(REPRINTED WITH ADOPTED AMENDMENTS)

 

Senate Bill No. 381–Senator Jacobsen

 

March 19, 2001

____________

 

Referred to Committee on Taxation

 

SUMMARY—Makes various changes to provisions governing tax on products made from tobacco, other than cigarettes. (BDR 32‑818)

 

FISCAL NOTE:            Effect on Local Government: No.

                                    Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to taxation; revising the definitions of “wholesale dealer” and “wholesale price” for the purpose of imposing the tax on products made from tobacco, other than cigarettes; requiring the payment of the tax after the sale of the products by a wholesale dealer; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1    Section 1. NRS 370.440 is hereby amended to read as follows:

1-2    370.440  As used in NRS 370.440 to 370.503, inclusive, unless the

1-3  context otherwise [provides:] requires:

1-4    1.  “Retail dealer” means any person who is engaged in selling products

1-5  made from tobacco, other than cigarettes, to customers.

1-6    2.  “Sale” means any transfer, exchange, barter, gift, offer for sale, or

1-7  distribution for consideration of products made from tobacco, other than

1-8  cigarettes.

1-9    3.  “Ultimate consumer” means a person who purchases a product

1-10  made from tobacco, other than cigarettes, for his household or personal

1-11  use and not for resale.

1-12    4.  “Wholesale dealer” means any person who [purchases products

1-13  made from tobacco, other than cigarettes, directly from the manufacturer or

1-14  who purchases those products from any other person who purchases them

1-15  from the manufacturer to sell to retail dealers and who serves retail outlets

1-16  from an established place of business including, but not limited to, the

1-17  maintenance of a warehouse for the storage and distribution of those

1-18  products.

1-19    4.] :

1-20    (a) Brings or causes to be brought into this state products made from

1-21  tobacco, other than cigarettes, purchased from the manufacturer or a

2-1  wholesale dealer and who stores, sells or otherwise disposes of those

2-2  products within this state;

2-3    (b) Manufactures or produces products made from tobacco, other

2-4  than cigarettes, within this state and who sells or distributes those

2-5  products within this state to other wholesale dealers, retail dealers or

2-6  ultimate consumers; or

2-7    (c) Purchases products made from tobacco, other than cigarettes,

2-8  solely for the purpose of bona fide resale to retail dealers or to other

2-9  persons for the purpose of resale only.

2-10    5. “Wholesale price” means :

2-11    (a) Except as otherwise provided in paragraph (b), the established

2-12  price for which a manufacturer sells a product made from tobacco, other

2-13  than cigarettes, to a wholesale dealer before any discount or other reduction

2-14  is made.

2-15    (b) For a product made from tobacco, other than cigarettes, sold to a

2-16  retail dealer or an ultimate consumer by a wholesale dealer described in

2-17  paragraph (b) of subsection 3, the established price for which the product

2-18  is sold to the retail dealer or ultimate consumer before any discount or

2-19  other reduction is made.

2-20    Sec. 2.  NRS 370.450 is hereby amended to read as follows:

2-21    370.450  1.  Except as otherwise provided in subsection 2, there is

2-22  hereby imposed upon the purchase or possession of products made from

2-23  tobacco, other than cigarettes, by a customer in this state a tax of 30

2-24  percent of the wholesale price of those products.

2-25    2.  The provisions of subsection 1 do not apply to those products which

2-26  are:

2-27    (a) Shipped out of the state for sale and use outside the state; or

2-28    (b) Displayed or exhibited at a trade show, convention or other

2-29  exhibition in this state by a manufacturer or wholesale dealer who is not

2-30  licensed in this state.

2-31    3.  This tax must be collected and paid by the wholesale dealer to the

2-32  department [before] , in accordance with the provisions of NRS 370.465,

2-33  after the sale or distribution of those products [to the customer.] by the

2-34  wholesale dealer. The wholesale dealer is entitled to retain 2 percent of the

2-35  taxes collected to cover the costs of collecting and administering the taxes.

2-36    4.  Any wholesale dealer who sells or distributes any of those products

2-37  without [first] paying the tax provided for by this section is guilty of a

2-38  misdemeanor.

2-39    Sec. 3.  NRS 370.460 is hereby amended to read as follows:

2-40    370.460  It is unlawful for any person to sell or offer to sell any

2-41  products made from tobacco, other than cigarettes, on which the tax [has

2-42  not been] is not paid as provided for in NRS 370.450.

2-43    Sec. 4.  NRS 370.465 is hereby amended to read as follows:

2-44    370.465  1.  A wholesale dealer [or retail dealer] shall, not later than

2-45  20 days after the end of each month, submit to the department [:

2-46    (a) A list] a report on a form prescribed by the department setting forth

2-47  each [purchase] sale of products made from tobacco, other than cigarettes,

2-48  that [he] the wholesale dealer made during the previous month . [; and

3-1    (b) A copy of the invoice for each such purchase that is required to be

3-2  provided to him pursuant to NRS 370.470.

3-3    2.  The department shall maintain a record of the invoices for not less

3-4  than 3 years after the receipt of those invoices.]

