Revenue Laws, third paragraph: Today @NCCapitol (May 13): Lawmakers pledge 'focus' as they return to work :: WRAL.com
NC Legislative committee to look at E-Cig exise tax *UPDATED 5/23/14*
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Luckily the only thing on the agenda when Nebraska goes "back to work" June 1st is to make it illegal for minors to purchase e cigarettes, and own them unless they are of legal smoking age. That law should pass immediately June 1st and take effect the day it passes. I feel bad for you though, I saw your? post on twitter I am on there too, and been gaining followers daily...tis fun!
I'm watching it online right now, they are proposing a 5 cent per ml tax on juice.
All the members voted yes to move the vapor tax forward. One member acknowledged that the tax should be lower than the traditional tax on cigarettes as the harm is substantially less. He brought up that the tax per pack on cigarettes is 45 cents (here in NC) and if they adopt the 5 cent per ml tax, there will be revenue loss in the future. It is so frustrating to see how politicians work. It is all about keeping revenue in their budget for them to spend and not about the citizens that they hurt by harmful taxes.
I do not know if this will pass into law and five cents per ml isn't going to impact my budget but I will voice my opinion anyway. Once they have a tax on the books; they could easily raise it as they need additional money (to replace the tax revenue on traditional cigarettes).
I do not know if this will pass into law and five cents per ml isn't going to impact my budget but I will voice my opinion anyway. Once they have a tax on the books; they could easily raise it as they need additional money (to replace the tax revenue on traditional cigarettes).
From the WRAL article above:
"Sen. Floyd McKissick, D-Durham, called the proposed 5 cent tax a "good place to start," but he added that lawmakers may need to consider raising it in coming years as the state budget begins to lose revenue..."
In other words, let's just get the fact that we can tax in place, then we can make it whatever we want. Camel's nose under the tent (almost literally in this case, thank you RJR).
I'm writing my (newly elected) State Senator right now. Gotta kill this thing.
"Sen. Floyd McKissick, D-Durham, called the proposed 5 cent tax a "good place to start," but he added that lawmakers may need to consider raising it in coming years as the state budget begins to lose revenue..."
In other words, let's just get the fact that we can tax in place, then we can make it whatever we want. Camel's nose under the tent (almost literally in this case, thank you RJR).
I'm writing my (newly elected) State Senator right now. Gotta kill this thing.
Budget or no budget, you'll be paying a extra tax, $1.50 on 30ml bottle for example, which is mostly PG/VG small amount on nicotine. Already wrote my rep.....
Is this e cig tax going to stack on top of the sales tax already established? This really sucks because rjr, despite the lovely reynolda village, is looking at just the cartridges, will bottles be outlawed in the future anfmd perhaps become a strict prefilled no harm cartridge?
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Anytime I ask myself if the government will tax more or tax less, I always answer "more". After I giggle at the thought of any government removing any kind of existing tax from anything (has it EVER happened?)
So yes, I suspect it will be a tax on top of the existing sales tax. I may be wrong, but I think that is even the definition of "excise tax". They would charge you a "whompalomba tax" on eliquid if they could get away with it (yes, I made that word up).
I suspect that you are right Kevin. The ultimate goal is prefilled "safe" liquid that can be sold by BT. Although they might not make the other kind illegal exactly, they will tax it out of existence.
I would disagree with any tax based on volume, although they are apparently trying to generically make this a vapor product tax. If this is to tax the "tobacco" component only then my opinion is they are unjustly taxing non tobacco products if they are generically applying $.05 per ml. The constituents of any 1ml is going to drastically differ depending on ratio of juice and concentration of nicotine. Broken in to it's parts e-juice is flavor, pg, vg, maybe distilled water, and then nicotine generally in a carrier base of pg or vg. Random out of my anus fake recipe for a 30ml concoction. 2% nicotine for 6mg/ml, 3% Distilled water, 15% flavor, 80% pg/vg. So per the generic by volume proposal one would be paying an extra ~$.05 for distilled water. If they are going to implement a tax in my humble opinion I think it should be based on mass of nicotine only otherwise will the great citizens of NC also be paying that same tax for e-liquid that contains no nicotine, because it is a vapor product?
I'm not sure what the NC proposed law is. Maybe one of the smarter guys in the room can decode what they have voted on.
I don't agree with any kind of excise tax, but I do agree with you that a by volume tax is not the way to do it. Of course the problem (from the gov't perspective) is that if they don't do it by volume, but by nic content, I could buy 0mg juice in NC, buy nic liquid from some other state, mix them together to the strength I want and skip their tax entirely.
Although in my opinion, they should be subsidizing the purchase of e-cigs, not taxing them. People who switch to e-cigs will have much lower medical costs long term, less lost productivity, and overall better health. Isn't that a good thing for NC?
