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House File 733 - IntroducedA Bill ForAn Act 1relating to cigarettes and tobacco products, including
2increased taxation of such products.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 453A.6, subsection 1, Code 2021, is
2amended to read as follows:
31. There is imposed, and shall be collected and paid to the
4department, a tax on all cigarettes used or otherwise disposed
5of in this state for any purpose equal to six and eight-tenths
6 nine and three-tenths cents on each cigarette.
7 Sec. 2. Section 453A.6, subsection 8, paragraph a, Code
82021, is amended to read as follows:
9a. Pay directly to the department, in lieu of the tax
10under subsection 1, a tax equal to three and six hundredths
11 five-tenths cents on each cigarette dispensed from such
12machine.
13 Sec. 3. Section 453A.43, Code 2021, is amended to read as
14follows:
15453A.43 Tax on tobacco products.
161. a. A tax is imposed upon all tobacco products in this
17state and upon any person engaged in business as a distributor
18of tobacco products, at the rate of twenty-two fifty-five and
19six-tenths percent of the wholesale sales price of the tobacco
20products, except little cigars and snuff as defined in section
21453A.42. Notwithstanding the rate of the tax imposed under
22this paragraph “a” on tobacco products, little cigars shall
23be subject to the tax as specified pursuant to paragraph “b”,
24and snuff shall be subject to the tax as specified pursuant to
25paragraph “c”.
26b. In addition to the tax imposed under paragraph “a”, a
27tax is imposed upon all tobacco products in this state and upon
28any person engaged in business as a distributor of tobacco
29products, at the rate of twenty-eight percent of the wholesale
30sales price of the tobacco products, except little cigars and
31snuff as defined in section 453A.42.
32c. Notwithstanding the rate of tax imposed pursuant to
33paragraphs “a” and “b”, if the tobacco product is a cigar, the
34total amount of the tax imposed pursuant to paragraphs “a” and
35“b” combined shall not exceed fifty cents per cigar.
-1- 1d. b. Little cigars shall be subject to the same rate of
2tax imposed upon cigarettes in section 453A.6, payable at the
3time and in the manner provided in section 453A.6; and stamps
4shall be affixed as provided in subchapter I of this chapter.
5c. Snuff shall be subject to the tax as provided in
6subsections 3 and 4.
7e. d. The taxes on tobacco products, excluding little
8cigars and snuff, shall be imposed at the time the distributor
9does any of the following:
10(1) Brings, or causes to be brought, into this state from
11outside the state tobacco products for sale.
12(2) Makes, manufactures, or fabricates tobacco products in
13this state for sale in this state.
14(3) Ships or transports tobacco products to retailers in
15this state, to be sold by those retailers.
162. a. A tax is imposed upon the use or storage by consumers
17of tobacco products in this state, and upon the consumers, at
18the rate of twenty-two fifty-five and six-tenths percent of the
19cost of the tobacco products.
20b. In addition to the tax imposed in paragraph “a”, a tax
21is imposed upon the use or storage by consumers of tobacco
22products in this state, and upon the consumers, at a rate of
23twenty-eight percent of the cost of the tobacco products.
24c. Notwithstanding the rate of tax imposed pursuant to
25paragraphs “a” and “b”, if the tobacco product is a cigar, the
26total amount of the tax imposed pursuant to paragraphs “a” and
27“b” combined shall not exceed fifty cents per cigar.
28d. b. The taxes imposed by this subsection shall not apply
29if the taxes imposed by subsection 1 on the tobacco products
30have been paid.
31e. c. The taxes imposed under this subsection shall not
32apply to the use or storage of tobacco products in quantities
33of:
34(1) Less than twenty-five cigars.
35(2) Less than one pound smoking or chewing tobacco or other
-2-1tobacco products not specifically mentioned herein in this
2chapter, in the possession of any one consumer.
33. A tax is imposed upon all snuff in this state and upon
4any person engaged in business as a distributor of snuff at
5the rate of one dollar and nineteen cents per ounce, with a
6proportionate tax at the same rate on all fractional parts
7of an ounce of snuff fifty-five and six-tenths percent of
8the wholesale sales price or an amount equal to the tax
9on cigarettes pursuant to section 453A.6 for each one and
10two-tenths ounces of snuff, whichever is higher. The tax shall
11be computed based on the net weight listed by the manufacturer.
12The tax on snuff shall be imposed at the time the distributor
13does any of the following:
14a. Brings or causes to be brought into this state from
15outside the state, snuff for sale.
16b. Makes, manufactures, or fabricates snuff in this state
17for sale in this state.
18c. Ships or transports snuff to retailers in this state, to
19be sold by those retailers.
