House File 215 - Introduced
HOUSE FILE
BY SCHICKEL, TJEPKES, TOMENGA,
RAYHONS, WESSEL=KROESCHELL,
SHOULTZ, FOEGE, and WENDT
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act increasing the taxes imposed on cigarettes and tobacco
2 products and providing for appropriation of the increased
3 revenue generated to the medical assistance program and for
4 tobacco control and prevention, and providing an effective
5 date.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
7 TLSB 1935YH 81
8 pf/gg/14
PAG LIN
1 1 Section 1. Section 453A.6, subsection 1, Code 2005, is
1 2 amended to read as follows:
1 3 1. There is imposed, and shall be collected and paid to
1 4 the department, the following taxes on all cigarettes used or
1 5 otherwise disposed of in this state for any purpose
1 6 whatsoever:
1 7 a. CLASS A.
1 8 (1) On cigarettes weighing not more than three pounds per
1 9 thousand, eighteen mills one and eight=tenths cents on each
1 10 such cigarette.
1 11 (2) In addition to the tax imposed in subparagraph (1), on
1 12 cigarettes weighing not more than three pounds per thousand,
1 13 five cents on each cigarette.
1 14 b. CLASS B.
1 15 (1) On cigarettes weighing more than three pounds per
1 16 thousand, eighteen mills one and eight=tenths cents on each
1 17 such cigarette.
1 18 (2) In addition to the tax imposed in subparagraph (1), on
1 19 cigarettes weighing more than three pounds per thousand, five
1 20 cents on each cigarette.
1 21 Sec. 2. Section 453A.35, Code 2005, is amended to read as
1 22 follows:
1 23 453A.35 TAX AND FEES PAID TO GENERAL FUND.
1 24 The proceeds derived from the sale of stamps and the
1 25 payment of taxes, fees and penalties provided for under this
1 26 chapter, and the permit fees received from all permits issued
1 27 by the department, with the exception of the proceeds derived
1 28 from payment of taxes pursuant to section 453A.6, subsection
1 29 1, paragraph "a", subparagraph (2); section 453A.6, subsection
1 30 1, paragraph "b", subparagraph (2); section 453A.43,
1 31 subsection 1, paragraph "b"; and section 453A.43, subsection
1 32 2, paragraph "b", shall be credited to the general fund of the
1 33 state. All permit fees provided for in this chapter and
1 34 collected by cities in the issuance of permits granted by the
1 35 cities shall be paid to the treasurer of the city where the
2 1 permit is effective, or to another city officer as designated
2 2 by the council, and credited to the general fund of the city.
2 3 Permit fees so collected by counties shall be paid to the
2 4 county treasurer.
2 5 Sec. 3. NEW SECTION. 453A.35A MEDICAL ASSISTANCE FUND ==
2 6 TAX REVENUE DEPOSITED == APPROPRIATION.
2 7 1. There is created in the office of the treasurer of
2 8 state a medical assistance fund. The fund consists of the
2 9 revenues generated from the taxes imposed on cigarettes and
2 10 tobacco products pursuant to section 453A.6, subsection 1,
2 11 paragraph "a", subparagraph (2); section 453A.6, subsection 1,
2 12 paragraph "b", subparagraph (2); section 453A.43, subsection
2 13 1, paragraph "b"; and section 453A.43, subsection 2, paragraph
2 14 "b". Moneys in the fund shall be used only as specified in
2 15 this section and are appropriated for the uses specified.
2 16 Moneys deposited in the fund shall not be transferred, used,
2 17 obligated, appropriated, or otherwise encumbered, except as
2 18 provided in this section. Any unexpended balance in the fund
2 19 and any interest or earnings on investments or time deposits
2 20 of the moneys in the fund at the end of a fiscal year shall be
2 21 deposited in the general fund of the state.
2 22 2. Moneys in the fund are appropriated for the fiscal year
2 23 beginning July 1, 2006, and for each fiscal year thereafter,
2 24 as follows:
2 25 a. To the department of human services, an amount
2 26 necessary, annually, for expenses incurred under the medical
2 27 assistance program.
2 28 b. To the Iowa department of public health, an amount
2 29 necessary, annually, for expenses relating to tobacco control
2 30 and prevention within the state.