I don't agree with any kind of excise tax, but I do agree with you that a by volume tax is not the way to do it. Of course the problem (from the gov't perspective) is that if they don't do it by volume, but by nic content, I could buy 0mg juice in NC, buy nic liquid from some other state, mix them together to the strength I want and skip their tax entirely.
Although in my opinion, they should be subsidizing the purchase of e-cigs, not taxing them. People who switch to e-cigs will have much lower medical costs long term, less lost productivity, and overall better health. Isn't that a good thing for NC?
Look at it this way. On a bottle of 1,000ml 100mg base, that's nearly a 50% tax if they're going to tax the PG/VG portions of the liquid. Now if they were just taxing the nicotine portion it wouldn't be so bad, but they're not. Fortunately, if you're buying nic base at 100mg and use a low nicotine mixture like 6mg, the cost of that tax drops to like $.10 to make 30ml of final product.
That being said, any tax above a normal sales tax is just taking advantage of a section of the population based on no scientific evidence of adverse effects. I wonder what they want to tax 0 nic liquid. Now all you have is VG/PG and flavor. That can easily be mixed up without incurring any tax other than sales tax.
Actually, I think it's the other way around. They apply an excise tax which makes the price for the product higher and then apply a sales tax, in effect, taxing the tax.
I have been expecting this for a long time. In the short term, I do not see it as much of a big deal. Essentially, a 15mL bottle of juice will go up $0.75. Not a significant enough increase to make me stop.
Long term, though, I worry about how far they will raise it, especially with Big Tobacco behind it. If it were to stay at $0.05 with a hanger that it would not be raised for x amount of years, I could probably get behind it.
Long term, though, I worry about how far they will raise it, especially with Big Tobacco behind it. If it were to stay at $0.05 with a hanger that it would not be raised for x amount of years, I could probably get behind it.
How submissive we've become as smokers/Vapers. When they tried to apply 5% tax on 16oz bottle of soda, everyone was up in arms. However, we accept taxes with glee. Pathetic.
It is not so much that I am submissive. I work at a B&M so this affects me more than most. I am simply saying that A) I expected it and that B) I expected a lot worse
CASAA has issued a Call to Action for North Carolina: CASAA: Call to Action! North Carolina Bill would Impose a Separate "Sin" Tax on "Vapor Products"
- Apr 2, 2009
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It appears that Reynolds' key goal in pushing HB 1050 in North Carolina (as occurred in Oklahoma last year) is to impose costly and potentially business destroying burdens on vape shops in NC and smaller e-cig and e-liquid marketers by requiring them to comply with many different provisions of the NC tobacco tax, tobacco wholesale and tobacco retail licensure statute (i.e. G.S. 105-113.3, which I haven't seen), including those delineated in HB 1050. The bill also would impose the tax on sales made by Internet vendors in NC to out-of-state consumers, and might ban the sale and/or delivery of vapor products to NC consumers by out-of-state Internet vendors.
HB 1050 would also require wholesalers and retailers of mods to obtain tobacco wholesale and/or tobacco retail licenses, and to comply with provisions of those existing laws, and the bill would require compliance with all of these and other statutory requirements by February 20, 2015, which could cause some vape shops and smaller e-cig companies in NC to shut down, and would make it more difficult and costly to open new vape shops or other e-cig businesses in NC.
Some key clauses in HB 1050 (see pages 51-53)
http://www.ncleg.net/Applications/B...nt.aspx?SessionCode=2013&DocNum=7657&SeqNum=0
Note that "consumable product" includes every single 10ml, 15ml, 30ml, etc. bottle of e-liquid sold to a consumer in NC.
Under HB 1050, these definitions for existing NC tobacco product licensing and tax laws would apply all vape shops and all other retailers, wholesalers and manufacturers of "vapor products" in NC. According to these definitions, vape shops that mix their own e-liquids (i.e. consumable product) are manufacturers and retailers, and perhaps wholesale dealers as well.
And according to the definition of "vapor products", all mods (and those who manufacture, wholesale and/or retail them in NC) would also subject to the NC tobacco product licensure laws. Since mod components are often bought and sold separately, and repackaged, it is unclear how mods could/would fit under the current NC tobacco product licensing laws (e.g. would vape shops that buy, repackage and sell mod components be considered manufacturers and retailers, and perhaps wholesalers as well?).
While cigarette and tobacco product manufacturers (especially Reynolds, Lorillard and Altria) and cigarette/tobacco wholesalers and retailers in NC have been complying with (and wrote most of) these tax and licensing laws for decades, vape shop owners and many other marketers of e-liquid and mods in NC would have to comply with all of these tobacco tax and licensure laws if/when HB 1050 is enacted, which could cost them lots of money (including legal and accounting fees), and may not be attainable for some/many vape shops in NC.
