ARIZONA STATE SENATE
Phoenix, Arizona
luxury tax; revenue stamps;
cigarettes
Purpose
Allows third party
enforcement in the improper use of tax
stamps on “gray market cigarette” packages.
Adds filing requirements for cigarette distributors who affix tax
stamps.
Background
Laws 1999, Chapter 290,
prohibits tax stamping of “gray market cigarettes” i.e., cigarettes that do not
conform to other labeling requirements of the federal government because they
are not intended for sale in the United States. This bill strengthens the enforcement ability of the Department
of Revenue (DOR) and third parties to keep improperly stamped cigarettes out of
Arizona. Improperly stamped cigarettes,
or “gray market cigarettes,” do not carry the one-dollar embedded tobacco
settlement assessment, which properly stamped tobacco products do. This language is based on a national
legislative model, and 40 states have passed similar legislation.
According to DOR, there is
no significant cost attached to the filing requirements.
Provisions
1. Prohibits tax stamps to be affixed upon a package of cigarettes that also violates the United States Code dealing with proper documentation and notification regarding tobacco products.
2. Allows an individual to bring injunctive action against a distributor that improperly affixes a tax stamp to cigarettes not intended for sale in the U.S., provided that the individual bringing an action meets the following criteria:
· Sells, distributes or manufacturers cigarettes; and
· Experiences direct economic or commercial injury as a result of the violation
3. Excludes duty free cigarettes and cigarettes brought into and resold within the customs territory, and cigarettes brought into the U.S. for personal use from provisions requiring the lawful use of tax stamps.
4. Requires cigarette distributors who affix tax stamps to file a form containing specific information on or before the 20th day of each month with DOR for all cigarettes imported during the prior month upon which a tax stamp has been affixed.
5. Specifies that the improper use of tax stamps also constitutes a violation of Arizona consumer fraud statutes.
6. Specifies that cigarette distributors must file the same reports with the Department of Revenue as they do with the U.S. Department of Customs for all imported cigarettes upon which a tax stamp has been affixed.
7. Makes technical and conforming changes.
8. Provides for a general effective date.
Amendments
Adopted by the House of Representatives
1. Prohibits tax stamps to be affixed upon a package of cigarettes that also violates the United States Code dealing with proper documentation and notification regarding tobacco products.
2. Allows an individual to bring injunctive action against a distributor that improperly affixes a tax stamp to cigarettes not intended for sale in the U.S., provided that the individual bringing action meets the following criteria:
· Sells, distributes or manufacturers cigarettes; and
· Experiences direct economic or commercial injury as a result of the violation.
3. Excludes cigarettes brought into the U.S. for personal use from provisions requiring the lawful use of tax stamps.
4. Specifies that the improper use of tax stamps also constitutes a violation of Arizona consumer fraud statutes.
5. Specifies that cigarette distributors must file the same reports with the Department of Revenue as they do with the U.S. Department of Customs for all imported cigarettes upon which a tax stamp has been affixed.
House Action Senate Action
WM 3/13/01 DP 7-0-3-0 FIN 1/22/01 DP 8-0-0-0
3rd Read 4/17/01 41-12-7-0 3rd Read 1/29/01 29-0-1-0
Signed by the Governor 4/26/01
Chapter 254
Prepared by Senate Staff
May 14, 2001