MISSISSIPPI LEGISLATURE

2004 Regular Session

To: Finance

By: Senator(s) Gordon

Senate Bill 2861

AN ACT TO IMPOSE AN ASSESSMENT IN THE AMOUNT OF FORTY CENTS ON EACH PACKAGE OF CIGARETTES TO WHICH A STAMP IS AFFIXED PURSUANT TO THE TOBACCO TAX LAW; TO PROVIDE FOR ANNUAL 3% INCREASES IN THE ASSESSMENT; TO PROVIDE THAT IF THE MANUFACTURER OF THE CIGARETTES IS NOT A PARTICIPANT IN THE TOBACCO SETTLEMENT, THE STATE TAX COMMISSION SHALL COLLECT THE ASSESSMENT FROM THE PERSON WHO AFFIXES THE STAMP REQUIRED BY THE TOBACCO TAX LAW; TO PROVIDE THAT IF THE MANUFACTURER OF THE CIGARETTES IS A PARTICIPANT IN THE TOBACCO SETTLEMENT, THE STATE TAX COMMISSION SHALL COLLECT THE ASSESSMENT DIRECTLY FROM THE CIGARETTE MANUFACTURER; A CIGARETTE MANUFACTURER THAT IS PARTICIPATING IN THE TOBACCO SETTLEMENT SHALL BE ENTITLED TO A CREDIT AGAINST THE AMOUNT OF THE ASSESSMENT OWED UNDER THIS SECTION IN AN AMOUNT EQUAL TO THE PAYMENTS IT HAS MADE UNDER THE SETTLEMENT AGREEMENT DURING THE TWELVE MONTHS IMMEDIATELY PRIOR TO THE DUE DATE OF THE ASSESSMENT; TO PROVIDE THAT NO PERSON SHALL AFFIX THE STAMP REQUIRED BY THE TOBACCO TAX LAW ON ANY PACKAGE OF CIGARETTES AFTER RECEIVING NOTICE FROM THE STATE TAX COMMISSION THAT THE MANUFACTURER HAS NOT PAID IN FULL THE ASSESSMENT IMPOSED BY THIS SECTION; TO PROVIDE THAT ASSESSMENTS COLLECTED UNDER THE PROVISIONS OF THIS SECTION SHALL BE DEPOSITED INTO THE HEALTH CARE TRUST FUND; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) As used in this section:

(a) "Cigarette manufacturer" means a manufacturer of cigarettes sold in this state.

(b) "Settling manufacturer" means a cigarette manufacturer that is a participating manufacture in the tobacco settlement.

(c) "Nonsettling manufacturer" means any cigarette manufacturer that is not a settling manufacturer.

(d) "Tobacco settlement" shall have the meaning ascribed to such term in Section 43-13-403.

(2) The purposes of the assessment imposed by this section are:

(a) To ensure that the payments and purposes of the tobacco settlement are preserved in the event that any settling manufacturer ceases making the payments provided for under the tobacco settlement; and

(b) To prevent nonsettling manufacturers from undermining the state's policy of discouraging cigarette smoking by minors by selling cigarettes at prices substantially below the prices charged by settling manufacturers and these low prices should bear at least a portion of the costs incurred by the state as a result of smoking related diseases.

(3) (a) An assessment in the amount of twenty (20) mills per cigarette or Forty Cents (40) per package of twenty (20) cigarettes is imposed on each package of cigarettes to which a stamp is affixed pursuant to the Tobacco Tax Law. This assessment is in addition to all other fees and taxes imposed or levied under existing law and shall increase by three percent (3%) January 1 of each calendar year.

(b) If the manufacturer of the cigarettes is a nonsettling manufacturer, the State Tax Commission shall collect the assessment from the person who affixes the stamp required by the Tobacco Tax Law.

(c) If the manufacturer of the cigarettes is a settling manufacturer, the State Tax Commission shall collect the assessment on packages of cigarettes on which stamps were affixed during the prior month on the fifteenth day of each month directly from the cigarette manufacturer based on information provided by the report required by subsection (4) of this section.

(d) Payment of the assessment, subject to any credit authorize by this section, shall be made concurrently with the filing of the statement required by Section 27-69-35 for all cigarettes on which stamps were affixed in the prior month.

(e) At the time it pays the assessment for the cigarettes, or claims the credit provided for in subsection (5) of this section, the settling manufacturer shall file a report setting forth the total number of cigarettes reported to it and certify that the reported amount conforms to the number it has from its own records and other information available to it.

(4) Each person required to affix a stamp to packages of cigarettes pursuant to the Tobacco Tax Law, shall file a report with the State Tax Commission by not later than the fifteenth day of the month and state in the report the number of packages of cigarettes on which stamps were affixed in the prior month by cigarette manufacturer, brand and brand style. The person shall also report to each settling manufacturer by the fifth business day of the month the number of the settling manufacturer's packages of cigarettes on which stamps were affixed in the prior month by brand and brand style.

(5) A settling manufacturer shall be entitled to a credit against the amount of the assessment owed under this section in an amount equal to the payments it has made under the settlement agreement during the twelve (12) months immediately prior to the due date of the assessment. The amount of the settlement payments available for credit shall be decreased by the amount of any prior credits taken. In no event shall any settlement payment not used as a credit within twelve (12) months of the payment date be carried forward and used in any subsequent month.

(6) No person shall affix the stamp required by the Tobacco Tax Law on any package of cigarettes after receiving notice from the State Tax Commission that the manufacturer has not paid in full the assessment imposed by this section.

(7) Assessments collected under the provisions of this section shall be deposited into the Health Care Trust Fund created pursuant to Section 43-13-405.

(8) All administrative provisions of the Tobacco Tax Law, including those which fix damages, penalties and interest for nonpayment of taxes and for noncompliance with the provisions of such chapter, and all other duties and requirements imposed upon taxpayers shall apply to all persons liable for assessments under the provisions of this section and the Chairman of the State Tax Commission shall perform all duties with respect to persons responsible for paying the assessment under this section as are provided in the Tobacco Tax Law, except where there is a conflict, then the provisions of this section shall control.

SECTION 2. This act shall take effect and be in force from and after July 1, 2004.