Relating to administration of and taxation on tobacco-related products including imposing a tax on alternative nicotine products and vapor products

This bill relates to administration of and taxation on tobacco-related products including imposing a tax on alternative nicotine products and vapor products. DIVISION I —— TAXATION ON TOBACCO-RELATED PRODUCTS. TOBACCO PRODUCTS DEFINITION. The bill modifies the definition of tobacco products to include any form of tobacco for chewing or smoking consumption in any manner. NICOTINE DEFINITION. The bill defines “nicotine” to mean any form of the chemical nicotine, including any salt or complex, from any source, and includes nicotinic alkaloids and nicotine analogs and any substance intended to mimic or replicate the pharmacological effect of nicotine. The bill specifies for purposes of the definition of nicotine, any communication by, or on behalf of, the manufacturer, distributor, or retailer of a tobacco product that indicates that the product contains a nicotine analog constitutes presumptive evidence that the product contains a nicotine analog. CIGARETTE TAXATION.3 cents per cigarette.86. The bill also raises the tax on loose tobacco products inserted into a vending machine from which assembled cigarettes are dispensed.43 cents. The bill creates an administrative process where the cigarette tax may be increased in proportion to any retail sales price increases from year to year. The bill requires the department of revenue (department) to conduct a statewide survey of retail cigarette prices to determine the amount of increase from year to year. The tax is not increased if the retail sales price of cigarettes does not increase from year to year. In conducting the statewide survey of retail cigarette prices, the bill prohibits the department from considering state or federal tax increases on cigarettes in the survey. If the cigarette tax is increased through the administrative process, the bill requires the department to publish the new rate in the Iowa administrative bulletin and publish the new rate on the internet site of the department by December 31 following the determination date to adjust the tax rate. The calculation and publication of the adjusted rate is exempt from Code chapter 17A (Iowa administrative procedures Act). By increasing the cigarette tax in the bill, the inventory tax is also assessed on cigarettes remaining in inventories taxed under the previous tax rate that is equal to the difference between the previous tax rate and the new tax rate.35A. ALTERNATIVE NICOTINE PRODUCTS —— LIMITATIONS. The bill prohibits a package of alternative nicotine products from containing more than 20 separately consumable products within the package. TOBACCO PRODUCTS DEFINITION. The bill modifies the definition of tobacco products to include snuff and snuff flour and makes other changes to the definition. TOBACCO PRODUCT, ALTERNATIVE NICOTINE PRODUCT, AND VAPOR PRODUCT TAXATION.43(1)(b) for a combined rate of 50 percent tax on the wholesale sales price. The bill combines the 22 percent rate and the 28 percent rate and imposes the combined 50 percent rate on the wholesale sales price on more products including alternative nicotine products, vapor products, cigars, and snuff.86.19 per ounce tax imposed on snuff.86 rate upon consumers for the use or storage of tobacco products, alternative nicotine products, and vapor products, if the tax imposed on wholesale sales price tax has not otherwise been paid at the wholesale level. By imposing new tax rates on alternative nicotine products, vapor products, cigars, and snuff, the inventory tax may be assessed on any nicotine products, vapor products, cigars, and snuff remaining in inventories taxed under the previous tax rate that is equal to the difference between the previous tax rate and the new tax rate. DIVISION II —— CONFORMING CHANGES. The bill make numerous conforming changes by adding alternative nicotine products and vapor products to reflect the changes made by the bill.