HB 94: "An Act relating to the taxation of electronic smoking products; and providing for an effective date."
00 HOUSE BILL NO. 94 01 "An Act relating to the taxation of electronic smoking products; and providing for an 02 effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 43.50.150(c) is amended to read: 05 (c) The department may enter into an agreement with a municipality that 06 imposes a tax on cigarettes, [OR OTHER] tobacco products, or electronic smoking 07 products for the purpose of jointly auditing a person liable for a tax under 08 AS 43.50.010 - 43.50.390 and the municipal tax on cigarettes, [OR OTHER] tobacco 09 products, or electronic smoking products. In this subsection, "electronic smoking 10 product" has the meaning given in AS 43.50.390. 11 * Sec. 2. AS 43.50.300 is amended to read: 12 Sec. 43.50.300. Excise tax levied. An excise tax is levied on tobacco products 13 and electronic smoking products in the state at the rate of 75 percent of the 14 wholesale price of the [TOBACCO] products. The tax is levied when a person
01 (1) brings, or causes to be brought, a tobacco product or electronic 02 smoking product into the state from outside the state for sale; 03 (2) makes, manufactures, or fabricates a tobacco product or electronic 04 smoking product in the state for sale in the state; or 05 (3) ships or transports a tobacco product or electronic smoking 06 product to a retailer in the state for sale by the retailer. 07 * Sec. 3. AS 43.50.310(b) is amended to read: 08 (b) The tax does not apply to a 09 (1) tobacco product if the United States Constitution or other federal 10 laws prohibit the levying of the tax on the product by the state; or 11 (2) an electronic smoking product 12 (A) that is subject to taxation under AS 43.61.010 - 13 43.61.030 and that does not contain nicotine; 14 (B) approved for sale by the United States Food and Drug 15 Administration as a drug, drug product, including a drug product used to 16 treat tobacco dependence, or combination product under 21 U.S.C. 301 - 17 392 (Federal Food, Drug, and Cosmetic Act); 18 (C) if the United States Constitution or other federal laws 19 prohibit the levying of the tax on the product by the state. 20 * Sec. 4. AS 43.50.320(a) is amended to read: 21 (a) Except as provided in (g) of this section, a person must be licensed by the 22 department if the person engages in business as a distributor for a tobacco product or 23 electronic smoking product that is subject to the tax. 24 * Sec. 5. AS 43.50.330(a) is amended to read: 25 (a) On or before the last day of each calendar month, a licensee shall file a 26 return with the department. The return must state the number or amount of tobacco 27 products and electronic smoking products sold by the licensee during the preceding 28 calendar month, the selling price of the tobacco products and electronic smoking 29 products, and the amount of tax imposed on the tobacco products and electronic 30 smoking products. 31 * Sec. 6. AS 43.50.335 is amended to read:
01 Sec. 43.50.335. Tax credits and refunds. The department shall adopt 02 procedures for a refund or credit to a licensee of the tax paid for tobacco products or 03 electronic smoking products that have become unfit for sale, are destroyed, or are 04 returned to the manufacturer for credit or replacement if the licensee provides proof 05 acceptable to the department that the tobacco products or electronic smoking 06 products have not been and will not be consumed in this state. 07 * Sec. 7. AS 43.50.340 is amended to read: 08 Sec. 43.50.340. Records. A licensee shall keep a complete and accurate record 09 of all tobacco products and electronic smoking products of the licensee subject to 10 the tax, including purchase prices, sales prices, the names and addresses of the sellers 11 and the purchasers, the dates of delivery, the quantities of tobacco products and 12 electronic smoking products, and the trade names and brands. Statements and 13 records required by this section must be in the form prescribed by the department, 14 preserved for three years, and available for inspection upon demand by the 15 department. 16 * Sec. 8. AS 43.50.390(1) is amended to read: 17 (1) "distributor" means a person who 18 (A) brings, or causes to be brought, a tobacco product or 19 electronic smoking product into the state from outside the state for sale; 20 (B) makes, manufactures, or fabricates a tobacco product or 21 electronic smoking product in the state for sale in the state; or 22 (C) ships or transports a tobacco product or electronic 23 smoking product to a retailer in the state for sale by the retailer; 24 * Sec. 9. AS 43.50.390(5) is amended to read: 25 (5) "wholesale price" means 26 (A) the established price for which a manufacturer sells a 27 tobacco product or electronic smoking product to a distributor after 28 deduction of a discount or other reduction received by the distributor for 29 quantity or cash if the manufacturer's established price is adequately supported 30 by bona fide arm's length sales as determined by the department; or 31 (B) the price, as determined by the department, for which
01 tobacco products or electronic smoking products of comparable retail price 02 are sold to distributors in the ordinary course of trade if the manufacturer's 03 established price does not meet the standards of (A) of this paragraph. 04 * Sec. 10. AS 43.50.390 is amended by adding a new paragraph to read: 05 (6) "electronic smoking product" means a 06 (A) component, solution, vapor product, or other related 07 product that is manufactured and sold for use in an electronic cigarette, 08 electronic cigar, electronic cigarillo, electronic pipe, or other similar device for 09 the purpose of delivering nicotine or other substances to the person inhaling; 10 (B) product under (A) of this paragraph that is sold as part of a 11 disposable integrated unit containing a power source and delivery system or as 12 a kit containing a refillable electronic smoking system and power source. 13 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 APPLICABILITY. (a) AS 43.50.300, as amended by sec. 2 of this Act, and 16 AS 43.50.320(a), as amended by sec. 4 of this Act, apply to electronic smoking products sold 17 on or after the effective date of secs. 2 and 4 of this Act. 18 (b) AS 43.50.330(a), as amended by sec. 5 of this Act, applies to the first monthly 19 return submitted after the first full month after the effective date of sec. 5 of this Act. 20 * Sec. 12. This Act takes effect January 1, 2021.