HOUSE OF REPRESENTATIVES

H.B. NO.

1636

TWENTY-NINTH LEGISLATURE, 2018

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to health.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that tobacco use is the single most preventable cause of disease, disability, and death in the United States.  Tobacco use continues to be a problem in Hawaii, causing approximately one thousand four hundred deaths per year among adults.  An estimated twenty-one thousand children in Hawaii currently under the age of eighteen will ultimately die prematurely from smoking.  Tobacco use poses a heavy burden on Hawaii's health care system and economy.  Each year, smoking costs approximately $526,000,000 in direct health care expenditures and $387,300,000 in lost productivity in the State.

     The legislature further finds that tobacco products are addictive and inherently dangerous, causing many different types of cancer, heart disease, and other serious illnesses.  Secondhand smoke causes stroke, lung cancer, and coronary heart disease.  Children exposed to secondhand smoke are at a higher risk of sudden infant death syndrome, acute respiratory infections, middle ear disease, more severe asthma, respiratory problems, and slowed lung growth.  Hawaii has a substantial interest in reducing the number of individuals of all ages who use tobacco products, and a particular interest in protecting adolescents from tobacco dependence and the illnesses and premature death associated with tobacco use.

     The legislature believes that one method of reducing the consumption of tobacco in Hawaii is through taxation.  Nationwide, a ten per cent increase in cigarette taxes has been shown to decrease cigarette consumption five to fifteen per cent for minors and three to seven per cent for adults.  On average, a one per cent increase in cigarette price will reduce youth cigarette consumption by one per cent.  Preventing minors from starting to smoke will help them lead a longer, healthier, and more productive life.

     The purpose of this Act is to reduce tobacco and cigarette consumption in Hawaii by increasing the costs to sell and purchase tobacco and cigarette products.

     SECTION 2.  Section 245-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The license shall be issued by the department upon application therefor, in such form and manner as shall be required by rule of the department, and the payment of a fee of [$2.50,] $500, and shall be renewable annually on July 1 for the twelve months ending the succeeding June 30."

     SECTION 3.  Section 245-3, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  Every wholesaler or dealer, in addition to any other taxes provided by law, shall pay for the privilege of conducting business and other activities in the State:

     (1)  An excise tax equal to 5.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 1998, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (2)  An excise tax equal to 6.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after September 30, 2002, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (3)  An excise tax equal to 6.50 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2003, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (4)  An excise tax equal to 7.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2004, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (5)  An excise tax equal to 8.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2006, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (6)  An excise tax equal to 9.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2007, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (7)  An excise tax equal to 10.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after September 30, 2008, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (8)  An excise tax equal to 13.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer on and after July 1, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

     (9)  An excise tax equal to 11.00 cents for each little cigar sold, used, or possessed by a wholesaler or dealer on and after October 1, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

    (10)  An excise tax equal to 15.00 cents for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2010, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

    (11)  An excise tax equal to 16.00 cents for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2011, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

    (12)  An excise tax equal to 22.50 cents for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2018, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

    (13)  An excise tax equal to seventy per cent of the wholesale price of each article or item of tobacco products, other than large cigars, sold by the wholesaler or dealer on and after September 30, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer; [and

    (13)] (14)  An excise tax equal to eighty per cent of the wholesale price of each article or item of tobacco products, other than large cigars, sold by the wholesaler or dealer on and after July 1, 2018, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer; and

    (15)  An excise tax equal to fifty per cent of the wholesale price of each large cigar of any length, sold, used, or possessed by a wholesaler or dealer on and after September 30, 2009, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer.

Where the tax imposed has been paid on cigarettes, little cigars, or tobacco products that thereafter become the subject of a casualty loss deduction allowable under chapter 235, the tax paid shall be refunded or credited to the account of the wholesaler or dealer.  The tax shall be applied to cigarettes through the use of stamps."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

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Report Title:

Tobacco; Taxes; Cigarette; Cigar; License

 

Description:

Increases the license fee for wholesalers or dealers of cigarettes and tobacco products.  Increases the taxes on cigarettes and tobacco products.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.