Chapter 982 Oregon Laws 2001

AN ACT

HB 3433

Relating to taxation; creating new provisions; amending ORS 323.500 and 323.505 and section 3, chapter 385, Oregon Laws 1995; and providing for revenue raising that requires approval by a three-fifths majority.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Section 3, chapter 385, Oregon Laws 1995, as amended by section 1, chapter 589, Oregon Laws 1997, and section 10, chapter 1077, Oregon Laws 1999, is amended to read:

Sec. 3. (1) Notwithstanding ORS 323.030 (2) and in addition to and not in lieu of any other tax, every distributor, as defined in ORS 323.015, shall pay a tax upon distributions of cigarettes at the rate of five mills for the distribution of each cigarette in this state occurring prior to January 1, [2002] 2004.

(2) Any cigarette with respect to which a tax has once been imposed under ORS 323.005 to 323.455 and 323.990 and this section shall not be subject upon a subsequent distribution to the taxes imposed by ORS 323.005 to 323.455 and 323.990 and this section.

(3) The moneys received under this section shall be paid over and credited to the General Fund and shall be used exclusively to fund the Oregon Health Plan as described under ORS 414.019.

SECTION 2. ORS 323.500 is amended to read:

323.500. As used in the Tobacco Products Tax Act, unless the context otherwise requires:

(1) “Business” means any trade, occupation, activity or enterprise engaged in for the purpose of selling or distributing tobacco products in this state.

(2) “Cigar” means a roll for smoking that is of any size or shape and that is made wholly or in part of tobacco, irrespective of whether the tobacco is pure or flavored, adulterated or mixed with any other ingredient, if the roll has a wrapper made wholly or in greater part of tobacco and if 1,000 of these rolls collectively weigh more than three pounds. “Cigar” does not include a cigarette, as defined under ORS 323.010 (1).

[(2)] (3) “Department” means the Department of Revenue.

[(3)] (4) “Distributor” means:

(a) Any person engaged in the business of selling tobacco products in this state who brings, or causes to be brought, into this state from without the state any tobacco products for sale;

(b) Any person who makes, manufactures or fabricates tobacco products in this state for sale in this state; or

(c) Any person engaged in the business of selling tobacco products without this state who ships or transports tobacco products to retailers in this state, to be sold by those retailers.

[(4)] (5) “Manufacturer” means a person who manufactures and sells tobacco products.

[(5)] (6) “Place of business” means any place where tobacco products are sold or where tobacco products are manufactured, stored or kept for the purpose of sale or consumption, including any vessel, vehicle, airplane, train or vending machine.

[(6)] (7) “Retail dealer” means every person, other than a distributor, manufacturer or subjobber who is engaged in the business of selling or otherwise dispensing to ultimate consumers any tobacco product. The term also includes the operators of or recipients of revenue from all places such as smoke shops, cigar stores and vending machines, where tobacco products are made or stored for ultimate sale to consumers.

[(7)] (8) “Sale” means any transfer, exchange or barter, in any manner or by any means whatsoever, for a consideration, and includes and means all sales made by any person. It includes a gift by a person engaged in the business of selling tobacco products, for advertising, as a means of evading the provisions of ORS 323.500 to 323.645, or for any other purposes whatsoever.

[(8)] (9) “Subjobber” means any person, other than a manufacturer or distributor, who buys tobacco products from a distributor and sells them to persons other than the ultimate consumers.

[(9)] (10) “Tobacco products” means cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking, but shall not include cigarettes as defined in ORS 323.010 (1).

[(10)] (11) “Wholesale sales price” means the established price for which a manufacturer sells a tobacco product to a distributor, after any discount or other reduction for quantity or cash.

SECTION 3. ORS 323.505 is amended to read:

323.505. (1) A tax is hereby imposed upon the sale, storage, use, consumption, handling or distribution of all tobacco products in this state [at the rate of 65 percent of the wholesale sales price of such tobacco products]. The tax shall be imposed on distributors at the time the distributor:

(a) Brings, or causes to be brought, into this state from without the state tobacco products for sale, storage, use or consumption;

(b) Makes, manufactures or fabricates tobacco products in this state for sale, storage, use or consumption in this state; or

(c) Ships or transports tobacco products to retail dealers in this state, to be sold, stored, used or consumed by those retail dealers.

(2) The tax imposed under this section shall be imposed at the rate of:

(a) Sixty-five percent of the wholesale sales price of cigars, but not to exceed 50 cents per cigar; or

(b) Sixty-five percent of the wholesale sales price of all tobacco products that are not cigars.

[(2)] (3) If the tax imposed under this section does not equal an amount calculable to a whole cent, the tax shall be equal to the next highest whole cent. However, the amount remitted to the Department of Revenue by the taxpayer for each quarter shall be equal only to 98.5 percent of the total taxes due and payable by the taxpayer for the quarter.

[(3)] (4) No tobacco product shall be subject to the tax if the base product or other intermediate form thereof has previously been taxed under this section.

[(4)] (5) Notwithstanding any provision of the Tobacco Products Tax Act to the contrary, the tax imposed by this section may be paid by the manufacturer or any other person or entity instead of the taxpayer from whom such tax would otherwise be due. In the event of payment by another person or entity, the taxpayer shall be excused from payment of the amount of the tax which has been so paid if, together with the return required under ORS 323.510, the taxpayer supplies evidence satisfactory to the department or in a form prescribed by the department showing that such tax has been so paid.

SECTION 4. The amendments to ORS 323.500 and 323.505 by sections 2 and 3 of this 2001 Act apply to tobacco products tax reporting periods beginning on or after January 1, 2002.

Approved by the Governor August 16, 2001

Filed in the office of Secretary of State August 16, 2001

Effective date January 1, 2002

__________