Senate File 130 - Introduced
SENATE FILE
BY DVORSKY, MULDER, HATCH,
and TINSMAN
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to an increase in the taxes on cigarettes and
2 tobacco products, creating a medical assistance and health
3 promotion fund, providing for appropriations, and providing an
4 effective date.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
6 TLSB 2208SS 81
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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 a tax on all cigarettes
1 5 used or otherwise disposed of in this state for any purpose
1 6 whatsoever:
1 7 CLASS A. On cigarettes weighing not more than three pounds
1 8 per thousand, eighteen mills on each such cigarette.
1 9 CLASS B. On cigarettes weighing more than three pounds per
1 10 thousand, eighteen mills on each such equal to six and eight=
1 11 tenths cents on each cigarette.
1 12 Sec. 2. Section 453A.35, Code 2005, is amended to read as
1 13 follows:
1 14 453A.35 TAX TAXES AND FEES PAID TO GENERAL FUND ==
1 15 EXCEPTIONS.
1 16 The proceeds derived from the sale of stamps and the
1 17 payment of taxes, fees, and penalties provided for under this
1 18 chapter, with the exception of taxes paid on cigarettes
1 19 pursuant to section 453A.6 and on tobacco products pursuant to
1 20 section 453A.43, and the permit fees received from all permits
1 21 issued by the department, shall be credited to the general
1 22 fund of the state. All taxes paid on cigarettes pursuant to
1 23 section 453A.6 and on tobacco products pursuant to section
1 24 453A.43 shall be credited to the medical assistance and health
1 25 promotion fund created pursuant to section 453A.35A. All
1 26 permit fees provided for in this chapter and collected by
1 27 cities in the issuance of permits granted by the cities shall
1 28 be paid to the treasurer of the city where the permit is
1 29 effective, or to another city officer as designated by the
1 30 council, and credited to the general fund of the city. Permit
1 31 fees so collected by counties shall be paid to the county
1 32 treasurer.
1 33 Sec. 3. NEW SECTION. 453A.35A MEDICAL ASSISTANCE AND
1 34 HEALTH PROMOTION FUND == CREATED == APPROPRIATIONS.
1 35 1. A medical assistance and health promotion fund is
2 1 created in the office of the treasurer of state. The fund
2 2 consists of the revenues generated from the tax imposed on
2 3 cigarettes pursuant to section 453A.6 and the tax imposed on
2 4 tobacco products pursuant to section 453A.43. Moneys in the
2 5 fund shall be used only as specified in this section. Moneys
2 6 deposited in the fund shall not be transferred, used,
2 7 obligated, appropriated, or otherwise encumbered except as
2 8 provided in this section. Notwithstanding section 8.33, any
2 9 unexpended balance in the fund at the end of the fiscal year
2 10 shall be retained in the fund. Notwithstanding section 12C.7,
2 11 subsection 2, interest or earnings on investments or time
2 12 deposits on the moneys in the fund shall be credited to the
2 13 fund.
2 14 2. Moneys in the fund are appropriated for the fiscal year
2 15 beginning July 1, 2005, and annually thereafter, as follows:
2 16 a. To the department of human services, an amount
2 17 sufficient to supplement general fund expenditures for the
2 18 medical assistance program.
2 19 b. If there is a remaining balance in the fund after
2 20 expenditures are made pursuant to paragraph "a", to the Iowa
2 21 department of public health, an amount sufficient for health
2 22 promotion activities, including comprehensive substance abuse
2 23 treatment efforts.
2 24 Sec. 4. Section 453A.40, subsection 1, Code 2005, is
2 25 amended to read as follows:
2 26 1. All of the following persons shall be subject to an
2 27 inventory tax on the following items as provided in this
2 28 section:
2 29 a. All persons required to obtain a permit or to be
2 30 licensed under section 453A.13 as distributors or 453A.44,
2 31 having in their possession and held for resale on the
2 32 effective date of an increase in the tax rate cigarettes, or
2 33 little cigars, or tobacco products upon which the tax under
2 34 section 453A.6 or 453A.43 has been paid, unused cigarette tax
2 35 stamps which have been paid for under section 453A.8, or
3 1 unused metered imprints which have been paid for under section
3 2 453A.12 shall be subject to an inventory tax on the items as
3 3 provided in this section.
3 4 b. All consumers having for use or storage on the
3 5 effective date of an increase in the tax rate, tobacco
3 6 products upon which the tax under section 453A.43 has been
3 7 paid.
3 8 c. All consumers subject to section 453A.46, subsection 6,
3 9 who have acquired title to or possession of tobacco products
3 10 for storage in this state, upon which tobacco products the tax
3 11 imposed by section 453A.43 has not been paid.
3 12 Sec. 5. Section 453A.43, subsections 1, 2, and 3, Code
3 13 2005, are amended to read as follows:
3 14 1. A tax is imposed upon all tobacco products in this
3 15 state and upon any person engaged in business as a distributor
3 16 of tobacco products, at the rate of twenty=two fifty=five
3 17 percent of the wholesale sales price of the tobacco products,
3 18 except little cigars as defined in section 453A.42. Little
3 19 cigars shall be subject to the same rate of tax imposed upon
3 20 cigarettes in section 453A.6, payable at the time and in the
3 21 manner provided in section 453A.6; and stamps shall be affixed
3 22 as provided in division I of this chapter. The tax on tobacco
3 23 products, excluding little cigars, shall be imposed at the
3 24 time the distributor does any of the following:
3 25 a. Brings, or causes to be brought, into this state from
3 26 without the state tobacco products for sale.
3 27 b. Makes, manufactures, or fabricates tobacco products in
3 28 this state for sale in this state.
3 29 c. Ships or transports tobacco products to retailers in
3 30 this state, to be sold by those retailers.
3 31 2. A tax is imposed upon the use or storage by consumers
3 32 of tobacco products in this state, and upon the consumers, at
3 33 the rate of twenty=two fifty=five percent of the cost of the
3 34 tobacco products.
3 35 The tax imposed by this subsection shall not apply if the
4 1 tax imposed by subsection 1 on the tobacco products has been
4 2 paid.
4 3 This tax shall not apply to the use or storage of tobacco
4 4 products in quantities of:
4 5 a. Less than 25 cigars.
4 6 b. Less than 10 oz. snuff or snuff powder.
4 7 c. Less than 1 lb. smoking or chewing tobacco or other
4 8 tobacco products not specifically mentioned herein, in the
4 9 possession of any one consumer.
4 10 3. Any tobacco product with respect to which a tax has
4 11 once been imposed under this division shall not again be
4 12 subject to tax under said this division, except as provided in
4 13 section 453A.40.
4 14 Sec. 6. EFFECTIVE DATE. This Act takes effect on the
4 15 first day of the month following enactment.
4 16 EXPLANATION
4 17 This bill increases the tax on cigarettes and little cigars
4 18 from 36 cents to $1.36 per package of 20 cigarettes or little
4 19 cigars and on tobacco products from 22 percent to 55 percent
4 20 of the wholesale price. The bill subjects tobacco products to
4 21 an inventory tax which is imposed when the tax rate is
4 22 increased. The bill also creates a medical assistance and
4 23 health promotion fund. Revenues generated from imposition of
4 24 the taxes on cigarettes and tobacco products are to be
4 25 deposited in the fund and are appropriated annually for
4 26 supplementation of the expenditures for the medical assistance
4 27 program and for health promotion efforts.
4 28 The bill takes effect the first day of the month following
4 29 enactment.
4 30 LSB 2208SS 81
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