204. a. A tax is imposed upon the use or storage by consumers
21of snuff in this state, and upon the consumers, at the rate of
22one dollar and nineteen cents per ounce with a proportionate
23tax at the same rate on all fractional parts of an ounce of
24snuff fifty-five and six-tenths percent of the wholesale sales
25price or an amount equal to the tax on cigarettes pursuant to
26section 453A.6 for each one and two-tenths ounces of snuff,
27whichever is higher. The tax shall be computed based on the
28net weight as listed by the manufacturer.
29b. The tax imposed by this subsection shall not apply if the
30tax imposed by subsection 3 on snuff has been paid.
31c. The tax shall not apply to the use or storage of snuff in
32quantities of less than ten ounces.
335. Any tobacco product with respect to which a tax has once
34been imposed under this subchapter shall not again be subject
35to tax under this subchapter, except as provided in section
-3-1453A.40.
26. The tax imposed by this section shall not apply with
3respect to any tobacco product which under the Constitution
4and laws of the United States may not be made the subject of
5taxation by this state.
67. The tax imposed by this section shall be in addition to
7all other occupation or privilege taxes or license fees now or
8hereafter imposed by any city or county.
98. All excise taxes collected under this chapter by a
10distributor or any individual are deemed to be held in trust
11for the state of Iowa.
12EXPLANATION
13The inclusion of this explanation does not constitute agreement with
14the explanation’s substance by the members of the general assembly.
15This bill relates to the taxes on cigarettes and tobacco
16products. The bill increases the tax on cigarettes and tobacco
17products that is equivalent on all products to a tax of $1.86
18on a pack of cigarettes.
19The bill increases the tax imposed on cigarettes from six
20and eight-tenths cents to nine and three-tenths cents on each
21cigarette, or from $1.36 to $1.86 per pack of 20 cigarettes.
22The bill increases the tax on cigarettes assembled using
23loose tobacco products that are inserted into a vending
24machine from which assembled cigarettes are dispensed from
25three and six-hundredths cents to three and five-tenths cents,
26which increases the tax on these items in an amount, based on
27the weight of tobacco used for each cigarette, which is in
28proportion to the increase in the tax on packaged cigarettes.
29The bill increases the tax on tobacco products from 50
30percent of the wholesale sales price to 55.6 percent of the
31wholesale sales price. The bill eliminates the cap on the tax
32for cigars which was 50 cents per cigar.
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2increased taxation of such products.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 453A.6, subsection 1, Code 2021, is
2amended to read as follows:
31. There is imposed, and shall be collected and paid to the
4department, a tax on all cigarettes used or otherwise disposed
5of in this state for any purpose equal to six and eight-tenths
6 nine and three-tenths cents on each cigarette.
7 Sec. 2. Section 453A.6, subsection 8, paragraph a, Code
82021, is amended to read as follows:
9a. Pay directly to the department, in lieu of the tax
10under subsection 1, a tax equal to three and six hundredths
11 five-tenths cents on each cigarette dispensed from such
12machine.
13 Sec. 3. Section 453A.43, Code 2021, is amended to read as
14follows:
15453A.43 Tax on tobacco products.
161. a. A tax is imposed upon all tobacco products in this
17state and upon any person engaged in business as a distributor
18of tobacco products, at the rate of twenty-two fifty-five and
19six-tenths percent of the wholesale sales price of the tobacco
20products, except little cigars and snuff as defined in section
21453A.42. Notwithstanding the rate of the tax imposed under
22this paragraph “a” on tobacco products, little cigars shall
23be subject to the tax as specified pursuant to paragraph “b”,
24and snuff shall be subject to the tax as specified pursuant to
25paragraph “c”.
26b. In addition to the tax imposed under paragraph “a”, a
27tax is imposed upon all tobacco products in this state and upon
28any person engaged in business as a distributor of tobacco
29products, at the rate of twenty-eight percent of the wholesale
30sales price of the tobacco products, except little cigars and
31snuff as defined in section 453A.42.
32c. Notwithstanding the rate of tax imposed pursuant to
33paragraphs “a” and “b”, if the tobacco product is a cigar, the
34total amount of the tax imposed pursuant to paragraphs “a” and
35“b” combined shall not exceed fifty cents per cigar.
-1- 1d. b. Little cigars shall be subject to the same rate of
2tax imposed upon cigarettes in section 453A.6, payable at the
3time and in the manner provided in section 453A.6; and stamps
4shall be affixed as provided in subchapter I of this chapter.
5c. Snuff shall be subject to the tax as provided in
6subsections 3 and 4.
