House bill 615, by Representative Horner, in its original form would have extended credit to retail dealers of tobacco products, but at the same time establish a delinquent list issued by the Division of Alcohol Beverage and Tobacco for delinquent credit payment transaction of tobacco retail dealers, very similar to credit law regulation provisions for alcoholic beverages. The bill also had significant negative fiscal impact on state trust funds.

In lieu of the bills' original language, we worked with the tobacco wholesalers to help them recover taxes paid on delinquent retail accounts without creating another burdensome, problematic delinquent list maintained and enforced by the division.

In the House Business and Consumer Affairs Committee this week, the bill was changed to allow “at the discretion of the wholesale dealer making the sale, credit for the sale of tobacco products may be extended to a retail dealer. Upon submission of proof to the division by a wholesale dealer, the division shall suspend or deny the renewal of a retail permit who has failed to satisfy the terms of a civil judgment obtained against retail dealer for failure to pay for tobacco productspurchased from a wholesale dealer. The dealer submits proof to the division that it has entered into an agreed payment plan with said wholesale dealer or satisfied the civil judgment in full.”

Another controversial amendment also passed in committee that basically bans roll-your-own tobacco stores. These stores are selling tobacco products at a very reduced price by avoiding state cigarette taxes.

The senate bill by Senator Hays, SB 1008, has not been heard in committee. We are appreciative of the wholesalers and House sponsor of finding an alternative to the creation of a state delinquent list.

RELATED BILLS
SB 1008 Relating to Tobacco Products, Hays
HB 615 Relating to Tobacco Products, Horner

UPDATES
2/17/12
HB 615 in its original form would have extended credit to retail dealers of tobacco products, but at the same time establish a delinquent list issued by the Division of Alcoholic Beverages and Tobacco for delinquent credit payment transaction of tobacco retail dealers, very similar to credit law regulation provisions for alcoholic beverages. We are appreciative to the wholesalers and House sponsor for finding an alternative to the creation of a state delinquent list.

CS/HB 615 by Representative Horner passed out of the House Finance & Tax committee Wednesday. The Committee Substitute will be heard next in the House Economic Affairs Committee, the last stop before reaching the House floor. The CS that passed out of House Finance & Tax committee revises the definition of “manufacturer” to include persons that provide for the use or lease of cigarette manufacturing machines at retail establishments (roll-your-own). An amendment to HB 615 extended the effective date to July 1, 2014. The bill also allows, at the discretion of the wholesale dealer making the sale, credit for the sale of tobacco products to be extended to a retail dealer. It allows the Division of Alcoholic Beverages and Tobacco in the Department of Business and Professional Regulation to suspend or deny the renewal of a retail permit to any person, corporation, officer, or stockholder of a corporation who has failed to satisfy the terms of a civil judgment against them for failure to pay for tobacco products purchased from a wholesale dealer. The license will remain suspended until the retail dealer submits proof to the division that it has entered an agreed payment plan with the wholesale dealer or satisfied the civil judgment in full. SB 1008 by Senator Hays with similar language has not yet been heard in committee.