2 31 Sec. 4. Section 453A.43, subsections 1 and 2, Code 2005,
2 32 are amended to read as follows:
2 33 1. a. A tax is imposed upon all tobacco products in this
2 34 state and upon any person engaged in business as a distributor
2 35 of tobacco products, at the rate of twenty=two percent of the
3 1 wholesale sales price of the tobacco products, except little
3 2 cigars as defined in section 453A.42.
3 3 b. In addition to the tax imposed under paragraph "a", a
3 4 tax is imposed upon all tobacco products in this state and
3 5 upon any person engaged in business as a distributor of
3 6 tobacco products, at the rate of thirty=three percent of the
3 7 wholesale sales price of the tobacco products, except little
3 8 cigars as defined in section 453A.42.
3 9 c. Little cigars shall be subject to the same rate of tax
3 10 imposed upon cigarettes in section 453A.6, payable at the time
3 11 and in the manner provided in section 453A.6; and stamps shall
3 12 be affixed as provided in division I of this chapter.
3 13 d. The tax taxes on tobacco products, excluding little
3 14 cigars, shall be imposed at the time the distributor does any
3 15 of the following:
3 16 a. (1) Brings, or causes to be brought, into this state
3 17 from without the state tobacco products for sale.
3 18 b. (2) Makes, manufactures, or fabricates tobacco
3 19 products in this state for sale in this state.
3 20 c. (3) Ships or transports tobacco products to retailers
3 21 in this state, to be sold by those retailers.
3 22 2. a. A tax is imposed upon the use or storage by
3 23 consumers of tobacco products in this state, and upon the
3 24 consumers, at the rate of twenty=two percent of the cost of
3 25 the tobacco products.
3 26 b. In addition to the tax imposed in paragraph "a", a tax
3 27 is imposed upon the use or storage by consumers of tobacco
3 28 products in this state, and upon the consumers, at a rate of
3 29 thirty=three percent of the cost of the tobacco products.
3 30 c. The tax taxes imposed by this subsection shall not
3 31 apply if the tax taxes imposed by subsection 1 on the tobacco
3 32 products has have been paid.
3 33 d. This tax The taxes imposed under this subsection shall
3 34 not apply to the use or storage of tobacco products in
3 35 quantities of:
4 1 a. (1) Less than 25 cigars.
4 2 b. (2) Less than 10 oz. snuff or snuff powder.
4 3 c. (3) Less than 1 lb. smoking or chewing tobacco or
4 4 other tobacco products not specifically mentioned herein, in
4 5 the possession of any one consumer.
4 6 Sec. 5. EFFECTIVE DATE. This Act, being deemed of
4 7 immediate importance, takes effect on the first day of the
4 8 month that begins following enactment.
4 9 EXPLANATION
4 10 This bill relates to an increase in the taxes imposed on
4 11 cigarettes and tobacco products and to the deposit and
4 12 appropriation of the increased revenue generated.
4 13 The bill provides for a tax on cigarettes, in addition to
4 14 the tax of 18 mills (1.8 cents) imposed on each cigarette, of
4 15 5 cents on each cigarette. The effect of the bill is to
4 16 increase the tax on a pack of 20 cigarettes from 36 cents per
4 17 pack to $1.36 per pack.
4 18 The bill also provides for a tax on tobacco products, in
4 19 addition to the 22 percent of the wholesale sales price for
4 20 distributors and 22 percent of the cost of tobacco products
4 21 for the use or storage by consumers of tobacco products, of 33
4 22 percent of the wholesale sales price and the cost.
4 23 The bill provides that the additional revenue generated
4 24 (the 5 cents per cigarette and the 33 percent on tobacco
4 25 products) is to be deposited in the medical assistance fund
4 26 created in the bill. The bill provides that moneys in the
4 27 medical assistance fund are appropriated for the fiscal year
4 28 beginning July 1, 2006, and annually thereafter, to the
4 29 department of human services, an amount necessary, annually,
4 30 for expenses incurred under the medical assistance program and
4 31 to the Iowa department of public health, an amount necessary,
4 32 annually, for expenses relating to tobacco control and
4 33 prevention within the state.
4 34 LSB 1935YH 81
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