SB 0491

This bill allows the commissioner of revenue administration to seek reimbursement from a retailer who fails to pay for delivered tobacco products, when the commissioner has refunded to a wholesaler the purchase price for tobacco tax stamps attached to such products.

The bill also requires the commissioner to refund the purchase price for tobacco tax stamps which are stolen.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Reimbursement for Refunds; Tobacco Tax Stamps. Amend RSA 78:10 to read as follows:

78:10 Resale of Stamps; Redemption. No wholesaler shall sell or transfer any stamps issued under RSA 78:9. The commissioner shall redeem any unused, uncancelled stamps presented by any licensed wholesaler at a price equal to the amount paid by such licensee. In case such stamps are destroyed or stolen before they are affixed, the commissioner shall refund the purchase price upon presentation of evidence of such destruction or theft satisfactory to the commissioner. The commissioner shall refund the purchase price for stamps and metered impressions which are destroyed after affixing to outdated, damaged, or unsaleable tobacco products. The commissioner shall refund the purchase price for stamps and metered impressions affixed to tobacco products and delivered to a retailer by a wholesaler in the event such retailer does not pay the wholesaler for the product delivered. In such event, the commissioner is authorized to seek reimbursement for the amount refunded from the retailer who failed to pay for the delivered product. The commissioner also shall refund or provide a credit for future tax payments on outdated, damaged, or unsaleable tobacco products exempted from bearing stamps by the commissioner under rules adopted under RSA 541-A. The state treasurer shall provide, out of money collected under this chapter, the funds necessary for redemption or refund.

The Department of Revenue Administration states this bill will decrease state unrestricted general fund revenues by $43,000 in FY 2006 and each year thereafter, and increase state expenditures by $100,682 in FY 2006, $93,489 in FY 2007 and $97,690 in FY 2008. There is no fiscal impact to county and local revenue or expenditures.

The Department states that this bill adds stolen stamp tax inventory to the items that can be refunded to wholesalers. The Department determined the revenue decrease by contacting primary wholesalers who stated that lost or stolen tobacco products totaled $30,000. Since $30,000 represents 70% of all tobacco activity, the Department projects that at 100%, the total stolen product loss would be $43,000.

The Department estimates that state expenditures will increase by the amounts shown in the table below. The Department determined it would need an Auditor (labor grade 21) and Tax Compliance Officer (labor grade 21) to perform the enforcement and validation functions of investigating stolen tobacco stamp claims.

FY 2006 FY 2007 FY 2008

Salary:

Compliance Officer $ 31,727 $33,053 $34,515

(LG 21-step 1)

Auditor 31,727 33,053 34,515

(LG 21-step 1)

Benefits 23,478 24,458 25,542

Vehicle Travel 2,750 2,925 3,118

Vehicle Purchase 11,000 ________ ________

Total $100,682 $93,489 $97,690

The Department assumes an implementation date of July 1, 2005.