HOUSE BILL NO. 58
INTRODUCED BY R. ERICKSON
A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING FOR LONG-TERM CASH FLOW INTO THE MONTANA
TOBACCO SETTLEMENT TRUST FUND; INCREASING THE CIGARETTE TAX FROM 18 CENTS TO 36 56
CENTS ON A PACK OF CIGARETTES; INCREASING THE TAX ON TOBACCO PRODUCTS FROM 12.5
PERCENT TO 25 50 PERCENT; ALLOCATING A PORTION OF THE CIGARETTE TAX REVENUE AND
REVENUE FROM THE TAX ON TOBACCO PRODUCTS TO THE MONTANA TOBACCO SETTLEMENT TRUST
FUND PROVIDING THAT REVENUE FROM THE INCREASED TAXES BE TEMPORARILY ALLOCATED FOR
FUNDING K-12 EDUCATION; PROVIDING THAT THE PROPOSED ACT BE SUBMITTED TO THE QUALIFIED
ELECTORS OF MONTANA AT A SPECIAL ELECTION; AMENDING SECTIONS 16-11-111, 16-11-119, 16-11-202,
AND 16-11-206, MCA; AND PROVIDING AN EFFECTIVE DATE, AND AN APPLICABILITY DATE, AND A
TERMINATION 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 36 56 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 cigarettes.
(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. Cigarette taxes collected under the provisions of 16-11-111 must be allocated as
follows:
(1) The amount of 45% of the cigarette tax must be deposited in the tobacco settlement trust fund provided for in
Article XII, section 4, of the Montana constitution.
(1)(2)(1) The amount of 11.11% 5.8% 3.6% of the cigarette tax collected 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 homes.
(2)(3)(2) The amount of 73.04% 41.2% 91.3% must, in accordance with the provisions of 15-1-501, be deposited in the
state general fund [FOR THE PURPOSES OF FUNDING K-12 BASIC ENTITLEMENTS AND PER-ANB
ENTITLEMENTS].
(3)(4)(3) The amount of 15.85% 8% 5.1% must, in accordance with the provisions of 15-1-501, be deposited 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. (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% 25% 50% 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."
Section 4. Section 16-11-206, MCA, is amended to read:
"16-11-206. Wholesaler's discount -- disposition of taxes. (1) The taxes specified in this part that are paid by the
wholesaler must be paid to the department in full less a 5% defrayment for the wholesaler's collection and administrative
expense and. The taxes received must, in accordance with the provisions of 15-1-501, be deposited by the department in
the following amounts: GENERAL FUND. [FIFTY PERCENT OF THE TAX DEPOSITED IN THE GENERAL FUND
MUST BE USED FOR THE PURPOSES OF FUNDING K-12 BASIC ENTITLEMENTS AND PER-ANB
ENTITLEMENTS.]
(a) 55% to the state general fund; and
(b) 45% to the tobacco trust fund provided for in Article XII, section 4, of the Montana constitution.
(2) Refunds of the tax paid must be made as provided in 15-1-503 in cases in which the tobacco products purchased become unsalable."
NEW SECTION. SECTION 5. TRANSITION. ALL WHOLESALERS, DISTRIBUTORS, AND RETAILERS SHALL PAY THE DIFFERENCE IN TAX BETWEEN THE FORMER TAX RATE AND THE NEW TAX RATE ON ALL INVENTORY SUBJECT TO TAX HELD BY THEM ON JULY 1, 2002, THAT EXCEEDS ALL INVENTORY SUBJECT TO TAX HELD BY THEM ON THE LAST DAY OF THEIR MOST RECENTLY CONCLUDED INCOME TAX REPORTING YEAR.
NEW SECTION. Section 6. Notification to tribal governments. The secretary of state shall send a copy of [this act]
THIS ACT to each tribal government located on the seven Montana reservations and to the Little Shell band of Chippewa.
NEW SECTION. Section 7. Effective date -- applicability. [This act] IF APPROVED BY THE ELECTORATE,
THIS ACT is effective July 1, 2001 2002, and applies to taxes precollected and paid on the purchase of cigarettes for
consumption, use, or any purpose other than resale beginning on or after July 1, 2001 2002.
NEW SECTION. SECTION 8. TERMINATION. THE BRACKETED LANGUAGE IN [SECTIONS 2 AND 4] TERMINATES JUNE 30, 2003.
NEW SECTION. SECTION 9. SUBMISSION TO ELECTORATE. THIS ACT SHALL BE SUBMITTED TO THE QUALIFIED ELECTORS OF MONTANA AT A SPECIAL ELECTION TO BE HELD IN NOVEMBER 2001 BY PRINTING ON THE BALLOT THE FULL TITLE OF THIS ACT AND THE FOLLOWING:
[] FOR INCREASING TOBACCO TAXES AND ALLOCATING THE INCREASED REVENUE FOR THE SUPPORT OF K-12 EDUCATION.
[] AGAINST INCREASING TOBACCO TAXES AND ALLOCATING THE INCREASED REVENUE FOR THE SUPPORT OF K-12 EDUCATION.
- END -
Latest Version of HB 58 (HB0058.02)
Processed for the Web on March 27, 2001 (6:25PM)
New language in a bill appears underlined, deleted material appears stricken.
Sponsor names are handwritten on introduced bills, hence do not appear on the bill until it is reprinted. See the status of this bill for the bill's primary sponsor.
Status of this Bill | 2001 Legislature | Leg. Branch Home
All versions of this bill (PDF Format)
Authorized print version w/line numbers (PDF format)
(406)444-3064