Here's the testimony that bothers me Bill - it's from the Hawaii Department of Taxation,' below that is the actual bill deferred till 2/25....
"The (State) Department (of Taxation) provides the following technical considerations for the Committee's
consideration. First, the Department notes that the definition of "electronic smoking device" in
this measure includes "cartridges" and "other components of the device." Based on Section 1 of
this bill, the intent appears to be to tax each individual device, cartridge, refill, etc., whether sold
separately or sold in conjunction with devices themselves. If it is the Legislature's intent such
components be taxed when sold separately, as opposed to merely when sold in conjunction with
devices themselves, the Department recommends changing the term "electronic smoking device"
to "electronic smoking product" and amending the definition as follows:
"Electronic smoking [device] product" means any electronic product that can be used to vaporize and deliver nicotine or other substances to the person inhaling from the device, including but not limited to an electronic cigarette, electronic cigar, electronic cigarillo, or lectronic pipe, and also includes any cartridge or other component of [the] such device or related product, whether sold separately or sold in conjunction with the device.
Along with the change to the definition, the Department further recommends the
following change to the proposed new Section 245-3(a)(14), Hawaii Revised Statutes:
(14) An excise tax equal to per cent of the wholesale price of each [electronic smoking device kit, electronic smoking device nicotine cartridge, or electronic smoking device nicotine refill] electronic smoking product sold, used, or possessed by a wholesaler or dealer on or after [October 1, 2014] January 1, 2015, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the
wholesaler or dealer.
Second, the Department recommends the changes to Section 245-3(a)(12), HRS, be
deleted as they would impose the tax retroactively on sellers of electronic smoking devices and
products.
Lastly, as noted in the recommended change to Section 245-3(a)(14), HRS, above, the Department requests this bill be amended to apply the tax to sales occurring on and after January 1, 2015, to provide the Department sufficient time to make the necessary changes to the forms and instructions. Thank you
RELATING TO ELECTRONIC SMOKING DEVICES.
Report Title: Electronic Smoking Device; License; Permit; Smoking; Cigarettes; Tobacco Products; Restrictions; Excise Tax
Description: Includes electronic smoking devices within the definition of "tobacco products" under chapter 245, Hawaii Revised Statutes, thereby subjecting wholesalers, dealers, and retailers of electronic smoking devices to the same licensing and permitting requirements as wholesalers, dealers, and retailers of cigarettes and other tobacco products. Increases the license and permit fees for persons engaged as a wholesaler or dealer or retailer of cigarettes or tobacco products, including electronic smoking devices. Establishes an excise tax on electronic smoking devices equal to an unspecified per cent of the wholesale price of each electronic smoking device kit, electronic smoking device nicotine cartridge, or electronic smoking device nicotine refill sold, used, or possessed by a wholesaler or dealer on or after October 1, 2014. Amends Hawaii's anti-smoking statute to prohibit the use of electronic smoking devices in places open to the public and places of employment. Clarifies that the sale, distribution, sampling, or display of electronic smoking devices and the distribution of promotional materials, or coupons redeemable for promotional materials, for tobacco products, including electronic smoking devices, are restricted in the same manner as cigarettes and other tobacco products. License and permit fees and excise tax effective 01/01/2015. (SD1)
