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H.B. 238
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CIGARETTE AND TOBACCO TAX
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AMENDMENTS
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2002 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Carl R. Saunders
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This act modifies the Cigarette and Tobacco Tax and Licensing Act. This act increases the
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rates of tax levied on cigarettes and other tobacco products and specifies how a portion of
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any increase in cigarette tax revenues will be used.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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59-14-204, as last amended by Chapter 190, Laws of Utah 2000
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59-14-302, as renumbered and amended by Chapter 2, Laws of Utah 1987
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
59-14-204
is amended to read:
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59-14-204. Tax basis -- Rate -- Future increase -- Restricted account -- Use of
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revenues.
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(1) Except for cigarettes described under Section
59-14-210
, there is levied a tax upon the
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sale, use, or storage of cigarettes in the state.
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(2) The rates of the tax levied under Subsection (1) are:
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(a) [2.575] 4.075 cents on each cigarette, for all cigarettes weighing not more than three
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pounds per thousand cigarettes; and
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(b) [3.175] 4.675 cents on each cigarette, for all cigarettes weighing in excess of three
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pounds per thousand cigarettes.
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(3) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
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distributor, wholesaler, retailer, user, or consumer.
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(4) The tax rates specified in this section shall be increased by the commission by the same
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amount as any future reduction in the federal excise tax on cigarettes.
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(5) (a) There is created within the General Fund a restricted account known as the
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"Cigarette Tax Restricted Account."
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(b) Beginning on July 1, 1998, $250,000 of the revenues generated by the increase in the
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cigarette tax under this section enacted during the 1997 Annual General Session shall be annually
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deposited into the account.
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(c) The Department of Health shall expend the funds in the account for a tobacco
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prevention and control media campaign targeted towards children.
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(d) The following amounts of tax levied under Subsection (1) shall be deposited in the
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Cigarette Tax Restricted Account:
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(i) an amount equal to a tax of 0.5 cents on each cigarette taxed under Subsection (1), to
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be annually appropriated to the Department of Health for tobacco prevention, reduction, cessation,
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and control programs;
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(ii) an amount equal to a tax of 0.25 cents on each cigarette taxed under Subsection (1),
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to be annually appropriated to the University of Utah Health Sciences Center for the Huntsman
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Cancer Institute for cancer research; and
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(iii) an amount equal to a tax of 0.25 cents on each cigarette taxed under Subsection (1),
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to be annually appropriated to the Medical Education Council for medical education at the
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University of Utah School of Medicine.
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(e) Any balance remaining in the Cigarette Tax Restricted Account at the end of the fiscal
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year shall be appropriated during the next fiscal year for the purposes set forth in Subsections
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(5)(d)(i) through (5)(d)(iii) in proportion to the amount of revenue deposited into the account for
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each purpose.
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(f) The Legislature shall give particular consideration to appropriating any revenues
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resulting from the change in tax rates under Subsection (2) adopted during the 2002 Annual
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General Session and not otherwise appropriated pursuant to Subsection (5)(d) to enhance Medicaid
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provider reimbursement rates and medical coverage for the uninsured.
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Section 2.
Section
59-14-302
is amended to read:
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59-14-302. Tax basis -- Rate.
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(1) There is levied a tax upon the sale, use, or storage of tobacco products in the state. The
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rate of the tax is [35%] 55% of the manufacturer's sales price. The sales price is the amount
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charged by the manufacturer less all discounts, and includes original Utah destination freight
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charges, whether the product is shipped f.o.b. origin or f.o.b. destination and regardless of who
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pays the freight charge.
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(2) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
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distributor, wholesaler, retailer, user, or consumer.
Legislative Review Note
as of 1-8-02 9:04 AM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.