CSHB 94(L&C): "An Act relating to the taxation of electronic smoking products; relating to transporting tobacco, a product containing nicotine, or an electronic smoking product; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 94(L&C) 01 "An Act relating to the taxation of electronic smoking products; relating to transporting 02 tobacco, a product containing nicotine, or an electronic smoking product; and providing 03 for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 43.50.105(b) is amended to read: 06 (b) A person who is licensed under this chapter may not ship or cause to be 07 shipped cigarettes to a person in this state unless the person receiving the cigarettes 08 (1) is licensed under this chapter; 09 (2) holds a business license endorsement under AS 43.70.075; 10 (3) is an operator of a customs bonded warehouse under 19 U.S.C. 11 1311 or 19 U.S.C. 1555; 12 (4) is an instrumentality of the federal government or an Indian tribal 13 organization authorized by law to possess cigarettes not taxed under this chapter; or 14 (5) is an individual 21 [19] years of age or older and the individual's
01 age was verified at the time of purchase by a third-party verification service, the 02 individual is receiving the cigarettes for personal consumption, and the tax imposed 03 on the cigarettes under this chapter has been paid. 04 * Sec. 2. AS 43.50.105(c) is amended to read: 05 (c) A common or contract carrier may not knowingly transport cigarettes to a 06 person in this state unless the person 07 (1) shipping the cigarettes is licensed under this chapter and, before 08 shipment, provides the common or contract carrier with a copy of the person's current 09 license issued by the department and 10 (A) an affidavit from the intended recipient certifying that the 11 person receiving the cigarettes is a person described under (b)(1) - (4) [(b)(1) - 12 (5)] of this section; or 13 (B) the common or contract carrier verifies the age of the 14 recipient as 21 years of age or older before delivery; or 15 (2) receiving the cigarettes is a person described under (a)(2) or (3) of 16 this section or is licensed under this chapter and, before receipt, provides the common 17 or contract carrier with a copy of the person's current license issued by the department. 18 * Sec. 3. AS 43.50.150(c) is amended to read: 19 (c) The department may enter into an agreement with a municipality that 20 imposes a tax on cigarettes, [OR OTHER] tobacco products, or electronic smoking 21 products for the purpose of jointly auditing a person liable for a tax under 22 AS 43.50.010 - 43.50.390 and the municipal tax on cigarettes, [OR OTHER] tobacco 23 products, or electronic smoking products. In this subsection, "electronic smoking 24 product" has the meaning given in AS 43.50.390. 25 * Sec. 4. AS 43.50.300 is amended to read: 26 Sec. 43.50.300. Excise tax levied. An excise tax is levied on tobacco products 27 and electronic smoking products in the state at the rate of 75 percent of the 28 wholesale price of the [TOBACCO] products. The tax is levied when a person 29 (1) brings, or causes to be brought, a tobacco product or electronic 30 smoking product into the state from outside the state for sale; 31 (2) makes, manufactures, or fabricates a tobacco product or electronic
01 smoking product in the state for sale in the state; or 02 (3) ships or transports a tobacco product or electronic smoking 03 product to a retailer in the state for sale by the retailer. 04 * Sec. 5. AS 43.50.310(b) is amended to read: 05 (b) The tax does not apply to a 06 (1) tobacco product if the United States Constitution or other federal 07 laws prohibit the levying of the tax on the product by the state; or 08 (2) an electronic smoking product 09 (A) that is subject to taxation under AS 43.61.010 - 10 43.61.030 and that does not contain nicotine; 11 (B) approved for sale by the United States Food and Drug 12 Administration as a drug, drug product, including a drug product used to 13 treat tobacco dependence, or combination product under 21 U.S.C. 301 - 14 392 (Federal Food, Drug, and Cosmetic Act); 15 (C) if the United States Constitution or other federal laws 16 prohibit the levying of the tax on the product by the state. 