AN
ACT Relating to revising the tobacco products tax by imposing the tax upon
those persons who acquire tobacco products for resale from persons who are
immune from state tax; amending RCW 82.26.010, 82.26.020, 82.26.025, and
82.26.030; adding a new section to chapter 82.26 RCW; and providing an
effective date.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
82.26.010 and 1995 c 278 s 16 are each amended to read as follows:
As
used in this chapter:
(1)
"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 RCW 82.24.010;
(2)
"Manufacturer" means a person who manufactures and sells tobacco
products;
(3)
"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 retailers in
this state, to be sold by those retailers, (d) any person engaged in the
business of selling tobacco products in this state who handles for sale any
tobacco products that are within this state but upon which tax has not been
imposed;
(4)
"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;
(5)
"Retailer" means any person engaged in the business of selling
tobacco products to ultimate consumers;
(6)
"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 this chapter, or for any other purposes whatsoever;
(7)
"Wholesale sales price" means the established price for which a
manufacturer sells a tobacco product to a distributor, exclusive of any
discount or other reduction;
(8)
"Business" means any trade, occupation, activity, or enterprise
engaged in for the purpose of selling or distributing tobacco products in this
state;
(9)
"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)
"Retail outlet" means each place of business from which tobacco
products are sold to consumers;
(11)
"Department" means the state department of revenue;
(12)
"Person" means any individual, receiver, administrator, executor,
assignee, trustee in bankruptcy, trust, estate, firm, copartnership, joint
venture, club, company, joint stock company, business trust, municipal
corporation, the state and its departments and institutions, political
subdivision of the state of Washington, corporation, limited liability company,
association, society, or any group of individuals acting as a unit, whether
mutual, cooperative, fraternal, nonprofit, or otherwise. The term excludes any
person immune from state taxation, including the United States or its
instrumentalities, and federally recognized Indian tribes and enrolled tribal
members, conducting business within Indian country;
(13)
"Indian country" means the same as defined in chapter 82.24 RCW.
Sec.
2. RCW
82.26.020 and 1993 c 492 s 309 are each amended to read as follows:
(1)
There is levied and there shall be collected a tax upon the sale, use, consumption,
handling, or distribution of all tobacco products in this state at the rate of
forty-five percent of the wholesale sales price of such tobacco products.
(2)
Taxes under this section shall be imposed at the time the distributor (a)
brings, or causes to be brought, into this state from without the state tobacco
products for sale, (b) makes, manufactures, or fabricates tobacco products in
this state for sale in this state, ((or)) (c) ships or transports
tobacco products to retailers in this state, to be sold by those retailers,
or (d) handles for sale any tobacco products that are within this state but
upon which tax has not been imposed.
(3)
An additional tax is imposed equal to seven percent multiplied by the tax
payable under subsection (1) of this section.
(4)
An additional tax is imposed equal to ten percent of the wholesale sales price
of tobacco products. The moneys collected under this subsection shall be
deposited in the health services account created under RCW 43.72.900.
Sec.
3. RCW
82.26.025 and 1999 c 309 s 926 are each amended to read as follows:
(1)
In addition to the taxes imposed under RCW 82.26.020, there is levied and there
shall be collected a tax upon the sale, use, consumption, handling, or distribution
of all tobacco products in this state at the rate of sixteen and three-fourths
percent of the wholesale sales price of such tobacco products. Such tax shall
be imposed at the time the distributor (a) brings, or causes to be brought,
into this state from without the state tobacco products for sale, (b) makes,
manufactures, or fabricates tobacco products in this state for sale in this
state, ((or)) (c) ships or transports tobacco products to retailers in
this state, to be sold by those retailers, or (d) handles for sale any
tobacco products that are within this state but upon which tax has not been
imposed.
(2)
The moneys collected under this section shall be deposited as follows:
(a)
For the period ending July 1, 1999, in the water quality account under RCW
70.146.030;
(b)
For the period beginning July 1, 1999, through June 30, 2001, fifty percent
into the violence reduction and drug enforcement account under RCW 69.50.520
and fifty percent into the salmon recovery account;
(c)
For the period beginning July 1, 2001, through June 30, 2021, into the water
quality account under RCW 70.146.030; and
(d)
For the period beginning July 1, 2021, in the general fund.
Sec.
4. RCW
82.26.030 and 1961 c 15 s 82.26.030 are each amended to read as follows:
It
is the intent and purpose of this chapter to levy a tax on all tobacco products
sold, used, consumed, handled, or distributed within this state and to collect
the tax from the distributor as defined in RCW 82.26.010. It is the further
intent and purpose of this chapter to impose the tax once, and only once,
on all tobacco products for sale in this state, but nothing in this chapter
shall be construed to exempt any person taxable under any other law or under
any other tax imposed under Title 82 RCW.
NEW
SECTION. Sec. 5. A
new section is added to chapter 82.26 RCW to read as follows:
(1)
The department shall by rule establish the invoice detail required under RCW
82.26.060 for a distributor under RCW 82.26.010(3)(d) and for those invoices
required to be provided to retailers under RCW 82.26.070.
(2)
If a retailer fails to keep invoices as required under chapter 82.32 RCW, the
retailer is liable for the tax owed on any uninvoiced tobacco products but not
penalties and interest, except as provided in subsection (3) of this section.
(3)
If the department finds that the nonpayment of tax by the retailer was willful
or if in the case of a second or plural nonpayment of tax by the retailer,
penalties and interest shall be assessed in accordance with chapter 82.32 RCW.
NEW SECTION. Sec. 6. This
act takes effect July 1, 2002.
