produces evidence, documentary or
12otherwise, pursuant to a subpoena. No A person so testifying
13in response to a subpoena shall not be exempt from prosecution
14and punishment for perjury committed in so testifying.
155. Any person aggrieved by an order of the director fixing
16a tax, penalty, or interest under section 453A.43 or section
17453A.43A may, within sixty days from the date of notice of the
18order, appeal to the board of review in the manner provided
19by law or unless the taxpayer contests the determination by
20paying the tax, interest, and penalty and timely filing a
21claim for refund. Judicial review of any other action of the
22director may be sought in accordance with the terms of the Iowa
23administrative procedure Act, chapter 17A.
24 Sec. 42. Section 453A.51, Code 2023, is amended to read as
25follows:
26453A.51 Assessment of cost of audit.
27The department may employ auditors or other persons to
28audit and examine the books and records of a permit holder or
29other person dealing in tobacco products or nicotine solution
30products to ascertain whether the permit holder or other person
31has paid the amount of the taxes required to be paid by the
32permit holder or other person under the provisions of this
33chapter. If the taxes have not been paid, as required, the
34department shall assess against the permit holder or other
35person, as an additional penalty, the reasonable expenses and
-48-1costs of the investigation and audit.
2 Sec. 43. Section 805.8C, subsection 3, Code 2023, is amended
3to read as follows:
43. Violations related to smoking, tobacco, tobacco products,
5alternative nicotine products, vapor products, nicotine solution
6products, and cigarettes.
7a. For violations described in section 142D.9, subsection 1,
8the scheduled fine is fifty dollars, and is a civil penalty,
9and the crime services surcharge under section 911.1 shall
10not be added to the penalty, and the court costs pursuant
11to section 805.9, subsection 6, shall not be imposed. If
12the civil penalty assessed for a violation described in
13section 142D.9, subsection 1, is not paid in a timely manner,
14a citation shall be issued for the violation in the manner
15provided in section 804.1. However, a person under age
16eighteen shall not be detained in a secure facility for failure
17to pay the civil penalty. The complainant shall not be charged
18a filing fee.
19b. For violations of section 453A.2, subsection 1, by an
20employee of a retailer, the scheduled fine is as follows:
21(1) If the violation is a first offense, the scheduled fine
22is one hundred thirty-five dollars.
23(2) If the violation is a second offense, the scheduled fine
24is three hundred twenty-five dollars.
25(3) If the violation is a third or subsequent offense, the
26scheduled fine is six hundred forty-five dollars.
27c. For violations of section 453A.2, subsection 2, the
28scheduled fine is as follows and is a civil penalty, and the
29crime services surcharge under section 911.1 shall not be added
30to the penalty, and the court costs pursuant to section 805.9,
31subsection 6, shall not be imposed:
32(1) If the violation is a first offense, the scheduled fine
33is seventy dollars.
34(2) If the violation is a second offense, the scheduled fine
35is one hundred thirty-five dollars.
-49- 1(3) If the violation is a third or subsequent offense, the
2scheduled fine is three hundred twenty-five dollars.
3EXPLANATION
4The inclusion of this explanation does not constitute agreement with
5the explanation’s substance by the members of the general assembly.
6This bill imposes a tax on nicotine solution products
7and requires the licensing of nicotine solution products
8distributors, subjobbers, retailers, and delivery sale
9retailers, similar to the licensing of tobacco product
10distributors, subjobbers, retailers, and delivery sale
11retailers.
12The bill defines “nicotine solution product” as any
13cartridge, bottle, or other package that contains nicotine,
14including nicotine made or derived from tobacco or sources
15other than tobacco, in a solution or other substance that is
16consumed or meant to be consumed through the use of a heating
17element, power source, electronic circuit, or other electronic,
18chemical, or mechanical means that produces vapor or aerosol.
19“Nicotine solution product” includes any alternative nicotine
20product, vapor product, or other product that contains an
21integrated, nonrefillable or nonreusable nicotine solution
22product component.
23The bill imposes a tax upon all nicotine solution products
24in this state and upon any person engaged in business as a
25distributor of nicotine solution products, at the rate of 26
26percent of the wholesale sales price of the nicotine solution
27product. The tax is imposed at the time the distributor brings
28or causes to be brought into the state from outside the state
29nicotine solution products for sale; makes, manufactures, or
30fabricates nicotine solution products in the state for sale in
31this state; or ships or transports nicotine solution products
32to retailers in this state, to be sold by those retailers. The
33tax is also imposed upon the use or storage by consumers of
34nicotine solution products in this state and upon the consumers
35at the rate of 26 percent of the cost of the nicotine solution
-50-1products. The tax on consumers does not apply if the taxes
2imposed on distributors for the nicotine solution products have
3been paid.
4The bill creates a health promotion trust fund in the office
5of the treasurer of state. The fund consists of the revenues
6generated from the tax on nicotine solution products that
7are credited to the health promotion trust fund, annually.
8Moneys in the fund are separate from the general fund of the
9state, are to be used only as specified in the bill, and are
10appropriated only for the uses specified. Moneys in the fund
11are not subject to reversion, and interest or earnings on
12moneys deposited in the fund shall be credited to the fund.
13Revenue generated from the tax on nicotine solution products
14shall be credited to the health promotion trust fund on an
15annual basis. Of the revenues generated and credited to the
16fund on an annual basis, 10 percent of the total amount is
17appropriated annually to the department of health and human
18services for tobacco use prevention and control efforts
19pursuant to Code chapter 142A and 90 percent of the total
20amount is appropriated annually to the judicial branch to be
21used to create and maintain civil and criminal specialty courts
22involving individuals with substance use disorder or mental
23health issues.
24The bill makes applicable to delivery sales of nicotine
25solution products, provisions that are applicable to delivery
26sales of alternative nicotine products and vapor products,
27including the imposition of sales and use taxes.
28The bill also makes applicable to nicotine solution products
29provisions similarly applicable to the use, sale, and taxation
30of tobacco products including required maintenance of itemized
31invoices, records, and reports; filing of monthly returns
32and the tax liability; imposition of interest and penalties;
33refunds and credits; inventory tax provisions; criminal and
34civil penalties; auditing and auditing costs; and seizure
35and forfeiture of products in the control of a person that
-51-1are being sold, distributed, removed, or otherwise used in
2violation of the bill.
3The bill also makes applicable to nicotine solution
4products, provisions and penalties under Code chapter 453A
5relating to the sale or other provision to, or the purchase or
6other use or possession by, persons under 21 years of age of
7cigarettes, tobacco products, and other products; the giving
8away of samples of cigarettes, tobacco products, and other
9products to persons under 21 years of age near locations used
10by persons primarily under 21 years of age; and self-service
11sales of cigarettes, tobacco products, and other products.
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