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AB-1666 Cigarettes and tobacco products.(2003-2004)

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Assembly Bill No. 1666
CHAPTER 867

An act to amend, repeal, and add Sections 30142, 30168, 30181, and 30182 of the Revenue and Taxation Code, relating to taxation.

[ Filed with Secretary of State  October 12, 2003. Approved by Governor  October 12, 2003. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1666, Cogdill. Cigarettes and tobacco products.
The Cigarette and Tobacco Products Tax Law requires distributors and wholesalers of cigarette and tobacco products to be licensed by the State Board of Equalization. The Cigarette and Tobacco Products Tax Law also requires a tax imposed by that law with respect to distributions of cigarettes to be paid by distributors through the use of stamps or meter register settings, and requires that these stamps or meter register settings be affixed to each package of cigarettes sold.
Existing law requires all distributors of cigarette and tobacco products that are required to be licensed by the State Board of Equalization to furnish a $1,000 security deposit. Existing law requires a distributor that defers payments for stamps or meter register settings to furnish a security deposit of at least 70% of, but not more than twice the amount of, stamps and meter register settings for which payment is deferred.
This bill would, until January 1, 2007, reduce the amount of the security deposit required to be provided by a distributor that defers payments for stamps or meter register settings and elects to make those payments on a twice-monthly basis, as authorized by this bill, to an amount that is at least 50% of, but not more than twice the amount of, stamps and meter register settings for which payment is deferred.
Existing law requires distributors that defer payments for stamps and meter register settings to remit the payments on or before the 25th day of the month following the month in which the payments were deferred.
This bill would, until January 1, 2007, require distributors that defer payments for stamps and meter register settings to elect to remit those payments either on a monthly or on a twice-monthly basis.
Existing law requires distributors of cigarettes and tobacco products to file returns for, and remit the taxes collected on, the distributions of cigarettes and tobacco products on or before the 25th day of the month following the month during which the cigarettes or tobacco products were distributed.
This bill would, until January 1, 2007, require distributors of cigarettes and tobacco products to elect to file those returns and remit those taxes, as specified, either on a monthly basis or on a twice-monthly basis.
This bill would require the Legislative Analyst, on or before January 1, 2006, to prepare a report of the economic impact of this act.

The people of the State of California do enact as follows:


SECTION 1.

 Section 30142 of the Revenue and Taxation Code is amended to read:

30142.
 (a) The board shall fix the amount of the security required of any distributor and may increase or reduce the amount at any time. A minimum security in the amount of one thousand dollars ($1,000) shall be furnished by every distributor that is required to be licensed.
(b) If a distributor desires to defer payments for stamps or meter register settings, as provided in Article 2 (commencing with Section 30166) of Chapter 3.5, the board shall require a security as follows:
(1) If a distributor elects, under Section 30168, to make payments on a monthly basis, the board shall require a security equal to not less than 70 percent of the amount and no more than twice the amount, as fixed by the board, of the distributor’s purchases of stamps and meter register settings for which payment may be deferred.
(2) If a distributor elects, under Section 30168, to make payments on a twice-monthly basis, the board shall require a security equal to not less than 50 percent of the amount and no more than twice the amount, as fixed by the board, of the distributor’s purchases of stamps and meter register settings for which payment may be deferred.
(c) This section shall remain in effect until January 1, 2007, and as of that date is repealed.

SEC. 2.

 Section 30142 is added to the Revenue and Taxation Code, to read:

30142.
 (a) The board shall fix the amount of the security required of any distributor and may increase or reduce the amount at any time. A minimum security in the amount of one thousand dollars ($1,000) shall be furnished by every distributor that is required to be licensed.
(b) If a distributor desires to defer payments for stamps or meter register settings, as provided in Article 2 (commencing with Section 30166) of Chapter 3.5, the board shall require a security equal to not less than 70 percent of the amount and no more than twice the amount, as fixed by the board, of the distributor’s purchases of stamps and meter register settings for which payment may be deferred.
(c) This section shall become operative on January 1, 2007.

SEC. 3.

