THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY HUGHES, TARTAGLIONE, COSTA, STACK, FONTANA, MUSTO, O'PAKE, WILLIAMS, WASHINGTON, FARNESE, KITCHEN, LOGAN AND MELLOW, APRIL 20, 2010

REFERRED TO FINANCE, APRIL 20, 2010  

AN ACT

Providing for a tobacco product tax; and establishing the

Tobacco Product Tax Account.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Cigarette and

Other Tobacco Products Tax Act.

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Cigarette."  Any roll for smoking made wholly or in part of

tobacco, the wrapper or cover of which is made of any substance

or material other than tobacco regardless of the size or shape

of the roll and regardless of whether or not the tobacco is

flavored, adulterated or mixed with any other ingredient. The

term cigarette shall not include cigars, little cigars or

cigarillos.

"Smokeless tobacco."  A product containing finely cut,

ground, powdered, blended or leaf tobacco made primarily for

individual consumption which is intended to be placed in the

oral or nasal cavity and not intended to be smoked. The term

includes chewing tobacco, dipping tobacco and snuff.

"Tobacco product."  A product containing tobacco for

consumption. The term includes a cigar, a little cigar, a

cigarillo, pipe tobacco, smokeless tobacco, roll-your-own,

smoking tobacco, bidis or beedies and kretek. The term does not

include a cigarette.

"Tobacco product distributor or wholesaler."  A person

engaged in the business of selling tobacco products that sells,

exchanges or distributes tobacco products to retailers,

consumers or other wholesalers or distributors in this

Commonwealth. The term includes a tobacco products manufacturer

that has within this Commonwealth any office, sales house or

other place of business.

"Wholesale price."  The price for which a tobacco

manufacturer sells a tobacco product to a tobacco product

distributor or wholesaler, exclusive of any discount, rebate or

other reduction.

Section 3.  Incidence and rate of tax on tobacco products.

(a)  General rule.--Except as set forth in subsection (d), a

tax is imposed on a tobacco product sold or held for sale in

this Commonwealth by a tobacco products distributor or

wholesaler to a retailer or consumer. The tax is imposed on the

tobacco product wholesale price, regardless of the actual price

at which the tobacco product is sold and regardless of whether

the tobacco product is sold.

(b)  Purchase of stamp.--A tobacco products distributor or

wholesaler that brings tobacco products or causes tobacco

products to be brought into this Commonwealth is liable for the

tax imposed by this section. The tax imposed is to be paid by

the purchase of stamps as provided in this act. The stamp shall

be affixed to or impressed upon each package of tobacco product.

(c)  Tax.--The tax imposed by this section shall be at the

rate of 59.2% of the wholesale price of the tobacco product.

(d)  Applicability.--The tax under this section does not

apply to a tobacco product which the Commonwealth is prohibited

from taxing under the laws of the United States. It shall be

presumed that all tobacco products within this Commonwealth are

subject to tax. The burden of proof of exemption under this

subsection is on the taxpayer or remitter claiming exemption.

Section 4.  Tobacco Product Tax Account.

(a)  Creation.--A restricted receipts account known as the

Tobacco Product Tax Account is created in the State Treasury. 

(b)  Funding.--Funds obtained from the imposition of the tax

under section 3 shall be deposited into the Tobacco Product Tax

Account to be used to subsidize adult and youth employment

programs.

(c)  Lapse.--Any funds not used for the purpose under

subsection (b) by June 30, 2011, shall lapse into the General

Fund.

Section 20.  Effective date.

This act shall take effect immediately.