This provision of HB 1050 could make it more difficult and costly to transport "vapor products" (including mods) in NC, and might (along with other tobacco transportation restrictions in G.S. 105-113.3) ban the delivery of vapor products sold by out-of-state Internet vendors to NC consumers.
While the costs of obtaining a wholesaler dealer and/or a retail dealer license appears to be very modest, all vape shops and retailers of mods and e-liquid would have to comply, and would have to comply with additional rules and regulations in G.S. 105-113.3, which I haven't seen.
Would require vape shops (and others e-cig marketers) to pay taxes on all inventory when law goes into effect, and must submit a report to the Secretary within 20 days after the law goes into effect.
Vape shops would have to submit monthly reports to the Secretary.
This would require all vape shops and all other mod and e-liquid marketers (and all other e-cig manufacturers, wholesalers and retailers) to comply with many provisions of this law by February 20, 2015.
HB 1050 didn't list any penalties for violations, but I'm sure they are punitive and clearly delineated in the existing tobacco tax and licensure law (G.S. 105-113.3)
The text of e-cig tax provision in HB 1050 is below
PART XV. TAX VAPOR PRODUCTS AND PROHIBIT USE OF VAPOR PRODUCTS
20 IN JAILS
21 SECTION 15.1.(a) G.S. 105-113.3 reads as rewritten:
22 "§ 105-113.3. Scope of tax; administration.
23 (a) Scope. – The taxes imposed by this Article shall be collected only once on the same
24 tobacco product.product or vapor product. Except as permitted by Article 2 of this Chapter, a
25 city or county may not levy a privilege license tax on the sale of tobacco products.products or
26 vapor products.
27 (b) Administration. – Article 9 of this Chapter applies to this Article."
28 SECTION 15.1.(b) G.S. 105-113.4 reads as rewritten:
29 "§ 105-113.4. Definitions.
30 The following definitions apply in this Article:
31 …
32 (1k) Consumable product. – Any nicotine liquid solution or other material
33 containing nicotine that is depleted as a vapor product is used.
34 …
35 (4a) Integrated wholesale dealer. – A wholesale dealer who is an affiliate of a
36 manufacturer of vapor products or tobacco products, other than cigarettes,
37 and is not a retail dealer.
38 (5) Licensed distributor. – A distributor licensed under Part 2 of this Article.
39 (6) Manufacturer. – A person who produces tobacco products or vapor products
40 or a person who contracts with another person to produce tobacco products
41 or vapor products and is the exclusive purchaser of the products under the
42 contract.
43 …
44 (9) Retail dealer. – A person who sells a tobacco product or vapor product to the
45 ultimate consumer of the product.
46 …
47 (11a) Tobacco product. – A cigarette, a cigar, or any other product that contains
48 tobacco and is intended for inhalation or oral use. The term does not include
49 a vapor product.
50 (12) Repealed by Session Laws 1993, c. 442, s. 1, effective January 1, 1994.
1 (13) Use. – The exercise of any right or power over cigarettes, incident to the
2 ownership or possession thereof, other than the making of a sale thereof in
3 the course of engaging in a business of selling cigarettes. The term includes
4 the keeping or retention of cigarettes for use.
5 (13a) Vapor product. – Any noncombustible product that employs a mechanical
6 heating element, battery, or electronic circuit regardless of shape or size and
7 that can be used to produce vapor from nicotine in a solution. The term
8 includes any vapor cartridge or other container of nicotine in a solution or
9 other form that is intended to be used with or in an electronic cigarette,
10 electronic cigar, electronic cigarillo, electronic pipe, or similar product or
11 device. The term does not include any product regulated by the United States
12 Food and Drug Administration under Chapter V of the federal Food, Drug,
13 and Cosmetic Act.
14 (14) Wholesale dealer. – Either of the following:
15 a. A person who acquires vapor products or tobacco products other than
16 cigarettes for sale to another wholesale dealer or to a retail dealer.
17 b. A manufacturer of vapor products or tobacco products other than
18 cigarettes."
19 SECTION 15.1.(c) G.S. 105-113.4D reads as rewritten:
20 "§ 105-113.4D. Tax with respect to inventory on effective date of tax increase.
21 Every person subject to the taxes levied in this Article who, on the effective date of a tax
22 increase under this Article, has on hand any tobacco products or vapor products must file a
23 complete inventory of the tobacco products within 20 days after the effective date of the
24 increase, and must pay an additional tax to the Secretary when filing the inventory. The amount
25 of tax due is the amount due based on the difference between the former tax rate and the
26 increased tax rate."
27 SECTION 15.1.(d) The title of Part 3 of Subchapter I of Chapter 105 of the
28 General Statutes reads as rewritten:
29 "Part 3. Tax on Other Tobacco Products.Products and Vapor Products."