3-5    2.  Each report submitted pursuant to this section on or after

3-6  August 20, 2001, must be accompanied by the tax owed pursuant to NRS

3-7  370.450 for products made from tobacco, other than cigarettes, that were

3-8  sold by the wholesale dealer during the previous month.

3-9    3. The department may impose a penalty on a wholesale dealer [or retail

3-10  dealer] who violates any of the provisions of [subsection 1] this section as

3-11  follows:

3-12    (a) For the first violation within 7 years, a fine of $1,000.

3-13    (b) For a second violation within 7 years, a fine of $5,000.

3-14    (c) For a third or subsequent violation within 7 years, revocation of the

3-15  license of the wholesale dealer . [or retail dealer.]

3-16    Sec. 5.  NRS 370.470 is hereby amended to read as follows:

3-17    370.470  [1.] A wholesale dealer must obtain from each manufacturer

3-18  or wholesale dealer who is not licensed in this state itemized invoices of all

3-19  products made from tobacco, other than cigarettes, purchased from and

3-20  delivered by the manufacturer or wholesale dealer who is not licensed in

3-21  this state. The wholesale dealer must obtain from the manufacturer or

3-22  wholesale dealer who is not licensed in this state separate invoices for each

3-23  purchase made. The invoice must include:

3-24    [(a)] 1. The name and address of the manufacturer or wholesale dealer

3-25  who is not licensed in this state;

3-26    [(b)] 2. The name and address of the wholesale dealer;

3-27    [(c)] 3. The date of the purchase; and

3-28    [(d)] 4. The quantity and wholesale price of those products.

3-29    [2.  A retail dealer must obtain from each manufacturer or wholesale

3-30  dealer who is not licensed in this state itemized invoices of all products

3-31  made from tobacco, other than cigarettes, purchased from and delivered by

3-32  that manufacturer or wholesale dealer. The retail dealer must obtain from

3-33  the manufacturer or wholesale dealer who is not licensed in this state

3-34  separate invoices for each purchase made. The invoice must include:

3-35    (a) The name and address of the manufacturer or wholesale dealer who

3-36  is not licensed in this state;

3-37    (b) The name and address of the retail dealer;

3-38    (c) The date of the purchase; and

3-39    (d) The quantity and wholesale price of those products.]

3-40    Sec. 6.  NRS 370.480 is hereby amended to read as follows:

3-41    370.480  1.  Every wholesale dealer must keep at his place of business

3-42  complete and accurate records for that place of business, including copies

3-43  of all invoices of products made from tobacco, other than cigarettes, which

3-44  he holds, purchases and delivers , distributes or sells in this state. All

3-45  records must be preserved for at least 3 years after the date of purchase or

3-46  after the date of the last entry made on the record.

3-47    2.  Every retail dealer shall keep at his place of business complete and

3-48  accurate records for that place of business, including copies of all itemized

3-49  invoices or purchases of such products purchased and delivered from

4-1  wholesale dealers. The invoices must show the name and address of the

4-2  wholesale dealer and the date of the purchase. All records must be

4-3  preserved for at least 3 years after the date of the purchase.

4-4    Sec. 7.  NRS 370.490 is hereby amended to read as follows:

4-5    370.490  1.  The department shall allow a credit of 30 percent of the

4-6  wholesale price, less a discount of 2 percent for the services rendered in

4-7  collecting the tax, for products made from tobacco, other than cigarettes,

4-8  upon which the tax has been paid pursuant to NRS 370.450 and that may

4-9  no longer be sold. If the products have been purchased and delivered, a

4-10  credit memo of the manufacturer is required for proof of returned

4-11  merchandise.

4-12    2.  A credit must also be granted for any products made from tobacco,

4-13  other than cigarettes, shipped from this state and destined for retail sale and

4-14  consumption outside the state on which the tax has previously been paid. A

4-15  duplicate or copy of the invoice is required for proof of the sale outside the

4-16  state.

4-17    3.  A wholesale dealer may claim a credit by filing with the department

4-18  the proof required by this section. The claim must be made on a form

4-19  prescribed by the department.

4-20    Sec. 8.  The amendatory provisions of this act do not apply to offenses

4-21  that were committed before July 1, 2001.

4-22    Sec. 9.  1.  Notwithstanding the provisions of NRS 370.450, as

4-23  amended by section 2 of this act, and NRS 370.465, as amended by section

4-24  4 of this act, a wholesale dealer is not required to pay any tax or report any

4-25  sales or purchases with respect to products made from tobacco, other than

4-26  cigarettes, if the purchase of such products was reported to the department

4-27  of taxation pursuant to NRS 370.465 as a purchase made before July 1,

4-28  2001, and the appropriate tax was remitted to the department with respect

4-29  to that purchase as required by NRS 370.450.

4-30    2.  As used in this section, “wholesale dealer” has the meaning ascribed

4-31  to it in NRS 370.440, as amended by section 1 of this act.

4-32    Sec. 10.  This act becomes effective on July 1, 2001.

 

4-33  H