House Bill 435

AN ACT TO AMEND SECTION 27-69-13, MISSISSIPPI CODE OF 1972, TO INCREASE THE EXCISE TAX ON CIGARETTES; TO AMEND SECTION 27-69-75, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE REVENUE DERIVED FROM THE TAX INCREASE PROVIDED FOR BY THIS ACT SHALL BE DEPOSITED INTO THE SPECIAL FUND IN THE STATE TREASURY TO THE CREDIT OF THE GOVERNOR'S OFFICE-DIVISION OF MEDICAID; 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. (1) There is hereby 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 1¢) 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 June 1, 1985, is reduced, then the rate as provided in this paragraph (a) 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 is levied an excise tax of Five Cents (5¢) 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.

(ii) On or before August 15, 2006, and each succeeding month thereafter, the revenue derived from the excise tax on cigarettes that is levied by subparagraph (i) of this paragraph shall be deposited into the special fund in the State Treasury to the credit of the Governor's Office-Division of Medicaid as provided in Section 27-69-75.

(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.

(2) No stamp evidencing the tax * * * levied on cigarettes by this section shall be of a denomination of less than One Cent (1¢), and whenever the tax computed at the rates * * * prescribed on cigarettes in this section is a specified amount, plus a fractional part of One Cent (1¢), 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.

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

(4) The * * * tax levied by this chapter 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 hereby declared to be on the vendee, user, consumer or possessor of tobacco in this state. 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. (1) 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 * * * assessed and levied under this chapter, unless and until it has been paid in cash to the commissioner.

(2) The revenue derived from the tax levied in Section 27-69-13(1)(b) shall be deposited into the special fund in the State Treasury to the credit of the Governor's Office-Division of Medicaid to be expended by the division for the purposes authorized under the Mississippi Medicaid Law.

(3) All tobacco taxes collected, including tobacco license taxes, except for those revenues required to be deposited into the special fund as provided in subsection (2) of this section, shall be deposited into the State Treasury to the credit of the General Fund.

(4) 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, those stamps, if and when the wholesaler * * * gives 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 those stamps not later than thirty (30) days from the date the stamps were consigned.

SECTION 3. This act shall take effect and be in force from and after July 1, 2006.