00 HOUSE BILL NO. 304
01 "An Act requiring the electronic submission of a tax return or report with the
02 Department of Revenue; relating to the taxes on cigarettes and tobacco products; taxing
03 electronic smoking products; adding a definition of 'electronic smoking product'; and
04 providing for an effective date."
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
06 * Section 1. AS 43.05.220 is amended to add a new subsection to read:
07 (f) A penalty of $25 or one percent of the total tax before any payment,
08 whichever is greater, shall be assessed against a taxpayer that fails to electronically
09 submit a return or report under AS 43.05.222, unless the taxpayer has received an
10 exemption under AS 43.05.222 or can show reasonable cause.
11 * Sec. 2. AS 43.05 is amended by adding a new section to read:
12 Sec. 43.05.222. Electronic submission of return or report. (a) A taxpayer
13 required to submit a return or report for a tax levied under AS 43 or any other tax
14 administered by the department shall submit the return or report electronically in a
01 format prescribed by the department. Unless the taxpayer has received an exemption
02 under (b) of this section or can show reasonable cause, a return or report not submitted
03 electronically is subject to a civil penalty under AS 43.05.220.
04 (b) A taxpayer may request an exemption from the requirement that a return or
05 report be submitted electronically. The taxpayer or taxpayer's representative shall
06 contact the department and request the exemption before the return or report is due
07 and shall submit evidence that the taxpayer does not have the capability to submit the
08 return or report electronically. An exemption granted under this subsection is valid for
09 two years after the first tax filing due date after the exemption is granted; after the two
10 year period, the taxpayer may apply for another exemption.
11 * Sec. 3. AS 43.50.150(c) is amended to read:
12 (c) The department may enter into an agreement with a municipality that
13 imposes a tax on cigarettes, electronic smoking products, or other tobacco products
14 for the purpose of jointly auditing a person liable for a tax under AS 43.50.010 -
15 43.50.390 and the municipal tax on cigarettes, electronic smoking products, or other
16 tobacco products.
17 * Sec. 4. AS 43.50.170 is amended by adding a new paragraph to read:
18 (13) "electronic smoking product" has the meaning given in
19 AS 43.50.390.
20 * Sec. 5. AS 43.50.190(a) is amended to read:
21 (a) There is levied an excise tax on each cigarette imported or acquired in this
22 state of 112 [,
23 (1) AFTER DECEMBER 31, 2004, BUT BEFORE JULY 1, 2006, 42
25 (2) AFTER JUNE 30, 2006, BUT BEFORE JULY 1, 2007, 52
27 (3) AFTER JUNE 30, 2007, 62] mills.
28 * Sec. 6. AS 43.50.300 is amended to read:
29 Sec. 43.50.300. Excise tax levied. An excise tax is levied on tobacco products
30 and electronic smoking products in the state at the rate of 100  percent of the
31 wholesale price of the tobacco products or electronic smoking products. The tax is
01 levied when a person
02 (1) brings, or causes to be brought, a tobacco product or electronic
03 smoking product into the state from outside the state for sale;
04 (2) makes, manufactures, or fabricates a tobacco product or electronic
05 smoking product in the state for sale in the state; or
06 (3) ships or transports a tobacco product to a retailer in the state for
07 sale by the retailer.
08 * Sec. 7. AS 43.50.310(b) is amended to read:
09 (b) The tax does not apply to a tobacco product or electronic smoking
10 product if the United States Constitution or other federal laws prohibit the levying of
11 the tax on the product by the state.
12 * Sec. 8. AS 43.50.320(a) is amended to read:
13 (a) Except as provided in (g) of this section, a person must be licensed by the
14 department if the person engages in business as a distributor for a tobacco product or
15 electronic smoking product that is subject to the tax.
16 * Sec. 9. AS 43.50.330(a) is amended to read:
17 (a) On or before the last day of each calendar month, a licensee shall file a
18 return with the department. The return must be submitted electronically to the
19 department in a format prescribed by the department. The return must state the
20 number or amount of tobacco products or electronic smoking products sold by the
21 licensee during the preceding calendar month, the selling price of the tobacco products
22 or electronic smoking products, and the amount of tax imposed on the tobacco
23 products or electronic smoking products.
24 * Sec. 10. AS 43.50.335 is amended to read:
25 Sec. AS 43.50.335. Tax credits and refunds. The department shall adopt
26 procedures for a refund or credit to a licensee of the tax paid for tobacco products or
27 electronic smoking products that have become unfit for sale, are destroyed, or are
28 returned to the manufacturer for credit or replacement if the licensee provides proof
29 acceptable to the department that the tobacco products or electronic smoking
30 products have not been and will not be consumed in this state.