30 SECTION 15.1.(e) G.S. 105-113.35 reads as rewritten:
31 "§ 105-113.35. Tax on tobacco products other than cigarettes.cigarettes and vapor
32 products.
33 (a) Tax. –Tax on Tobacco Products. – An excise tax is levied on tobacco products other
34 than cigarettes at the rate of twelve and eight-tenths percent (12.8%) of the cost price of the
35 products. This tax does not apply to the following:
36 (1) A tobacco product sold outside the State.
37 (2) A tobacco product sold to the federal government.
38 (3) A sample tobacco product distributed without charge.
39 (a1) Tax on Vapor Products. – An excise tax is levied on vapor products at the rate of
40 five cents (5¢) per fluid milliliter of consumable product. All invoices for vapor products issued
41 by manufacturers must state the amount of consumable product in milliliters.
42 (a2) Limitation. – The taxes imposed under this section do not apply to the following:
43 (1) A tobacco product or vapor product sold outside the State.
44 (2) A tobacco product or vapor product sold to the federal government.
45 (3) A sample tobacco product or vapor product distributed without charge.
46 (b) Primary Liability. – The wholesale dealer or retail dealer who first acquires or
47 otherwise handles tobacco products or vapor products subject to the tax imposed by this section
48 is liable for the tax imposed by this section. A wholesale dealer or retail dealer who brings into
49 this State a tobacco product or vapor product made outside the State is the first person to handle
50 the tobacco product or vapor product in this State. A wholesale dealer or retail dealer who is the
51 original consignee of a tobacco product or vapor product that is made outside the State and is
shipped into the State is the first person to handle the tobacco product or vapor product in this
2 State.
3 (c) Secondary Liability. – A retail dealer who acquires non-tax-paid tobacco products
4 or vapor products subject to the tax imposed by this section from a wholesale dealer is liable
5 for any tax due on the tobacco products.products or vapor products. A retail dealer who is liable
6 for tax under this subsection may not deduct a discount from the amount of tax due when
7 reporting the tax.
8 (d) Manufacturer's Option. – A manufacturer who is not a retail dealer and who ships
9 vapor products or tobacco products other than cigarettes to either a wholesale dealer or retail
10 dealer licensed under this Part may apply to the Secretary to be relieved of paying the tax
11 imposed by this section on the tobacco products.products or vapor products. Once granted
12 permission, a manufacturer may choose not to pay the tax until otherwise notified by the
13 Secretary. To be relieved of payment of the tax imposed by this section, a manufacturer must
14 comply with the requirements set by the Secretary.
15 Permission granted under this subsection to a manufacturer to be relieved of paying the tax
16 imposed by this section applies to an integrated wholesale dealer with whom the manufacturer
17 is an affiliate. A manufacturer must notify the Secretary of any integrated wholesale dealer with
18 whom it is an affiliate when the manufacturer applies to the Secretary for permission to be
19 relieved of paying the tax and when an integrated wholesale dealer becomes an affiliate of the
20 manufacturer after the Secretary has given the manufacturer permission to be relieved of
21 paying the tax.
22 If a person is both a manufacturer of cigarettes and a wholesale dealer of vapor products or
23 tobacco products other than cigarettes and the person is granted permission under
24 G.S. 105-113.10 to be relieved of paying the cigarette excise tax, the permission applies to the
25 tax imposed by this section on vapor products or tobacco products other than cigarettes. A
26 cigarette manufacturer who becomes a wholesale dealer after receiving permission to be
27 relieved of the cigarette excise tax must notify the Secretary of the permission received under
28 G.S. 105-113.10 when applying for a license as a wholesale dealer.
29 (d1) Limitation. – Except as otherwise provided in this Article, integrated wholesale
30 dealers may not sell, borrow, loan, or exchange non-tax-paid vapor products or non-tax-paid
31 tobacco products other than cigarettes to, from, or with other integrated wholesale dealers.
32 (e) Repealed by Session Laws 2009-451, s. 27A.5(c), effective September 1, 2009."
33 SECTION 15.1.(f) G.S. 105-113.36 reads as rewritten:
34 "§ 105-113.36. Wholesale dealer and retail dealer must obtain license.
35 A wholesale dealer shall obtain for each place of business a continuing tobacco or vapor
36 products license and shall pay a tax of twenty-five dollars ($25.00) for the license. A retail
37 dealer shall obtain for each place of business a continuing tobacco or vapor products license
38 and shall pay a tax of ten dollars ($10.00) for the license. A "place of business" is a place where
39 a wholesale dealer or where a retail dealer makes tobacco or vapor products other than
40 cigarettes or a wholesale dealer or a retail dealer receives or stores non-tax-paid vapor products
41 or non-tax-paid tobacco products other than cigarettes."
