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

 
 
 
     71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 3782
 
                           C-Engrossed
 
                         House Bill 3433
                  Ordered by the Senate June 29
 Including House Amendments dated April 26 and Senate Amendments
                    dated June 4 and June 29
 
Sponsored by Representatives JENSON, MARCH; Representative
  DINGFELDER
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
 
  Extends sunset date on cigarette tax dedicated to funding
Oregon Health Plan to January 1, 2004.
  Limits maximum tobacco products tax on cigars to 50 cents per
cigar.
   { +  Imposes 10 cents per pack tax on cigarettes distributed
in state on or after January 1, 2002, and prior to January 1,
2004.  Directs Department of Human Services to establish, by
rule, senior citizen prescription drug assistance program.
Requires that 90 percent of moneys from tax be used for
program. + }
 
                        A BILL FOR AN ACT
Relating to taxation; creating new provisions; amending ORS
  323.500 and 323.505 and section 3, chapter 385, Oregon Laws
  1995; appropriating money; 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. + }
  SECTION 5.  { + Section 6 of this 2001 Act is added to and made
a part of ORS 323.005 to 323.455. + }
  SECTION 6.  { + (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 on or after January 1, 2002,
and prior to January 1, 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
may 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) Of the moneys received under this section:
  (a) Ten percent, but not to exceed $2 million, shall be
distributed as moneys received from the tax imposed under ORS
323.030 (1) are distributed under ORS 323.455; and
  (b) The remaining balance shall be paid over and credited to
the Oregon Senior Prescription Drug Assistance Fund established
under section 7 of this 2001 Act. + }
  SECTION 7.  { + (1) The Oregon Senior Prescription Drug
Assistance Fund is established separate and distinct from the
General Fund.  Interest earned by the fund shall be retained by
the fund.
  (2) Cigarette tax revenues credited to the Oregon Senior
Prescription Drug Assistance Fund pursuant to section 6 of this
2001 Act and other moneys in the fund are dedicated to and must
be used for funding a senior citizen prescription drug assistance
program established by the Department of Human Services by rule
that provides assistance to Oregon residents (65 years of age or
older) in purchasing prescription drugs, if they do not otherwise
have insurance coverage for prescription drugs. The assistance
for which the funds may be used includes but is not limited to
reimbursement of pharmacies that participate in the program.
  (3) Moneys in the Oregon Senior Prescription Drug Assistance
Fund are continuously appropriated to the Department of Human
Services for the purposes set forth in subsection (2) of this
section. + }
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