75th OREGON LEGISLATIVE ASSEMBLY--2009 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 369
 
                         House Bill 2160
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor Theodore R.
  Kulongoski for Department of Revenue)
 
 
                             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 as
introduced.
 
  Authorizes Department of Revenue to require verification of
payment of tax on moist snuff and to adopt rules establishing
policies and procedures for verifying tax payment.
  Continuously appropriates moneys from suspense account to
department for administration of cigarette tax and other tobacco
tax programs.
 
                        A BILL FOR AN ACT
Relating to administration of tobacco taxes; creating new
  provisions; amending ORS 323.455, 323.500, 323.510, 323.575 and
  323.625; and appropriating money.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 323.575 is amended to read:
  323.575. The Department of Revenue shall administer and enforce
ORS 323.500 to 323.645. The department is authorized to
  { - establish those rules and - }   { + adopt rules
establishing policies and + } procedures for the implementation
and enforcement of ORS 323.500 to 323.645 that are consistent
with its provisions and considered necessary and
appropriate { + , including rules for verifying payment of tax on
moist snuff + }.
  SECTION 2. ORS 323.455 is amended to read:
  323.455. (1) All moneys received by the Department of Revenue
from the tax imposed by ORS 323.030 (1) shall be paid over to the
State Treasurer to be held in a suspense account established
under ORS 293.445.  { + The department may pay expenses for
administration of ORS 323.005 to 323.482 out of moneys received
from the tax imposed under ORS 323.030 (1). Amounts necessary to
pay administrative expenses are continuously appropriated to the
department from the suspense account. + } After the payment
of { +  administrative expenses and + } refunds, 89.65 percent
shall be credited to the General Fund, 3.45 percent is
appropriated to the cities of this state, 3.45 percent is
appropriated to the counties of this state and 3.45 percent is
continuously appropriated to the Department of Transportation for
the purpose of financing and improving transportation services
for elderly individuals and individuals with disabilities as
provided in ORS 391.800 to 391.830.
 