42 SECTION 15.1.(g) G.S. 105-113.37 reads as rewritten:
43 "§ 105-113.37. Payment of tax.
44 (a) Monthly Report. – Except for tax on a designated sale under subsection (b), the
45 taxes levied by this Article are payable when a report is required to be filed. A report is due on
46 a monthly basis. A monthly report covers sales and other activities occurring in a calendar
47 month and is due within 20 days after the end of the month covered by the report. A report shall
48 be filed on a form provided by the Secretary and shall contain the information required by the
49 Secretary.
50 (b) Designation of Exempt Sale. – A wholesale dealer who sells a tobacco product or
51 vapor product to a person who has notified the wholesale dealer in writing that the person
1 intends to resell the item in a transaction that is exempt from tax under G.S. 105-113.35(a)(1)
2 or (2)G.S. 105-113.35(a3)(1) or (2) may, when filing a monthly report under subsection (a),
3 designate the quantity of tobacco products or vapor products sold to the person for resale. A
4 wholesale dealer shall report a designated sale on a form provided by the Secretary.
5 A wholesale dealer is not required to pay tax on a designated sale when filing a monthly
6 report. The wholesale dealer shall pay the tax due on all other sales in accordance with this
7 section. A wholesale dealer or a customer of a wholesale dealer may not delay payment of the
8 tax due on a tobacco product or vapor product by failing to pay tax on a sale that is not a
9 designated sale or by overstating the quantity of tobacco products or vapor products that will be
10 resold in a transaction exempt under G.S. 105-113.35(a)(1) or (2).G.S. 105-113.35(a3)(1) or
11 (2).
12 A person who does not sell a tobacco product or vapor product in a transaction exempt
13 under G.S. 105-113.35(a)(1) or (2) G.S. 105-113.35(a3)(1) or (2) after a wholesale dealer has
14 failed to pay the tax due on the sale of the item to the person in reliance on the person's written
15 notification of intent is liable for the tax and any penalties and interest due on the designated
16 sale. If the Secretary determines that a tobacco product or vapor product reported as a
17 designated sale is not sold as reported, the Secretary shall assess the person who notified the
18 wholesale dealer of an intention to resell the item in an exempt transaction for the tax due on
19 the sale and any applicable penalties and interest. A wholesale dealer who does not pay tax on a
20 tobacco product or vapor product in reliance on a person's written notification of intent to resell
21 the item in an exempt transaction is not liable for any tax assessed on the item.
22 (c) Repealed by Session Laws 1991 (Regular Session, 1992), c. 955, s. 12.
23 (d) Shipping Report. – Any person who transports other tobacco products or vapor
24 products upon the public highways, roads, or streets of this State must, upon notice from the
25 Secretary, file a report in a form prescribed by and containing the information required by the
26 Secretary."
27 SECTION 15.1.(h) G.S. 105-113.39(a) reads as rewritten:
28 "§ 105-113.39. Discount; refund.
29 (a) Discount. – A wholesale dealer or a retail dealer who is primarily liable under
30 G.S. 105-113.35(b) for the excise taxes imposed by this Part,Part on tobacco products, who
31 files a timely report under G.S. 105-113.37, and who sends a timely payment may deduct from
32 the amount due with the report a discount of two percent (2%). This discount covers expenses
33 incurred in preparing the records and reports required by this Part and the expense of furnishing
34 a bond."
35 SECTION 15.1.(i) G.S. 105-113.40 reads as rewritten:
36 "§ 105-113.40. Records of sales, inventories, and purchases to be kept.
37 Every wholesale dealer and retail dealer shall keep accurate records of the dealer's
38 purchases, inventories, and sales of tobacco products.products or vapor products. These records
39 shall be open at all times for inspection by the Secretary or an authorized representative of the
40 Secretary."
41 SECTION 15.1.(j) This section becomes effective February 1, 2015.
HB 1050 would also require wholesalers and retailers of mods to obtain tobacco wholesale and/or tobacco retail licenses, and to comply with provisions of those existing laws, and the bill would require compliance with all of these and other statutory requirements by February 20, 2015, which could cause some vape shops and smaller e-cig companies in NC to shut down, and would make it more difficult and costly to open new vape shops or other e-cig businesses in NC.
Some key clauses in HB 1050 (see pages 51-53)
http://www.ncleg.net/Applications/B...nt.aspx?SessionCode=2013&DocNum=7657&SeqNum=0
Note that "consumable product" includes every single 10ml, 15ml, 30ml, etc. bottle of e-liquid sold to a consumer in NC.
Under HB 1050, these definitions for existing NC tobacco product licensing and tax laws would apply all vape shops and all other retailers, wholesalers and manufacturers of "vapor products" in NC. According to these definitions, vape shops that mix their own e-liquids (i.e. consumable product) are manufacturers and retailers, and perhaps wholesale dealers as well.