 Section 30168 of the Revenue and Taxation Code is amended to read:

30168.
 (a) Amounts owing for stamps and meter register settings purchased on the deferred-payment basis in any calendar month shall be due and payable on a monthly basis, in the manner elected pursuant to subdivision (b), during the month following the calendar month in which the stamps and meter register settings were purchased. Payment shall be made by a remittance payable to the board.
(b) A distributor shall elect to make the payment required by subdivision (a) on either a monthly or a twice-monthly basis. An election made pursuant to this subdivision shall remain in effect for at least one year from the date the election is made. If the board finds that good cause exists for a distributor’s inability to maintain the election for the full year, the board shall authorize the distributor to make a new election, as otherwise authorized by this subdivision, prior to the expiration of the one-year period following the prior election.
(1) If a distributor elects to make the payment required by subdivision (a) on a monthly basis, the distributor shall remit the payment on or before the 25th day of the month following the month in which the stamps and meter register settings were purchased.
(2) If a distributor elects to make the payment required by subdivision (a) on a twice-monthly basis, the distributor shall make two remittances during the month following the month in which the stamps and meter register settings were purchased. The first monthly remittance shall be made on or before the 5th day of the month and shall be equal to either one-half of the total amount of those purchases of stamps and meter register settings that were made during the preceding month or the total amount of those purchases of stamps and meter register settings that were made between the first day and the 15th day of the preceding month, whichever is greater. The second monthly remittance shall be made on or before the 25th day of the month for the remainder of those purchases of stamps and meter register settings that were made in the preceding month.
(c) This section shall remain in effect until January 1, 2007, and as of that date is repealed.

SEC. 4.

 Section 30168 is added to the Revenue and Taxation Code, to read:

30168.
 (a) Amounts owing for stamps and meter register settings purchased on the deferred-payment basis in any calendar month shall be due and payable on or before the 25th day of the following calendar month. Payment shall be made by a remittance payable to the board.
(b) This section shall become operative on January 1, 2007.

SEC. 5.

 Section 30181 of the Revenue and Taxation Code is amended to read:

30181.
 (a) When any tax imposed upon cigarettes under Article 1 (commencing with Section 30101), Article 2 (commencing with Section 30121), and Article 3 (commencing with Section 30131) of Chapter 2 is not paid through the use of stamps or meter impressions, the tax shall be due and payable monthly on or before the 25th day of the month following the calendar month in which a distribution of cigarettes occurs, or in the case of a sale of cigarettes on the facilities of a common carrier for which the tax is imposed pursuant to Section 30104, the tax shall be due and payable monthly on or before the 25th day of the month following the calendar month in which a sale of cigarettes on the facilities of the carrier occurs.
(b) Each distributor of tobacco products shall file a return in the form as prescribed by the board, that may include, but not be limited to, electronic media, with respect to distributions of tobacco products and their wholesale cost during the preceding month, and any other information as the board may require to carry out this part. The return shall be filed with the board, in the manner elected by the distributor pursuant to subdivision (c), together with a remittance payable to the board, of the amount of tax, if any, due under Article 2 (commencing with Section 30121) or Article 3 (commencing with Section 30131) of Chapter 2 for that period. To facilitate the administration of this part, the board may require the filing of the returns for longer than monthly periods. Returns shall be authenticated in a form or pursuant to methods as may be prescribed by the board.
(c) A distributor shall elect to file the return and to make the payment required by subdivision (b) on either a monthly or a twice-monthly basis. An election made pursuant to this subdivision shall remain in effect for at least one year from the date the election is made. If the board finds that good cause exists for a distributor’s inability to maintain the election for the full year, the board shall authorize the distributor to make a new election, as otherwise authorized by this subdivision, prior to the expiration of the one-year period following the prior election.
(1) If a distributor elects a monthly basis, the distributor shall file a return and remit the payment on or before the 25th day of the month following the month in which the tobacco products were distributed.
(2) If a distributor elects a twice-monthly basis, the distributor shall file two returns and make two remittances during the month following the month in which the tobacco products were distributed. The first monthly return shall be filed and the first remittance shall be made on or before the 5th day of the month for those distributions that occurred between the first day and the 15th day of the preceding month. The second monthly return shall be filed and the second remittance made on or before the 25th day of the month for those distributions that occurred between the 16th day and last day of the preceding month.
(d) This section shall remain in effect until January 1, 2007, and as of that date is repealed.

