SENATE BILL 158
49th legislature - STATE OF NEW MEXICO - second session, 2010
INTRODUCED BY
Clinton D. Harden
AN ACT
RELATING TO TAXATION; AMENDING THE CIGARETTE TAX ACT; REPEALING THE EXEMPTION FOR TRIBAL CIGARETTE SALES TO NON-TRIBAL MEMBERS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-12-2 NMSA 1978 (being Laws 1971, Chapter 77, Section 2, as amended) is amended to read:
"7-12-2. DEFINITIONS.--As used in the Cigarette Tax Act:
A. "cigarette" means:
(1) any roll of tobacco or any substitute for tobacco wrapped in paper or in any substance not containing tobacco;
(2) any roll of tobacco that is wrapped in any substance containing tobacco, other than one hundred percent natural leaf tobacco, which, because of its appearance, the type of tobacco used in the filler, its packaging and labeling, or its marketing and advertising, is likely to be offered to, or purchased by, consumers as a cigarette, as described in Paragraph (1) of this subsection;
(3) bidis and kreteks; or
(4) any other roll of tobacco that is defined as a "cigarette" in Subsection D of Section 6-4-12 NMSA 1978;
B. "contraband cigarettes" means cigarette packages with counterfeit stamps, counterfeit cigarettes, cigarettes that have false or fraudulent manufacturing labels, cigarettes not sold in packages of five, ten, twenty or twenty-five, cigarette packages without the tax or tax-exempt stamps required by the Cigarette Tax Act and cigarettes produced by a manufacturer or in a brand family not included in the directory;
C. "department" means the taxation and revenue department, the secretary of taxation and revenue or any employee of the department exercising authority lawfully delegated to that employee;
D. "directory" means a listing of tobacco product manufacturers and brand families that is developed, maintained and published by the attorney general under the Tobacco Escrow Fund Act;
E. "distributor" means a person licensed pursuant to the Cigarette Tax Act to sell or distribute cigarettes in New Mexico. "Distributor" does not include:
(1) a retailer;
(2) a cigarette manufacturer, export warehouse proprietor or importer with a valid permit pursuant to 26 U.S.C. 5713, if that person sells cigarettes in New Mexico only to distributors that hold valid licenses under the laws of a state or sells to an export warehouse proprietor or to another manufacturer; or
(3) a common or contract carrier transporting cigarettes pursuant to a bill of lading or freight bill, or a person who ships cigarettes through the state by a common or contract carrier pursuant to a bill of lading or freight bill;
F. "license" means a license granted pursuant to the Cigarette Tax Act that authorizes the holder to conduct business as a manufacturer or distributor of cigarettes;
G. "manufacturer" means a person that manufactures, fabricates, assembles, processes or labels a cigarette or that imports from outside the United States, directly or indirectly, a finished cigarette for sale or distribution in the United States;
H. "master settlement agreement" means the settlement agreement and related documents entered into on November 23, 1998 by the state and leading United States tobacco product manufacturers;
I. "package" means an individual pack, box or other container; "package" does not include a container that itself contains other containers, such as a carton of cigarettes;
J. "retailer" means a person, whether located within or outside of New Mexico, that sells cigarettes at retail to a consumer in New Mexico and the sale is not for resale;
K. "stamp" means an adhesive label issued and authorized by the department to be affixed to cigarette packages for excise tax purposes and upon which is printed a serial number and the words "State of New Mexico" and "tobacco tax";
L. "tax stamp" means a stamp that has a specific cigarette tax value pursuant to the Cigarette Tax Act; [and]
M. "tax-exempt stamp" means a stamp that indicates a tax-exempt status pursuant to the Cigarette Tax Act; and
N. "tribe" means a federally recognized Indian nation, tribe or pueblo located wholly or partially in New Mexico."
Section 2. Section 7-12-3 NMSA 1978 (being Laws 1971, Chapter 77, Section 3, as amended) is amended to read:
"7-12-3. EXCISE TAX ON CIGARETTES--RATES.--
A. For the privilege of selling, giving or consuming cigarettes in New Mexico, there is levied an excise tax at the following rates for each cigarette sold, given or consumed in this state:
(1) four and fifty-five hundredths cents ($.0455) if the cigarettes are packaged in lots of twenty or twenty-five;
(2) nine and ten-hundredths cents ($.091) if the cigarettes are packaged in lots of ten; or
(3) eighteen and twenty-hundredths cents ($.182) if the cigarettes are packaged in lots of five.
B. The tax imposed by this section shall be referred to as the "cigarette tax".
C. It shall be presumed that all cigarettes within the state are subject to the cigarette tax until the contrary is established, and the burden of proof that any cigarettes are not taxable shall be upon the person in possession of the cigarettes."
Section 3. Section 7-12-4 NMSA 1978 (being Laws 1971, Chapter 77, Section 4, as amended) is amended to read:
"7-12-4. EXEMPTION.--
A. Exempted from the cigarette tax are sales of cigarettes:
(1) to the United States or any agency or instrumentality thereof or the state of New Mexico or any political subdivision thereof; and
[(2) to the governing body, or to any enrolled tribal member licensed by the governing body, of any Indian nation, tribe or pueblo for use or sale on that reservation or pueblo grant; and
(3)] (2) sales [which] that the state is prohibited from taxing by a provision of federal law, the United States constitution or the constitution of the state of New Mexico.
B. As used in this section, the term "agency or instrumentality" does not include persons who are agents or instrumentalities of the United States for a particular purpose or only when acting in a particular capacity or corporate agencies or instrumentalities."
Section 4. Section 7-12-19 NMSA 1978 (being Laws 2006, Chapter 91, Section 15) is amended to read:
"7-12-19. INTERGOVERNMENTAL AGREEMENTS--NO WAIVER OF SOVEREIGN IMMUNITY.--
A. The department may enter into an intergovernmental agreement with a tribe to:
(1) enforce, administer or otherwise implement the provisions of the Cigarette Tax Act;
(2) increase the ability of the department to account for packages of cigarettes imported into, sold or transferred within and exported from the state; and
(3) provide for cooperative tax collection or tax administration of the cigarette tax.
B. The department, in conjunction with each tribe, shall determine the number of tax exempt stamps needed to be provided to distributors for cigarette sales to tribal members on tribal land.
[B.] C. Nothing in the Cigarette Tax Act shall be construed to waive or restrict the sovereign immunity of a tribe or the state.
[C. As used in this section, "tribe" means an Indian nation, tribe or pueblo located wholly or partially in New Mexico.]"
Section 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2010.
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