And according to the definition of "vapor products", all mods (and those who manufacture, wholesale and/or retail them in NC) would also subject to the NC tobacco product licensure laws. Since mod components are often bought and sold separately, and repackaged, it is unclear how mods could/would fit under the current NC tobacco product licensing laws (e.g. would vape shops that buy, repackage and sell mod components be considered manufacturers and retailers, and perhaps wholesalers as well?).
While cigarette and tobacco product manufacturers (especially Reynolds, Lorillard and Altria) and cigarette/tobacco wholesalers and retailers in NC have been complying with (and wrote most of) these tax and licensing laws for decades, vape shop owners and many other marketers of e-liquid and mods in NC would have to comply with all of these tobacco tax and licensure laws if/when HB 1050 is enacted, which could cost them lots of money (including legal and accounting fees), and may not be attainable for some/many vape shops in NC.
This provision of HB 1050 could make it more difficult and costly to transport "vapor products" (including mods) in NC, and might (along with other tobacco transportation restrictions in G.S. 105-113.3) ban the delivery of vapor products sold by out-of-state Internet vendors to NC consumers.
While the costs of obtaining a wholesaler dealer and/or a retail dealer license appears to be very modest, all vape shops and retailers of mods and e-liquid would have to comply, and would have to comply with additional rules and regulations in G.S. 105-113.3, which I haven't seen.
Would require vape shops (and others e-cig marketers) to pay taxes on all inventory when law goes into effect, and must submit a report to the Secretary within 20 days after the law goes into effect.
Vape shops would have to submit monthly reports to the Secretary.
This would require all vape shops and all other mod and e-liquid marketers (and all other e-cig manufacturers, wholesalers and retailers) to comply with many provisions of this law by February 20, 2015.
HB 1050 didn't list any penalties for violations, but I'm sure they are punitive and clearly delineated in the existing tobacco tax and licensure law (G.S. 105-113.3)
The text of e-cig tax provision in HB 1050 is below
PART XV. TAX VAPOR PRODUCTS AND PROHIBIT USE OF VAPOR PRODUCTS
20 IN JAILS
21 SECTION 15.1.(a) G.S. 105-113.3 reads as rewritten:
22 "§ 105-113.3. Scope of tax; administration.
23 (a) Scope. – The taxes imposed by this Article shall be collected only once on the same
24 tobacco product.product or vapor product. Except as permitted by Article 2 of this Chapter, a
25 city or county may not levy a privilege license tax on the sale of tobacco products.products or
26 vapor products.
27 (b) Administration. – Article 9 of this Chapter applies to this Article."
28 SECTION 15.1.(b) G.S. 105-113.4 reads as rewritten:
29 "§ 105-113.4. Definitions.
30 The following definitions apply in this Article:
31 …
32 (1k) Consumable product. – Any nicotine liquid solution or other material
33 containing nicotine that is depleted as a vapor product is used.
34 …
35 (4a) Integrated wholesale dealer. – A wholesale dealer who is an affiliate of a
36 manufacturer of vapor products or tobacco products, other than cigarettes,
37 and is not a retail dealer.
38 (5) Licensed distributor. – A distributor licensed under Part 2 of this Article.
39 (6) Manufacturer. – A person who produces tobacco products or vapor products
40 or a person who contracts with another person to produce tobacco products
41 or vapor products and is the exclusive purchaser of the products under the
42 contract.
43 …
44 (9) Retail dealer. – A person who sells a tobacco product or vapor product to the
45 ultimate consumer of the product.
46 …
47 (11a) Tobacco product. – A cigarette, a cigar, or any other product that contains
48 tobacco and is intended for inhalation or oral use. The term does not include
49 a vapor product.
50 (12) Repealed by Session Laws 1993, c. 442, s. 1, effective January 1, 1994.
1 (13) Use. – The exercise of any right or power over cigarettes, incident to the
2 ownership or possession thereof, other than the making of a sale thereof in
3 the course of engaging in a business of selling cigarettes. The term includes
4 the keeping or retention of cigarettes for use.
5 (13a) Vapor product. – Any noncombustible product that employs a mechanical
6 heating element, battery, or electronic circuit regardless of shape or size and
7 that can be used to produce vapor from nicotine in a solution. The term
8 includes any vapor cartridge or other container of nicotine in a solution or
9 other form that is intended to be used with or in an electronic cigarette,
10 electronic cigar, electronic cigarillo, electronic pipe, or similar product or
11 device. The term does not include any product regulated by the United States
12 Food and Drug Administration under Chapter V of the federal Food, Drug,
13 and Cosmetic Act.
14 (14) Wholesale dealer. – Either of the following:
15 a. A person who acquires vapor products or tobacco products other than
16 cigarettes for sale to another wholesale dealer or to a retail dealer.