7e. d. The taxes on tobacco products, excluding little
8cigars and snuff, shall be imposed at the time the distributor
9does any of the following:
10(1) Brings, or causes to be brought, into this state from
11outside the state tobacco products for sale.
12(2) Makes, manufactures, or fabricates tobacco products in
13this state for sale in this state.
14(3) Ships or transports tobacco products to retailers in
15this state, to be sold by those retailers.
162. a. A tax is imposed upon the use or storage by consumers
17of tobacco products in this state, and upon the consumers, at
18the rate of twenty-two fifty-five and six-tenths percent of the
19cost of the tobacco products.
20b. In addition to the tax imposed in paragraph “a”, a tax
21is imposed upon the use or storage by consumers of tobacco
22products in this state, and upon the consumers, at a rate of
23twenty-eight percent of the cost of the tobacco products.
24c. Notwithstanding the rate of tax imposed pursuant to
25paragraphs “a” and “b”, if the tobacco product is a cigar, the
26total amount of the tax imposed pursuant to paragraphs “a” and
27“b” combined shall not exceed fifty cents per cigar.
28d. b. The taxes imposed by this subsection shall not apply
29if the taxes imposed by subsection 1 on the tobacco products
30have been paid.
31e. c. The taxes imposed under this subsection shall not
32apply to the use or storage of tobacco products in quantities
33of:
34(1) Less than twenty-five cigars.
35(2) Less than one pound smoking or chewing tobacco or other
-2-1tobacco products not specifically mentioned herein in this
2chapter, in the possession of any one consumer.
33. A tax is imposed upon all snuff in this state and upon
4any person engaged in business as a distributor of snuff at
5the rate of one dollar and nineteen cents per ounce, with a
6proportionate tax at the same rate on all fractional parts
7of an ounce of snuff fifty-five and six-tenths percent of
8the wholesale sales price or an amount equal to the tax
9on cigarettes pursuant to section 453A.6 for each one and
10two-tenths ounces of snuff, whichever is higher. The tax shall
11be computed based on the net weight listed by the manufacturer.
12The tax on snuff shall be imposed at the time the distributor
13does any of the following:
14a. Brings or causes to be brought into this state from
15outside the state, snuff for sale.
16b. Makes, manufactures, or fabricates snuff in this state
17for sale in this state.
18c. Ships or transports snuff to retailers in this state, to
19be sold by those retailers.
204. a. A tax is imposed upon the use or storage by consumers
21of snuff in this state, and upon the consumers, at the rate of
22one dollar and nineteen cents per ounce with a proportionate
23tax at the same rate on all fractional parts of an ounce of
24snuff fifty-five and six-tenths percent of the wholesale sales
25price or an amount equal to the tax on cigarettes pursuant to
26section 453A.6 for each one and two-tenths ounces of snuff,
27whichever is higher. The tax shall be computed based on the
28net weight as listed by the manufacturer.
29b. The tax imposed by this subsection shall not apply if the
30tax imposed by subsection 3 on snuff has been paid.
31c. The tax shall not apply to the use or storage of snuff in
32quantities of less than ten ounces.
335. Any tobacco product with respect to which a tax has once
34been imposed under this subchapter shall not again be subject
35to tax under this subchapter, except as provided in section
-3-1453A.40.
26. The tax imposed by this section shall not apply with
3respect to any tobacco product which under the Constitution
4and laws of the United States may not be made the subject of
5taxation by this state.
67. The tax imposed by this section shall be in addition to
7all other occupation or privilege taxes or license fees now or
8hereafter imposed by any city or county.
98. All excise taxes collected under this chapter by a
10distributor or any individual are deemed to be held in trust
11for the state of Iowa.
12EXPLANATION
13The inclusion of this explanation does not constitute agreement with
14the explanation’s substance by the members of the general assembly.
15This bill relates to the taxes on cigarettes and tobacco
16products. The bill increases the tax on cigarettes and tobacco
17products that is equivalent on all products to a tax of $1.86
18on a pack of cigarettes.
19The bill increases the tax imposed on cigarettes from six
20and eight-tenths cents to nine and three-tenths cents on each
21cigarette, or from $1.36 to $1.86 per pack of 20 cigarettes.
22The bill increases the tax on cigarettes assembled using
23loose tobacco products that are inserted into a vending
24machine from which assembled cigarettes are dispensed from
25three and six-hundredths cents to three and five-tenths cents,
26which increases the tax on these items in an amount, based on
27the weight of tobacco used for each cigarette, which is in
28proportion to the increase in the tax on packaged cigarettes.
29The bill increases the tax on tobacco products from 50
30percent of the wholesale sales price to 55.6 percent of the
31wholesale sales price. The bill eliminates the cap on the tax
32for cigars which was 50 cents per cigar.
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