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S.F. No. 1252 - Cigarette Stamp Discount Provision (as proposed by the A-1 amendment)
 
Author: Senator Lyle Koenen
 
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
 
Date: April 7, 2015



 

This bill provides for a discount for distributors who purchase cigarette stamps.  Under current law, the commissioner of revenue charges distributors for the face value of the stamp, the costs of the stamp and the stamp shipping costs.  This bill removes the commissioner’s charge for the cost of the stamp and allows a 0.45 percent discount on the face value of the stamp.  The portion of the face value attributable to the cigarette sales tax is not included in the amount allowed to be discounted.  Effective for stamps made after June 30, 2015.

Section

Provision

1

Provides that the commissioner must charge the tax value of the cigarette stamps plus shipping costs.  Shipping costs recovered must be deposited into the general fund. 
 

2

Requires the commissioner to sell stamps at a 0.45 percent discount on the face value of the stamps purchased in a fiscal year.  The discount does not apply to the cigarette sales tax portion of the face value.  In 2015, the face value of a cigarette stamp is the sum of the $2.90/pack excise tax plus the 52.6 cents/pack in-lieu sales tax.  Under this proposal, the 0.45 percent discount would apply only to the per-pack excise tax amount.    
 

3

Removes the requirement that the commissioner recover the actual cost of stamps from the distributor.
 

4

Requires that the 0.45 percent discount authorized under section 2 be factored into the distributor remittance filed with the monthly return.

 

 
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