SENATE BILL 178

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

Cliff R. Pirtle

AN ACT

RELATING TO TAXATION; CHANGING THE TAX RATE FOR FINE CIGARS IN THE TOBACCO PRODUCTS TAX ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 7-12A-2 NMSA 1978 (being Laws 1986, Chapter 112, Section 3, as amended) is amended to read:

     "7-12A-2. DEFINITIONS.--As used in the Tobacco Products Tax Act:

          A. "department" means the taxation and revenue department, the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

          B. "distribute" means to sell or to give;

          C. "engaging in business" means carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit;

          D. "fine cigar" means a roll of tobacco that is wrapped in one hundred percent natural leaf tobacco;

          [D.] E. "first purchaser" means a person engaging in business in New Mexico [who] that manufactures tobacco products or [who] that purchases or receives on consignment tobacco products from any person outside of New Mexico, which tobacco products are to be distributed in New Mexico in the ordinary course of business;

          [E.] F. "person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate, limited liability company, limited liability partnership, other association or gas, water or electric utility owned or operated by a county or municipality or other entity of the state; "person" also means, to the extent permitted by law, a federal, state or other governmental unit or subdivision or an agency, department or instrumentality;

          [F.] G. "product value" means the amount paid, net of any discounts taken and allowed, for tobacco products or, in the case of tobacco products received on consignment, the value of the tobacco products received or, in the case of tobacco products manufactured and sold in New Mexico, the proceeds from the sale by the manufacturer of the tobacco products; and

          [G.] H. "tobacco product" means any product, other than cigarettes, made from or containing tobacco."

     SECTION 2. Section 7-12A-3 NMSA 1978 (being Laws 1986, Chapter 112, Section 4, as amended) is amended to read:

     "7-12A-3. IMPOSITION AND RATE OF TAX--DENOMINATION AS "TOBACCO PRODUCTS TAX"--DATE PAYMENT OF TAX DUE.--

          A. For the manufacture or acquisition of tobacco products in New Mexico to be distributed in the ordinary course of business and for the consumption of tobacco products in New Mexico, there is imposed an excise tax at the [rate of twenty-five percent of the product value of the tobacco products] following rates:

                (1) if the tobacco product is not a fine cigar, twenty-five percent of the product value; and

                (2) if the tobacco product is one or more fine cigars:

                     (a) five cents ($.05) per cigar in a package containing one unit; and

                     (b) three cents ($.03) per cigar in a package containing multiple units.

          B. The tax imposed by Subsection A of this section may be referred to as the "tobacco products tax".

          C. The tobacco products tax shall be paid by the first purchaser on or before the twenty-fifth day of the month following the month in which the taxable event occurs."

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2016.

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