17 * Sec. 6. AS 43.50.320(a) is amended to read: 18 (a) Except as provided in (g) of this section, a person must be licensed by the 19 department if the person engages in business as a distributor for a tobacco product or 20 electronic smoking product that is subject to the tax. 21 * Sec. 7. AS 43.50 is amended by adding a new section to read: 22 Sec. 43.50.325. Restrictions on shipping or transporting tobacco products 23 and electronic smoking products. (a) A person who is not licensed under this chapter 24 may not ship or cause to be shipped a tobacco product or electronic smoking product 25 to a person in this state unless the person receiving the tobacco product or electronic 26 smoking product is 27 (1) licensed under this chapter; 28 (2) an operator of a customs bonded warehouse under 19 U.S.C. 1311 29 or 19 U.S.C. 1555; or 30 (3) an instrumentality of the federal government or an Indian tribal 31 organization authorized by law to possess tobacco products or electronic smoking
01 products not taxed under this chapter. 02 (b) A person who is licensed under this chapter may not ship or cause to be 03 shipped a tobacco product or electronic smoking product to a person in this state 04 unless the person receiving the tobacco product or electronic smoking product 05 (1) is licensed under this chapter; 06 (2) holds a business license endorsement under AS 43.70.075; 07 (3) is an operator of a customs bonded warehouse under 19 U.S.C. 08 1311 or 19 U.S.C. 1555; 09 (4) is an instrumentality of the federal government or an Indian tribal 10 organization authorized by law to possess tobacco products or electronic smoking 11 products not taxed under this chapter; or 12 (5) is an individual 21 years of age or older and the individual's age 13 was verified at the time of purchase though a third-party verification service, the 14 individual is receiving the tobacco product or electronic smoking product for personal 15 consumption, and the tax imposed on the tobacco product or electronic smoking 16 product under this chapter has been paid. 17 (c) A common or contract carrier may not knowingly transport a tobacco 18 product or electronic smoking product to a person in this state unless the person 19 (1) shipping the tobacco product or electronic smoking product is 20 licensed under this chapter and, before shipment, provides the common or contract 21 carrier with a copy of the person's current license issued by the department and 22 (A) an affidavit from the intended recipient certifying that the 23 person receiving the tobacco product or electronic smoking product is a person 24 described under (b)(1) - (4) of this section; or 25 (B) the common or contract carrier verifies the age of the 26 recipient as 21 years of age or older before delivery; or 27 (2) receiving the tobacco product or electronic smoking product is a 28 person described under (a)(2) or (3) of this section or is licensed under this chapter 29 and, before receipt, provides the common or contract carrier with a copy of the 30 person's current license issued by the department. 31 (d) If a tobacco product or electronic smoking product is transported by a
01 common or contract carrier to a home or residence, it is rebuttably presumed that the 02 common or contract carrier knew that the recipient of the tobacco product or electronic 03 smoking product was not a person described under (b)(1) - (5) of this section, unless 04 the person shipping the tobacco product or electronic smoking product has satisfied 05 the requirements in (c)(1) of this section. 06 (e) A person, other than a common or contract carrier, may not knowingly 07 transport a tobacco product or electronic smoking product to a person in this state, 08 unless the recipient of the tobacco product or electronic smoking product is a person 09 described under (b)(1) - (5) of this section. 10 (f) A person who ships or causes to be shipped a tobacco product or electronic 11 smoking product to a person in this state shall plainly and visibly mark the container 12 or wrapping with the words "tobacco product" or "electronic smoking product" or 13 both, as applicable, if the tobacco product or electronic smoking product is shipped in 14 a container or wrapping other than the manufacturer's original container or wrapping 15 of the tobacco product or electronic smoking product. 16 (g) A person who violates the provisions of this section is guilty of a class A 17 misdemeanor if the person unlawfully ships, causes to be shipped, or transports a 18 tobacco product or electronic smoking product. 19 (h) In addition to the criminal penalty under (g) of this section, the department 20 may assess a civil fine of not more than $5,000 for each violation of this section. 