House Bill No. 126
Introduced By cobb
A Bill for an Act entitled: "An Act raising cigarette taxes and tobacco products taxes for deposit in the state general fund; providing for the allocation of the additional taxes; providing appropriations to the department of public health and human services for distribution to indian health clinics and county and tribal health departments; amending sections 16-11-111, 16-11-119, 16-11-202, and 17-5-408, MCA; and providing an immediate effective date and an applicability date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 16-11-111, MCA, is amended to read:
"16-11-111. Cigarette sales tax -- exemption for sale to tribal member. (1) A tax on the purchase of cigarettes for
consumption, use, or any purpose other than resale in the regular course of business is imposed and must be precollected by
the wholesaler and paid to the state of Montana. The tax is
18 28 cents on each package containing 20 cigarettes and, when
packages contain more or less than 20 cigarettes, a tax on each cigarette equal to 1/20th the tax on a package containing 20
(2) The tax imposed in subsection (1) does not apply to quota cigarettes.
(3) Subject to the refund or credit provided in subsection (4), the tax must be precollected on all cigarettes entering a Montana Indian reservation.
(4) Pursuant to the procedure provided in subsection (5), a wholesaler making a sale of cigarettes to a retailer within the boundaries of a Montana Indian reservation may apply to the department for a refund or credit for taxes precollected on cigarettes sold by the retailer to a member of the federally recognized Indian tribe or tribes on whose reservation the sale is made. A wholesaler who does not file a claim within 1 year of the shipment date forfeits the refund or credit.
(5) The distribution of tax-free cigarettes to a tribal member must be implemented through a system of preapproved wholesaler shipments. A licensed Montana wholesaler shall contact the department for approval prior to the shipment of the untaxed cigarettes. The department may authorize sales based on whether the quota, as established in a cooperative agreement between the department and an Indian tribe or as set out in this chapter, has been met. If authorized as a tax-exempt sale, the wholesaler, upon providing proof of order and delivery to a retailer within the boundaries of a Montana Indian reservation selling cigarettes to members of a federally recognized tribe or tribes of that reservation, must be given a credit or refund. Once the quota has been filled, the department shall immediately notify all affected wholesalers that further sales on that reservation must be taxed and that a claim for a refund or credit will not be honored for the remainder of the quota period. Quota allocations are not transferable between quota periods or between reservations.
(6) The total amount of refunds or credits allowed by the department to all wholesalers claiming the refund or credit under subsection (4) for any month may not exceed an amount that is equal to the tax due on the quota allocation. The department shall determine the amount of refunds or credits for each Indian reservation at the beginning of each fiscal year, using the most recent census data available from the bureau of Indian affairs or as provided in a cooperative agreement with the tribe or tribes of the Indian reservation."
Section 2. Section 16-11-119, MCA, is amended to read:
"16-11-119. Disposition of taxes -- retirement of bonds. (1) The amount of
11.11% 7.14% of the cigarette tax collected
under the provisions of 16-11-111 on each package of cigarettes must be deposited in the state special revenue fund to the
credit of the department of public health and human services for the operation and maintenance of state veterans' nursing
(2) The amount of 35.71% of the cigarette tax collected under the provisions of 16-11-111 on each package of cigarettes must be deposited in the state general fund.
(2)(3) All remaining revenue collected under the provisions of 16-11-111, less the expense of collecting the taxes, must, in
accordance with the provisions of 15-1-501, be deposited as follows:
(a) 79.75% in the long-range building program fund in the debt service fund type; and
(b) 20.25% in the long-range building program account provided for in 17-7-205."
Section 3. Section 16-11-202, MCA, is amended to read:
"16-11-202. Tax on sale of tobacco other than cigarettes -- imposed on retail consumer -- rate of tax -- disposition. (1) All taxes paid pursuant to the provisions of this section are considered to be direct taxes on the retail consumer, precollected for the purpose of convenience and facility only. When the tax is paid by any other person, the payment is considered as an advance payment and must be added to the price of tobacco products and recovered from the ultimate consumer or user. Any person selling tobacco products at retail shall state or separately display in the premises where the products are sold a notice of the tax included in the selling price and charged or payable pursuant to this section. The provisions of this section do not affect the method of collection of the tax as provided in this part.
(2) There must be collected and paid to the state of Montana a tax of
12 1/2% 19.4% of the wholesale price of all tobacco
products to the wholesaler. Tobacco products shipped from Montana and destined for retail sale and consumption outside
the state are not subject to this tax.
(3) (a) The amount of 35.71% of the tobacco products tax collected under this section must be deposited in the state general fund.
(b) The amount of 64.29% of the tobacco products tax collected under this section is pledged and appropriated for the purposes set forth in 17-5-408(2)."
Section 4. Section 17-5-408, MCA, is amended to read:
"17-5-408. Percentage of income, corporation license, and cigarette tax pledged. (1) (a) The state pledges and appropriates and directs to be credited as received to the debt service account money received from the collection of the individual income tax and, except as provided in 15-31-702, money received from the collection of the corporation license and income tax, as provided in 15-1-501, as may at any time be needed to comply with the principal and interest and reserve requirements stated in 17-5-405(4).
(b) The pledge and appropriation made by this section are a first and prior charge upon all money received from the collection of the enumerated taxes.
(2) Except for the amount credited to the veterans' home maintenance and improvement account and the amount to be
deposited in the state general fund under 16-11-119, the state pledges and appropriates and directs to be credited to the debt
service account 79.75% of all remaining money received from the collection of the excise tax on cigarettes that is levied,
imposed, and assessed by 16-11-111. The state also pledges and appropriates and directs to be credited as received to the
debt service account
all 64.29% of the money received from the collection of the taxes on other tobacco products that are or
may be imposed for that purpose, including the tax imposed by 16-11-202. This section does not impair or otherwise affect
the provisions and covenants contained in the resolutions authorizing the presently outstanding long-range building
program bonds. Subject to the provisions of the preceding sentence, the pledge and appropriation made by this section are a
first and prior charge upon all money received from the collection of all taxes referred to in this subsection."
NEW SECTION. Section 5. Appropriation. (1) On July 1, 1997, and on July 1, 1998, there is appropriated from the general fund to the department of public health and human services $350,000 for distribution as a grant of $70,000 to each of the following Indian care health providers:
(a) Leo Pocha clinic, Helena;
(b) Indian health clinic of the Native American center, Great Falls;
(c) Missoula Indian center, Missoula;
(d) Billings Indian health board, Billings; and
(e) Northern American Indian health alliance, Butte.
(2) On July 1, 1997, and on July 1, 1998, there is appropriated from the general fund to the department of public health and human services $630,000, to be distributed in the amount of $10,000 to each county health department and each tribal health department on each reservation in the state.
(3) On July 1, 1997, and on July 1, 1998, there is appropriated from the general fund to the department of public health and human services $1 million, to be distributed to each county health department and each tribal health department on each reservation in the state based upon population. However, a county or tribal health department may not receive less than $1,000. In determining the distribution ratio, the department shall base the calculation on the percentage that each county's or reservation's population bears to the population of the state. For a county with a reservation, the population of the reservation within the county must be subtracted from the county population to determine the distribution percentage.
NEW SECTION. Section 6. Effective date -- applicability. (1) [This act] is effective on passage and approval.
(2) (a) [Section 1] applies to cigarettes that are received by a wholesaler after [the effective date of this act].
(b) [Section 3] applies to tobacco products that are received by a wholesaler after [the effective date of this act].