SEC. 6.

 Section 30181 is added to the Revenue and Taxation Code, to read:

30181.
 (a) When any tax imposed upon cigarettes under Article 1 (commencing with Section 30101), Article 2 (commencing with Section 30121), and Article 3 (commencing with Section 30131) of Chapter 2 is not paid through the use of stamps or meter impressions, the tax shall be due and payable monthly on or before the 25th day of the month following the calendar month in which a distribution of cigarettes occurs, or in the case of a sale of cigarettes on the facilities of a common carrier for which the tax is imposed pursuant to Section 30104, the tax shall be due and payable monthly on or before the 25th day of the month following the calendar month in which a sale of cigarettes on the facilities of the carrier occurs.
(b) Each distributor of tobacco products shall file a return in the form, as prescribed by the board, which may include, but not be limited to, electronic media respecting the distributions of tobacco products and their wholesale cost during the preceding month, and any other information as the board may require to carry out this part. The return shall be filed with the board on or before the 25th day of the calendar month following the close of the monthly period for which it relates, together with a remittance payable to the board, of the amount of tax, if any, due under Article 2 (commencing with Section 30121) or Article 3 (commencing with Section 30131) of Chapter 2 for that period.
(c) To facilitate the administration of this part, the board may require the filing of the returns for longer than monthly periods.
(d) Returns shall be authenticated in a form or pursuant to methods as may be prescribed by the board.
(e) This section shall become operative on January 1, 2007.

SEC. 7.

 Section 30182 of the Revenue and Taxation Code is amended to read:

30182.
 (a) Except as provided in subdivision (b), every distributor shall file, on or before the 25th day of each month, a report in the form as prescribed by the board, that may include, but not be limited to, electronic media with respect to distributions of cigarettes and purchases of stamps and meter register units during the preceding month and any other information as the board may require to carry out this part.
(b) Every distributor that elects, pursuant to Section 30168, to make deferred payments on a twice-monthly basis shall file a report in the form as prescribed by the board, that may include, but not be limited to, electronic media, with respect to distributions of cigarettes and purchases of stamps and meter register units during the month following the month in which the distribution occurred and the stamps and meter register settings were purchased, and any other information as the board may require to carry out this part. The monthly report shall be filed on or before the 5th day of the month with respect to those distributions of cigarettes and purchases of stamps and meter register settings that were made during the preceding month.
(c) Reports shall be authenticated in a form, or pursuant to, methods as may be prescribed by the board.
(d)This section shall remain in effect until January 1, 2007, and as of that date is repealed.

SEC. 8.

 Section 30182 is added to the Revenue and Taxation Code, to read:

30182.
 (a) Every distributor shall, on or before the 25th day of each month, file a report in the form as prescribed by the board, which may include, but not be limited to, electronic media with respect to distributions of cigarettes and purchases of stamps and meter register units during the preceding month and any other information as the board may require to carry out this part.
(b) Every distributor shall, on or before the 25th day of each month, file a return, in the form as prescribed by the board, which may include, but not be limited to, electronic media, with respect to distributions of tobacco products and their wholesale cost during the preceding month, and any other information as the board may require to carry out this part.
(c) The reports and returns required by this section shall be authenticated in a form or pursuant to methods as may be prescribed by the board.
(d) This section shall become operative on January 1, 2007.

SEC. 9.

 The Legislative Analyst, with assistance of, and based on information provided by, the State Board of Equalization, shall, on or before January 1, 2006, prepare a report to the Legislature of the economic impact of this act. The report shall include an evaluation of the State Board of Equalization’s ability to collect cigarette tax revenues, additional revenues, if any, generated by the twice-monthly payment program, and the ability of distributors to access security bonds.