31 * Sec. 11. AS 43.50.340 is amended to read:
01 Sec. 43.50.340. Records. A licensee shall keep a complete and accurate record
02 of all tobacco products or electronic smoking products of the licensee subject to the
03 tax, including purchase prices, sales prices, the names and addresses of the sellers and
04 the purchasers, the dates of delivery, the quantities of tobacco products or electronic
05 smoking products, and the trade names and brands. Statements and records required
06 by this section must be in the form prescribed by the department, preserved for three
07 years, and available for inspection upon demand by the department.
08 * Sec. 12. AS 43.50.390(4) is amended to read:
09 (4) "tobacco product"
10 (A) means
11 (i) [(A)] a cigar;
12 (ii) [(B)] a cheroot;
13 (iii) [(C)] a stogie;
14 (iv) [(D)] a perique;
15 (v) [(E)] snuff and snuff flour;
16 (vi) [(F)] smoking tobacco, including granulated, plug-
17 cut, crimp-cut, ready-rubbed, and any form of tobacco suitable for
18 smoking in a pipe or cigarette;
19 (vii) [(G)] chewing tobacco, including cavendish, twist,
20 plug, scrap, and tobacco suitable for chewing; or
21 (viii) [(H)] an article or product made of tobacco or a
22 tobacco substitute, but not including a cigarette as defined in
23 AS 43.50.170;
24 (B) does not include a product that has been approved by
25 the United States Food and Drug Administration for sale as a smoking
26 cessation product, tobacco dependence product, or modified risk tobacco
28 * Sec. 13. AS 43.50.390(5) is amended to read:
29 (5) "wholesale price" means, for a tobacco product or electronic
30 smoking product
31 (A) acquired from a manufacturer, the gross invoice
01 [ESTABLISHED] price, including all federal excise taxes, at [FOR] which
02 the [A] manufacturer sells a tobacco product or electronic smoking product
03 to an unaffiliated [A] distributor after a deduction of a trade discount or other
04 reduction received by the distributor [FOR QUANTITY OR CASH IF THE
05 MANUFACTURER'S ESTABLISHED PRICE IS ADEQUATELY
06 SUPPORTED BY BONA FIDE ARM'S LENGTH SALES AS
07 DETERMINED BY THE DEPARTMENT]; or
08 (B) not acquired from a manufacturer, the gross invoice
09 price, including all federal excise taxes, after a deduction of a trade
10 discount or other reduction [AS DETERMINED BY THE DEPARTMENT,
11 FOR WHICH TOBACCO PRODUCTS OF COMPARABLE RETAIL PRICE
12 ARE SOLD TO DISTRIBUTORS IN THE ORDINARY COURSE OF
13 TRADE IF THE MANUFACTURER'S ESTABLISHED PRICE DOES NOT
14 MEET THE STANDARDS OF (A) OF THIS PARAGRAPH].
15 * Sec. 14. AS 43.50.390 is amended by adding a new paragraph to read:
16 (6) "electronic smoking product"
17 (A) means a component, solution, vapor product, or other
18 related product of an electronic cigarette, electronic cigar, electronic cigarillo,
19 electronic pipe, or other similar product that is manufactured and sold for the
20 purpose of being aerosolized to deliver nicotine or other substances to the
21 person inhaling; if the product is sold as a disposable integrated unit containing
22 a power source and delivery system, or as a kit containing a refillable
23 electronic smoking system and power source, the entire unit shall be
24 considered an electronic smoking product for the purposes of this definition;
25 (B) does not include a
26 (i) product that is subject to taxation under
27 AS 43.61.010 - 43.61.030 that does not contain nicotine;
28 (ii) drug, product, or combination product approved for
29 sale by the United States Food and Drug Administration, as those terms
30 are defined in 21 U.S.C. 301-392 (Food, Drug, and Cosmetic Act); or
31 (iii) product that has been approved by the United
01 States Food and Drug Administration for sale as a smoking cessation
02 product, tobacco dependence product, or modified risk tobacco product.
03 * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to
05 APPLICABILITY. (a) AS 43.50.190(a), as amended by sec. 5 of this Act, and
06 AS 43.50.300, as amended by sec. 9 of this Act, apply to tobacco products sold on or after the
07 effective date of this Act.
08 (b) AS 43.50.330(a), as amended by sec. 9 of this Act, applies to the first monthly
09 return submitted after the first full month after the effective date of this Act.
10 * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to
12 TRANSITIONAL PROVISION: REGULATIONS. The Department of Revenue may
13 adopt regulations necessary to implement the changes made by this Act. The regulations take
14 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the
15 law implemented by the regulation.
16 * Sec. 17. Section 16 of this Act takes effect immediately under AS 01.10.070(c).
17 * Sec. 18. Except as provided in sec. 17 of this Act, this Act takes effect July 1, 2016.