21 (i) A person who violates the provisions of this section is jointly and severally 22 liable for the taxes imposed by AS 43.50.090 and 43.50.190. To the fullest extent 23 permitted by the Constitution of the United States, a person who violates the 24 provisions of this section is required to collect the taxes and pay them to the 25 department. 26 * Sec. 8. AS 43.50.330(a) is amended to read: 27 (a) On or before the last day of each calendar month, a licensee shall file a 28 return with the department. The return must state the number or amount of tobacco 29 products and electronic smoking products sold by the licensee during the preceding 30 calendar month, the selling price of the tobacco products and electronic smoking 31 products, and the amount of tax imposed on the tobacco products and electronic
01 smoking products. 02 * Sec. 9. AS 43.50.335 is amended to read: 03 Sec. 43.50.335. Tax credits and refunds. The department shall adopt 04 procedures for a refund or credit to a licensee of the tax paid for tobacco products or 05 electronic smoking products that have become unfit for sale, are destroyed, or are 06 returned to the manufacturer for credit or replacement if the licensee provides proof 07 acceptable to the department that the tobacco products or electronic smoking 08 products have not been and will not be consumed in this state. 09 * Sec. 10. AS 43.50.340 is amended to read: 10 Sec. 43.50.340. Records. A licensee shall keep a complete and accurate record 11 of all tobacco products and electronic smoking products of the licensee subject to 12 the tax, including purchase prices, sales prices, the names and addresses of the sellers 13 and the purchasers, the dates of delivery, the quantities of tobacco products and 14 electronic smoking products, and the trade names and brands. Statements and 15 records required by this section must be in the form prescribed by the department, 16 preserved for three years, and available for inspection upon demand by the 17 department. 18 * Sec. 11. AS 43.50.390(1) is amended to read: 19 (1) "distributor" means a person who 20 (A) brings, or causes to be brought, a tobacco product or 21 electronic smoking product into the state from outside the state for sale; 22 (B) makes, manufactures, or fabricates a tobacco product or 23 electronic smoking product in the state for sale in the state; or 24 (C) ships or transports a tobacco product or electronic 25 smoking product to a retailer in the state for sale by the retailer; 26 * Sec. 12. AS 43.50.390(5) is amended to read: 27 (5) "wholesale price" means 28 (A) the established price for which a manufacturer sells a 29 tobacco product or electronic smoking product to a distributor after 30 deduction of a discount or other reduction received by the distributor for 31 quantity or cash if the manufacturer's established price is adequately supported
01 by bona fide arm's length sales as determined by the department; or 02 (B) the price, as determined by the department, for which 03 tobacco products or electronic smoking products of comparable retail price 04 are sold to distributors in the ordinary course of trade if the manufacturer's 05 established price does not meet the standards of (A) of this paragraph. 06 * Sec. 13. AS 43.50.390 is amended by adding a new paragraph to read: 07 (6) "electronic smoking product" means a 08 (A) component, solution, vapor product, or other related 09 product that is manufactured and sold for use in an electronic cigarette, 10 electronic cigar, electronic cigarillo, electronic pipe, or other similar device for 11 the purpose of delivering nicotine or other substances to the person inhaling; 12 (B) product under (A) of this paragraph that is sold as part of a 13 disposable integrated unit containing a power source and delivery system or as 14 a kit containing a refillable electronic smoking system and power source. 15 * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 APPLICABILITY. (a) AS 43.50.300, as amended by sec. 4 of this Act, and 18 AS 43.50.320(a), as amended by sec. 6 of this Act, apply to electronic smoking products sold 19 on or after the effective date of secs. 4 and 6 of this Act. 20 (b) AS 43.50.330(a), as amended by sec. 8 of this Act, applies to the first monthly 21 return submitted after the first full month after the effective date of sec. 8 of this Act. 22 * Sec. 15. This Act takes effect January 1, 2021.