  (2) The moneys so appropriated to cities and counties shall be
paid on a monthly basis within 35 days after the end of the month
for which a distribution is made. Each city shall receive such
share of the money appropriated to all cities as its population,
as determined under ORS 190.510 to 190.590 last preceding such
apportionment, bears to the total population of the cities of the
state, and each county shall receive such share of the money as
its population, determined under ORS 190.510 to 190.590 last
preceding such apportionment, bears to the total population of
the state.
  (3) The moneys appropriated to the Department of Transportation
under subsection (1) of this section shall be distributed and
transferred to the Elderly and Disabled Special Transportation
Fund established by ORS 391.800 at the same time as the cigarette
tax moneys are distributed to cities and counties under this
section.
  (4) Of the moneys credited to the General Fund under this
section 51.92 percent shall be dedicated to funding the
maintenance and expansion of the number of persons eligible for
medical assistance under the Oregon Health Plan, or to funding
the maintenance of the benefits available under the Oregon Health
Plan, or both, and 5.77 percent shall be credited to the Tobacco
Use Reduction Account established under ORS 431.832.
  SECTION 3. ORS 323.625 is amended to read:
  323.625. All moneys received by the Department of Revenue under
ORS 323.500 to 323.645 shall be deposited in the State Treasury
and credited to a suspense account established under ORS
293.445. { +  The department may pay expenses for administration
of ORS 323.500 to 323.645 out of moneys received from the tax
imposed under ORS 323.505 and 323.565. Amounts necessary to pay
administrative expenses are continuously appropriated to the
department from the suspense account. + } After  { + the + }
payment of  { +  administrative expenses and + } refunds or
credits arising from erroneous overpayments, the balance of the
money shall be credited to the General Fund. Of the amount
credited to the General Fund under this section 41.54 percent
shall be dedicated to funding the maintenance and expansion of
the number of persons eligible for medical assistance under the
Oregon Health Plan, or to funding the maintenance of the benefits
available under the Oregon Health Plan, or both, and 4.62 percent
shall be credited to the Tobacco Use Reduction Account
established under ORS 431.832.
  SECTION 4. ORS 323.500 is amended to read:
  323.500. As used in ORS 323.500 to 323.645, 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 in ORS 323.010.
  (3) 'Consumer' means any person who purchases tobacco products
in this state for the person's use or consumption or for any
purpose other than for reselling the tobacco products to another
person.
  (4) 'Contraband tobacco products' means tobacco products or
packages containing tobacco products:
  (a) That do not comply with the requirements of ORS 323.500 to
323.645;
  (b) That do not comply with the requirements of the tobacco
products tax laws of the federal government or of other states;
or
  (c) That bear trademarks that are counterfeit under ORS 647.135
or other state or federal trademark laws.
  (5) 'Department' means the Department of Revenue.
  (6) 'Distribute' means:
  (a) Bringing, or causing to be brought, into this state from
without this state tobacco products for sale, storage, use or
consumption;
  (b) Making, manufacturing or fabricating tobacco products in
this state for sale, storage, use or consumption in this state;
  (c) Shipping or transporting tobacco products to retail dealers
in this state, to be sold, stored, used or consumed by those
retail dealers;
  (d) Storing untaxed tobacco products in this state that are
intended to be for sale, use or consumption in this state;
  (e) Selling untaxed tobacco products in this state; or
  (f) As a consumer, being in possession of untaxed tobacco
products in this state.
  (7) '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;
  (c) Any person engaged in the business of selling tobacco
products without this state who ships or transports tobacco
products to retail dealers in this state, to be sold by those
retail dealers;
  (d) Any person, including a retail dealer, who sells untaxed
tobacco products in this state; or
  (e) A consumer in possession of untaxed tobacco products in
this state.
  (8) 'Manufacturer' means a person who manufactures tobacco
products for sale.
   { +  (9) 'Moist snuff' means any finely cut, ground or
powdered tobacco that is not intended to be smoked or placed in a
nasal cavity. + }
    { - (9) - }   { + (10) + } '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.
    { - (10) - }   { + (11) + } 'Retail dealer' means any person
who is engaged in the business of selling or otherwise dispensing
tobacco products to consumers. 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.
    { - (11) - }   { + (12) + } 'Sale' means any transfer,
exchange or barter, in any manner or by any means, 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
purpose.
    { - (12) - }   { + (13) + } 'Taxpayer' includes a distributor
or other person required to pay a tax imposed under ORS 323.500
to 323.645.
    { - (13) - }   { + (14) + } '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.
    { - (14) - }   { + (15) + } 'Untaxed tobacco products' means
tobacco products for which the tax required under ORS 323.500 to
323.645 has not been paid.
    { - (15) - }   { + (16) + } 'Wholesale sales price' means the
price paid for untaxed tobacco products to or on behalf of a
seller by a purchaser of the untaxed tobacco products.
  SECTION 5. ORS 323.510 is amended to read:
  323.510. (1) Except as otherwise provided in ORS 323.500 to
323.645, the tax imposed by ORS 323.505 and 323.565 shall be paid
by each distributor and each common carrier or authorized person
specified in ORS 323.565 to the Department of Revenue on or
before the last day of January, April, July and October of each
year for the preceding calendar quarter.
  (2) With each quarterly payment, the taxpayer shall submit a
return to the department, in such form and containing such
information as the department shall prescribe.
  (3) The tax, penalties and interest imposed by ORS 323.500 to
323.645 shall be a personal debt, from the time liability is
incurred, owed by the taxpayer to the State of Oregon until paid.
  (4) The returns required of distributors and common carriers or
authorized persons specified in ORS 323.565 under this section
shall be filed by the distributors, common carriers or authorized
persons regardless of whether any tax is owed by them.
  (5)(a) The department for good cause may extend the time for
making any return under ORS 323.500 to 323.645. The extension may
be granted at any time if a written request is filed with the
department within or prior to the period for which the extension
may be granted. The department may not grant an extension of more
than one month.
  (b) When the time for filing a return is extended at the
request of a taxpayer, interest shall be added at the rate
established under ORS 305.220 for each month, or fraction of a
month, from the time the return was originally required to be
filed to the time of payment.
   { +  (6) Notwithstanding subsection (1) of this section,
distributors shall prepay tax through the purchase of payment
indicia and affix verification of payment to containers of moist
snuff if required to do so by the department. The department
shall determine if this verification is practicable and helpful
in the administration of the tax required under ORS 323.500 to
323.645.  The department may adopt rules governing the required
indicia, including rules governing the type of indicia, payment
dates, refund procedures, collection procedures and other
requirements it deems necessary for verification of the payment.
The verification may be in the form of physical indicia, devices,
identifying marks or any other means that will assist the
department and others in determining whether the tax has been
paid. + }
  SECTION 6.  { + The amendments to ORS 323.575, 323.500 and
323.510 by sections 1, 4 and 5 of this 2009 Act apply to moist
snuff distributed on or after January 1, 2010. + }
  SECTION 7.  { + The amendments to ORS 323.455 and 323.625 by
sections 2 and 3 of this 2009 Act apply to moneys received by the
Department of Revenue on or after January 1, 2010. + }
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