17 b. A manufacturer of vapor products or tobacco products other than
18 cigarettes."
19 SECTION 15.1.(c) G.S. 105-113.4D reads as rewritten:
20 "§ 105-113.4D. Tax with respect to inventory on effective date of tax increase.
21 Every person subject to the taxes levied in this Article who, on the effective date of a tax
22 increase under this Article, has on hand any tobacco products or vapor products must file a
23 complete inventory of the tobacco products within 20 days after the effective date of the
24 increase, and must pay an additional tax to the Secretary when filing the inventory. The amount
25 of tax due is the amount due based on the difference between the former tax rate and the
26 increased tax rate."
27 SECTION 15.1.(d) The title of Part 3 of Subchapter I of Chapter 105 of the
28 General Statutes reads as rewritten:
29 "Part 3. Tax on Other Tobacco Products.Products and Vapor Products."
30 SECTION 15.1.(e) G.S. 105-113.35 reads as rewritten:
31 "§ 105-113.35. Tax on tobacco products other than cigarettes.cigarettes and vapor
32 products.
33 (a) Tax. –Tax on Tobacco Products. – An excise tax is levied on tobacco products other
34 than cigarettes at the rate of twelve and eight-tenths percent (12.8%) of the cost price of the
35 products. This tax does not apply to the following:
36 (1) A tobacco product sold outside the State.
37 (2) A tobacco product sold to the federal government.
38 (3) A sample tobacco product distributed without charge.
39 (a1) Tax on Vapor Products. – An excise tax is levied on vapor products at the rate of
40 five cents (5¢) per fluid milliliter of consumable product. All invoices for vapor products issued
41 by manufacturers must state the amount of consumable product in milliliters.
42 (a2) Limitation. – The taxes imposed under this section do not apply to the following:
43 (1) A tobacco product or vapor product sold outside the State.
44 (2) A tobacco product or vapor product sold to the federal government.
45 (3) A sample tobacco product or vapor product distributed without charge.
46 (b) Primary Liability. – The wholesale dealer or retail dealer who first acquires or
47 otherwise handles tobacco products or vapor products subject to the tax imposed by this section
48 is liable for the tax imposed by this section. A wholesale dealer or retail dealer who brings into
49 this State a tobacco product or vapor product made outside the State is the first person to handle
50 the tobacco product or vapor product in this State. A wholesale dealer or retail dealer who is the
51 original consignee of a tobacco product or vapor product that is made outside the State and is
shipped into the State is the first person to handle the tobacco product or vapor product in this
2 State.
3 (c) Secondary Liability. – A retail dealer who acquires non-tax-paid tobacco products
4 or vapor products subject to the tax imposed by this section from a wholesale dealer is liable
5 for any tax due on the tobacco products.products or vapor products. A retail dealer who is liable
6 for tax under this subsection may not deduct a discount from the amount of tax due when
7 reporting the tax.
8 (d) Manufacturer's Option. – A manufacturer who is not a retail dealer and who ships
9 vapor products or tobacco products other than cigarettes to either a wholesale dealer or retail
10 dealer licensed under this Part may apply to the Secretary to be relieved of paying the tax
11 imposed by this section on the tobacco products.products or vapor products. Once granted
12 permission, a manufacturer may choose not to pay the tax until otherwise notified by the
13 Secretary. To be relieved of payment of the tax imposed by this section, a manufacturer must
14 comply with the requirements set by the Secretary.
15 Permission granted under this subsection to a manufacturer to be relieved of paying the tax
16 imposed by this section applies to an integrated wholesale dealer with whom the manufacturer
17 is an affiliate. A manufacturer must notify the Secretary of any integrated wholesale dealer with
18 whom it is an affiliate when the manufacturer applies to the Secretary for permission to be
19 relieved of paying the tax and when an integrated wholesale dealer becomes an affiliate of the
20 manufacturer after the Secretary has given the manufacturer permission to be relieved of
21 paying the tax.
22 If a person is both a manufacturer of cigarettes and a wholesale dealer of vapor products or
23 tobacco products other than cigarettes and the person is granted permission under
24 G.S. 105-113.10 to be relieved of paying the cigarette excise tax, the permission applies to the
25 tax imposed by this section on vapor products or tobacco products other than cigarettes. A
26 cigarette manufacturer who becomes a wholesale dealer after receiving permission to be
27 relieved of the cigarette excise tax must notify the Secretary of the permission received under
28 G.S. 105-113.10 when applying for a license as a wholesale dealer.
29 (d1) Limitation. – Except as otherwise provided in this Article, integrated wholesale
30 dealers may not sell, borrow, loan, or exchange non-tax-paid vapor products or non-tax-paid
31 tobacco products other than cigarettes to, from, or with other integrated wholesale dealers.
