NATO State Legislative Update

More final action on tobacco-related bills

During the past week, final action was taken on tobacco-related legislation in several states. In Illinois, the legislature adjourned on May 31st without passing a bill to raise the state's cigarette tax rate. In New Hampshire, after the House of Representatives passed an amendment to a technical corrections bill to lower the cigarette tax by $.10 per pack and decrease the tax rate on other tobacco products, the New Hampshire Senate voted 13-11 to defeat the cigarette and other tobacco products tax reduction.

The Vermont governor signed a bill that was passed by the state legislature [image-nocss] that increases the tax on cigarettes and little cigars by 38 cents per pack from the current $2.24 per pack to a new rate of $2.62 per pack. The tax on roll-your-own (RYO) tobacco will increase to 13.1 cents per 0.0325 ounces of roll-your own tobacco. The tax on large cigars also increases with a tax rate of 92% on the wholesale price of cigars that have a wholesale price less than $2.18 each, a tax of $2 each for cigars with a wholesale price from $2.18 to less than $10 per cigar, and a tax of $4 each for cigars with a wholesale price of $10 or more per cigar. All of these tax increases take effect on July 1, 2011.

There is a floor stock tax imposed on all wholesalers and retailers of cigarettes, little cigars or RYO tobacco that have more than 10,000 cigarettes or little cigars in inventory or which have $500 or more of wholesale value of RYO tobacco for sale on July 1, 2011. The amount of the tax shall be the amount by which the new tax exceeds the amount of the tax already paid for each cigarette, little cigar or RYO tobacco in the possession or control of the wholesaler or retailer at 12:01 a.m. on July 1, 2011. Each wholesaler and retailer subject to the tax is required to file a report with the Vermont commissioner of revenue on or before July 25, 2011 and pay the amount of the floor stocks tax on or before July 25, 2011.

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