MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Ways and Means

By: Representative Reeves

AN ACT TO AMEND SECTION 27-69-13, MISSISSIPPI CODE OF 1972, TO INCREASE THE EXCISE TAX ON CIGARETTES AND OTHER TOBACCO PRODUCTS; TO AMEND SECTION 27-69-75, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE REVENUE DERIVED FROM THE EXCISE TAX INCREASE ON CIGARETTES AND OTHER TOBACCO PRODUCTS SHALL BE DEPOSITED INTO THE MEDICAID RECIPIENTS' TOBACCO ILLNESS FUND IN THE STATE TREASURY; TO CREATE THE MEDICAID RECIPIENTS' TOBACCO ILLNESS FUND IN THE STATE TREASURY AND PROVIDE THAT THE MONIES IN THE FUND SHALL BE EXPENDED BY THE DIVISION OF MEDICAID FOR MEDICAL ASSISTANCE FOR RECIPIENTS OF MEDICAID WHO HAVE AN ILLNESS OR AILMENT THAT IS RELATED TO THE RECIPIENTS' USE OF TOBACCO OR TOBACCO PRODUCTS; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 27-69-13, Mississippi Code of 1972, is amended as follows:

27-69-13. There is * * * imposed, levied and assessed, to be collected and paid as hereinafter provided in this chapter, an excise tax on each person or dealer in cigarettes, cigars, stogies, snuff, chewing tobacco, and smoking tobacco, or substitutes therefor, upon the sale, use, consumption, handling or distribution in the State of Mississippi, as follows:

(a) On cigarettes, the rate of tax shall be Eighteen-twentieths of One Cent (18/20 of 14) on each cigarette sold with a maximum length of one hundred twenty (120) millimeters; any cigarette in excess of this length shall be taxed as if it were two (2) or more cigarettes.  * * * However, if the federal tax rate on cigarettes in effect on July 1, 1985, is reduced, then the rate as provided herein shall be increased by the amount of the federal tax reduction. Such tax increase shall take effect on the first day of the month following the effective date of such reduction in the federal tax rate.

(b) (i) In addition to the excise tax levied by paragraph (a), there shall be levied an additional excise tax of Seventy-five Cents (754) on each pack of cigarettes sold.

(ii) On or before the fifteenth of August 1998, and each succeeding month thereafter, the revenue derived from the additional excise tax upon cigarettes levied in subparagraph (i) of this paragraph shall be deposited into the Medicaid Recipients' Tobacco Illness Fund created in Section 3 of this act.

(c) On cigars, cheroots, stogies, snuff, chewing and smoking tobacco and all other tobacco products except cigarettes, the rate of tax shall be fifteen percent (15%) of the manufacturer's list price.

(d) (i) In addition to the excise tax levied by paragraph (c), there shall be levied an additional excise tax of Seventy-five Cents (754) on each box, pack or container of cigars, cheroots, stogies, snuff, chewing and smoking tobacco and all other tobacco products, except cigarettes.

(ii) On or before the fifteenth day of August 1998, and each succeeding month thereafter, the revenue derived from the additional excise tax upon cigars, cheroots, stogies, snuff, chewing and smoking tobacco and all other tobacco products, except cigarettes, levied in subparagraph (i) of this paragraph shall be deposited into the Medicaid Recipients' Tobacco Illness Fund created in Section 3 of this act.

No stamp evidencing the tax herein levied on cigarettes shall be of a denomination of less than One Cent (14), and whenever the tax computed at the rates herein prescribed on cigarettes shall be a specified amount, plus a fractional part of One Cent (14), the package shall be stamped for the next full cent; however, the additional face value of stamps purchased to comply with taxes imposed by this section after June 1, 1985, shall be subject to a four percent (4%) discount or compensation to dealers for their services rather than the eight percent (8%) discount or compensation allowed by Section 27-69-31.

Every wholesaler shall purchase stamps as provided in this chapter, and affix the same to all packages of cigarettes handled by him as herein provided.

The above tax is levied upon the sale, use, gift, possession, or consumption of tobacco within the State of Mississippi, and the impact of the tax levied by this chapter is * * * declared to be on the vendee, user, consumer, or possessor of tobacco in this state; and when the tax is paid by any other person, such payment shall be considered as an advance payment and shall thereafter be added to the price of the tobacco and recovered from the ultimate consumer or user.

SECTION 2. Section 27-69-75, Mississippi Code of 1972, is amended as follows:

27-69-75. All taxes levied by this chapter shall be payable to the commissioner in cash, or by personal check, cashier's check, bank exchange, post-office money order or express money order, and shall be deposited by the commissioner in the State Treasury on the same day collected. No remittance other than cash shall be a final discharge of liability for the tax herein assessed and levied, unless and until it has been paid in cash to the commissioner.

The revenue derived from the taxes levied in Sections 27-69-13(b) and 27-69-13(d) shall be deposited into the Medicaid Recipients' Tobacco Illness Fund created in Section 3 of this act.

The remainder of the tax on cigarettes and all other tobacco taxes collected, including tobacco license taxes, shall be deposited into the State Treasury to the credit of the General Fund.

Wholesalers who are entitled to purchase stamps at a discount, as provided by Section 27-69-31, may have consigned to them, without advance payment, such stamps, if and when such wholesaler shall give to the commissioner a good and sufficient bond executed by some surety company authorized to do business in this state, conditioned to secure the payment for the stamps so consigned. The commissioner shall require payment for such stamps not later than thirty (30) days from the date the stamps were consigned.

SECTION 3. There is created in the State Treasury a special fund to be known as the Medicaid Recipients' Tobacco Illness Fund, which shall be comprised of funds deposited as provided in Sections 27-69-13 and 27-69-75 and any other funds appropriated, contributed or otherwise made available to the fund. The monies in the fund shall be expended by the Division of Medicaid for medical assistance for recipients of Medicaid who have an illness or ailment that is related to the recipients' use of tobacco or tobacco products, and may be expended only upon appropriation by the Legislature. Unexpended monies remaining in the fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned on monies in the fund shall be deposited to the credit of the fund.

SECTION 4. This act shall take effect and be in force from and after July 1, 1998.