32 (e) Repealed by Session Laws 2009-451, s. 27A.5(c), effective September 1, 2009."
33 SECTION 15.1.(f) G.S. 105-113.36 reads as rewritten:
34 "§ 105-113.36. Wholesale dealer and retail dealer must obtain license.
35 A wholesale dealer shall obtain for each place of business a continuing tobacco or vapor
36 products license and shall pay a tax of twenty-five dollars ($25.00) for the license. A retail
37 dealer shall obtain for each place of business a continuing tobacco or vapor products license
38 and shall pay a tax of ten dollars ($10.00) for the license. A "place of business" is a place where
39 a wholesale dealer or where a retail dealer makes tobacco or vapor products other than
40 cigarettes or a wholesale dealer or a retail dealer receives or stores non-tax-paid vapor products
41 or non-tax-paid tobacco products other than cigarettes."
42 SECTION 15.1.(g) G.S. 105-113.37 reads as rewritten:
43 "§ 105-113.37. Payment of tax.
44 (a) Monthly Report. – Except for tax on a designated sale under subsection (b), the
45 taxes levied by this Article are payable when a report is required to be filed. A report is due on
46 a monthly basis. A monthly report covers sales and other activities occurring in a calendar
47 month and is due within 20 days after the end of the month covered by the report. A report shall
48 be filed on a form provided by the Secretary and shall contain the information required by the
49 Secretary.
50 (b) Designation of Exempt Sale. – A wholesale dealer who sells a tobacco product or
51 vapor product to a person who has notified the wholesale dealer in writing that the person
1 intends to resell the item in a transaction that is exempt from tax under G.S. 105-113.35(a)(1)
2 or (2)G.S. 105-113.35(a3)(1) or (2) may, when filing a monthly report under subsection (a),
3 designate the quantity of tobacco products or vapor products sold to the person for resale. A
4 wholesale dealer shall report a designated sale on a form provided by the Secretary.
5 A wholesale dealer is not required to pay tax on a designated sale when filing a monthly
6 report. The wholesale dealer shall pay the tax due on all other sales in accordance with this
7 section. A wholesale dealer or a customer of a wholesale dealer may not delay payment of the
8 tax due on a tobacco product or vapor product by failing to pay tax on a sale that is not a
9 designated sale or by overstating the quantity of tobacco products or vapor products that will be
10 resold in a transaction exempt under G.S. 105-113.35(a)(1) or (2).G.S. 105-113.35(a3)(1) or
11 (2).
12 A person who does not sell a tobacco product or vapor product in a transaction exempt
13 under G.S. 105-113.35(a)(1) or (2) G.S. 105-113.35(a3)(1) or (2) after a wholesale dealer has
14 failed to pay the tax due on the sale of the item to the person in reliance on the person's written
15 notification of intent is liable for the tax and any penalties and interest due on the designated
16 sale. If the Secretary determines that a tobacco product or vapor product reported as a
17 designated sale is not sold as reported, the Secretary shall assess the person who notified the
18 wholesale dealer of an intention to resell the item in an exempt transaction for the tax due on
19 the sale and any applicable penalties and interest. A wholesale dealer who does not pay tax on a
20 tobacco product or vapor product in reliance on a person's written notification of intent to resell
21 the item in an exempt transaction is not liable for any tax assessed on the item.
22 (c) Repealed by Session Laws 1991 (Regular Session, 1992), c. 955, s. 12.
23 (d) Shipping Report. – Any person who transports other tobacco products or vapor
24 products upon the public highways, roads, or streets of this State must, upon notice from the
25 Secretary, file a report in a form prescribed by and containing the information required by the
26 Secretary."
27 SECTION 15.1.(h) G.S. 105-113.39(a) reads as rewritten:
28 "§ 105-113.39. Discount; refund.
29 (a) Discount. – A wholesale dealer or a retail dealer who is primarily liable under
30 G.S. 105-113.35(b) for the excise taxes imposed by this Part,Part on tobacco products, who
31 files a timely report under G.S. 105-113.37, and who sends a timely payment may deduct from
32 the amount due with the report a discount of two percent (2%). This discount covers expenses
33 incurred in preparing the records and reports required by this Part and the expense of furnishing
34 a bond."
35 SECTION 15.1.(i) G.S. 105-113.40 reads as rewritten:
36 "§ 105-113.40. Records of sales, inventories, and purchases to be kept.
37 Every wholesale dealer and retail dealer shall keep accurate records of the dealer's
38 purchases, inventories, and sales of tobacco products.products or vapor products. These records
39 shall be open at all times for inspection by the Secretary or an authorized representative of the
40 Secretary."
41 SECTION 15.1.(j) This section becomes effective February 1, 2015.
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