2016-02-08                     House Journal                      Page 1598
HB 304                                                                                                                        
HOUSE BILL NO. 304 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act requiring the electronic submission of a tax return or                                                             
     report with the Department of Revenue; relating to the taxes on                                                            
     cigarettes and tobacco products; taxing electronic smoking                                                                 
     products; adding a definition of 'electronic smoking product'; and                                                         
     providing for an effective date."                                                                                          
                                                                                                                                
was read the first time and referred to the Labor & Commerce and                                                                
Finance Committees.                                                                                                             
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Fiscal, Dept. of Revenue                                                                                                    
                                                                                                                                
The Governor's transmittal letter dated February 5, 2016, follows:                                                              
                                                                                                                                
"Dear Speaker Chenault:                                                                                                         
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to the taxes on cigarettes                                                      
and tobacco products; and taxing electronic smoking devices.                                                                    
                                                                                                                                
Smoking technology has advanced beyond single use paper-rolled                                                                  
cigarettes to include multiple use electronic smoking devices.                                                                  
Therefore, our tobacco tax statutes (AS 43.50 Cigarette Tax Act)                                                                
should be revised to include this new smoking device as taxable.                                                                
                                                                                                                                
To further update our outdated tobacco tax structure, I propose to                                                              
amend the additional tax levy on cigarettes - which has not been                                                                
raised since 2007 - from 62 mills to 112 mills. I also propose                                                                  
increasing the tax rate on tobacco products (other than cigarettes) from                                                        

2016-02-08                     House Journal                      Page 1599
75 percent of the wholesale price to 100 percent of the wholesale                                                               
price. These reasonable adjustments will bring our tax structure up to                                                          
date and are expected to generate additional revenue of approximately                                                           
$29,000,000 annually.                                                                                                           
                                                                                                                                
To increase administrative efficiency for the Department of Revenue                                                             
and state taxpayers, the bill would require the electronic submission of                                                        
tax returns with an exemption available upon request.                                                                           
                                                                                                                                
The bill is an integral component of the New Sustainable Alaska Plan                                                            
to provide a balanced and sustainable budget for Alaska's long-term                                                             
fiscal stability.                                                                                                               
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Bill Walker                                                                                                                     
Governor"