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PRINTER'S NO. 3860
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2342
Session of
2015
INTRODUCED BY WHEELAND, JAMES, SAINATO, GIBBONS, SAYLOR,
PHILLIPS-HILL, RAPP, DAVIS, WARD, KAUFER, HELM, WATSON,
GROVE, D. PARKER, SANKEY, CAUSER, MASSER, McGINNIS,
ZIMMERMAN, PICKETT, HARHAI, GABLER, QUIGLEY, OBERLANDER,
HANNA, MULLERY, WARNER, MURT, DIAMOND, DUSH, COX, FLYNN,
BLOOM, MAHER, METCALFE, SIMMONS, DEAN, GALLOWAY, DRISCOLL,
GILLESPIE, HAHN, BARRAR, TOEPEL, BENNINGHOFF, MUSTIO, RADER
AND MARSHALL, SEPTEMBER 19, 2016
REFERRED TO COMMITTEE ON FINANCE, SEPTEMBER 19, 2016
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," in tobacco products tax, providing for taxation
of vapor products.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "electronic cigarettes" and
"tobacco products" in section 1201-A of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, added July
13, 2016 (P.L.526, No.84), are amended and the section is
amended by adding definitions to read:
Section 1201-A. Definitions.
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The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Consumable product." A nicotine liquid solution or other
material containing nicotine that is depleted as a vapor product
is used.
* * *
["Electronic cigarettes." As follows:
(1) An electronic oral device, such as one composed of a
heating element and battery or electronic circuit, or both,
which provides a vapor of nicotine or any other substance and
the use or inhalation of which simulates smoking.
(2) The term includes:
(i) A device as described in paragraph (1),
notwithstanding whether the device is manufactured,
distributed, marketed or sold as an e-cigarette, e-cigar
and e-pipe or under any other product, name or
description.
(ii) A liquid or substance placed in or sold for use
in an electronic cigarette.]
* * *
"Tobacco products." As follows:
(1) [Electronic cigarettes] Vapor products.
(2) Roll-your-own tobacco.
(3) Periques, granulated, plug cut, crimp cut, ready
rubbed and other smoking tobacco, snuff, dry snuff, snuff
flour, cavendish, plug and twist tobacco, fine-cut and other
chewing tobaccos, shorts, refuse scraps, clippings, cuttings
and sweepings of tobacco and other kinds and forms of
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tobacco, prepared in such manner as to be suitable for
chewing or ingesting or for smoking in a pipe or otherwise,
or any combination of chewing, ingesting or smoking.
(4) The term does not include:
(i) Any item subject to the tax under section 1206.
(ii) Cigars.
* * *
"Vapor product." A nonlighted, noncombustible product that
employs a mechanical heating element, battery or electronic
circuit notwithstanding shape or size and that can be used to
produce vapor from nicotine in a solution. The term includes a
vapor cartridge or other container of nicotine in a solution or
other form that is intended to be used with or in an electronic
cigarette, electronic cigar, electronic cigarillo, electronic
pipe or similar product or device. The term does not include a
product regulated by the United States Food and Drug
Administration under Chapter 9, Subchapter V of the Federal
Food, Drug, and Cosmetic Act (52 Stat. 1040, 21 U.S.C. § 351 et
seq.).
* * *
Section 2. Sections 1202-A(a) and (a.1) and 1203-A(a)(1) of
the act, added July 13, 2016 (P.L.526, No.84), are amended to
read:
Section 1202-A. Incidence and rate of tax.
(a) Imposition of tax on certain tobacco products.--A
tobacco products tax is imposed on the dealer or manufacturer at
the time the tobacco product is first sold to a retailer in this
Commonwealth at the rate of 55¢ per ounce for the purchase of
any tobacco product other than [electronic cigarettes] vapor
products. The tax rate shall include a proportionate tax at the
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rate of 55¢ per ounce on all fractional parts of an ounce. The
tax imposed on tobacco products other than [electronic
cigarettes] vapor products that weigh less than 1.2 ounces per
container is equal to the amount of the tax imposed on tobacco
products other than electronic cigarettes that weigh 1.2 ounces.
The tax shall be collected from the retailer by whomever sells
the tobacco product to the retailer and remitted to the
department. Any person required to collect this tax shall
separately state the amount of tax on an invoice or other sales
document.
(a.1) Imposition of tax on [electronic cigarettes] vapor
products.--A tobacco products tax is imposed on [the dealer or
manufacturer at the time the electronic cigarette is first sold
to a retailer in this Commonwealth at the rate of 40% on the
purchase price charged to the retailer for the purchase of
electronic cigarettes] vapor products at the point of retail
sale in this Commonwealth at the rate of 5 ¢ per fluid milliliter
of consumable product. The tax shall be collected [for] by the
retailer [by whomever sells the electronic cigarette to the
retailer] and remitted to the department. Any person required to
collect this tax shall separately state the amount of tax on an
invoice or other sales document.
* * *
Section 1203-A. Floor tax.
(a) Payment.--
(1) Any retailer that, as of the effective date of this
paragraph, possesses tobacco products subject to the tax
imposed by section 1202-A other than roll-your-own tobacco
and vapor products shall pay the tax in accordance with the
rates specified in section 1202-A. The tax shall be paid and
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reported on a form prescribed by the department within 90
days of the effective date of this paragraph.
* * *
Section 3. If this act takes effect after October 1, 2016,
the following provisions of the act shall apply retroactively to
October 1, 2016:
(1) The amendment or addition of the definitions of
"consumable product," "electronic cigarettes," "tobacco
products" and "vapor product" in section 1201-A.
(2) The amendment of section 1202-A(a) and (a.1) and
1203-A(a)(1).
Section 4. This act shall take effect October 1, 2016, or
immediately, whichever is later.
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