sb 0317

CHAPTER 341

SB 317-FN – FINAL VERSION

AN ACT relative to the sale of tobacco products and the appeals process concerning the seizure of illegal tobacco products.

SPONSORS: Sen. Gottesman, Dist 12; Rep. Harding, Graf 11

I. Transfers licensing for retail tobacco sales from the department of revenue administration to the liquor commission.

II. Allows the department of revenue administration to collect the tobacco tax directly from consumers who purchase unstamped tobacco products.

III. Clarifies the appeals procedure for illegal tobacco seizure, forfeiture, or destruction orders.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to the sale of tobacco products and the appeals process concerning the seizure of illegal tobacco products.

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

341:1 Tobacco Tax; Licenses. RSA 78:2 is repealed and reenacted to read as follows:

I. Each manufacturer, wholesaler, and sub-jobber shall secure a license from the commissioner before engaging in the business of selling or distributing tobacco products in this state or continuing to engage in such business. Each wholesale and sub-job outlet shall have a separate license regardless of the fact that one or more outlets may be owned or controlled by a single person. The commissioner shall issue a license upon application stating such information necessary to identify the outlet and the character of business transacted. The fees for licenses shall be: $100 for a manufacturer’s license; $250 for a wholesaler’s license; and $150 for a sub-jobber’s license, for the purpose of helping to pay the cost of administering this chapter. Each license shall be prominently displayed on the premises described in it. Any person who shall sell, offer for sale or possess with intent to sell any tobacco products without such license as provided in this section or under RSA 178 shall be subject to the penalty provisions of RSA 21-J:39.

II. Notwithstanding RSA 21-J:14, information regarding licenses issued pursuant to this section and information regarding enforcement actions taken pursuant to this chapter and RSA 126-K shall be public records.

78:4 Term of License; Renewals. Licenses issued under RSA 78:2 shall expire on June 30 in each even-numbered year, unless sooner revoked or unless the business in respect to which the license was issued should change ownership. Licenses may be renewed upon signed application as provided in RSA 78:2 and upon paying the prescribed fee, provided that a license shall not be renewed if there are unpaid fees, fines, or penalties resulting from violations of this chapter or RSA [~~126-I~~] 126-K attributable to the license or the licensee.

78:6 Suspension and Revocation of License by Commissioner. The commissioner may adopt rules pursuant to RSA 541-A relative to [~~accomplishing the purpose of RSA 78~~] establishing procedures and criteria for tobacco license applications, tobacco enforcement penalties, and tobacco hearings for new licenses and renewals of licenses. The commissioner may suspend or revoke any license issued under RSA 78:2 for failure to comply with the provisions of this chapter and with any rules which the commissioner may adopt. The commissioner shall suspend or revoke any license issued under RSA 78:2 if ordered to do so pursuant to RSA [~~126-I~~] 126-K.

78:12-a Unauthorized Sales. Manufacturers, wholesalers, and sub-jobbers shall not sell tobacco products to any licensee who does not possess a valid or current license issued by the commissioner or issued by the liquor commission under RSA 178. Any person who violates the provisions of this section shall be subject to the penalty provisions of RSA 21-J:39.

78:14 Unstamped Tobacco Products. No sub-jobber, vending machine operator, or retailer, and no other person who is not licensed under the provisions of this chapter or licensed under the provisions of RSA 178, shall sell, offer for sale, display for sale, ship, store, import, transport, carry, or possess with or without intent to sell, any tobacco products not properly stamped under RSA 78:12 or 78:13, except as provided in RSA 78:12, II. This section shall not prevent any unlicensed person able to purchase unstamped tobacco products by statute from possessing such products for his or her own use or consumption, if the tax otherwise due under this chapter is paid by the unlicensed person to the department directly. The provisions of this section shall not apply to common carriers transporting unstamped tobacco products. Any person who violates the provisions of this section shall be guilty of a felony.

78:26 Inspection Authorized. The commissioner or any agent or employee of the department of revenue administration, and any policeman, constable, sheriff or deputy sheriff, or agent of the liquor commission may enter in and upon any place or premises where tobacco products are held, kept, located, or stored for the purpose of inspecting such products and ascertaining that the tobacco products at such premises, or any portion thereof, shall not be sold, used, or consumed in this state without the tobacco products tax first having been paid.

XXXIX. “License” means the authority granted by the commission to engage in the sale of liquor, wine, [or] beverages, or tobacco products otherwise unlawful unless evidenced by such document.

341:8 New Paragraph; Definitions; Retailer. Amend RSA 175:1 by inserting after paragraph LIX the following new paragraph:

LIX-a. “Retailer,” when used with respect to tobacco products, means any person who sells tobacco products to consumers, and any vending machine in which tobacco products are sold.

341:9 New Paragraph; Definitions; Sampling. Amend RSA 175:1 by inserting after paragraph LX-a the following new paragraph:

LX-b. “Sampling” means distributing free tobacco products to consumers for promotional purposes.

341:10 New Paragraphs; Definitions; Tobacco Products, Vending Machine. Amend RSA 175:1 by inserting after paragraph LXIV-c the following new paragraphs:

LXIV-d. “Tobacco products” means cigarettes, loose tobacco, and smokeless tobacco.

LXIV-e. “Vending machine” means any self-service device which, upon insertion of money, tokens, or any other form of payment, dispenses tobacco, cigarettes, or any other tobacco product.

III. Any member of the commission, assistant, or liquor investigator may enter any place where liquor, [or] beverages, or tobacco products are sold or manufactured, at any time, and may examine any license or permit issued or purported to have been issued under the terms of this title. They shall make complaints for violations of this title.

341:12 New Paragraph; Licenses Required. Amend RSA 178:1 by inserting after paragraph V the following new paragraph:

VI. No person shall sell tobacco products to individuals or the public in any method or manner, directly or indirectly, or keep for sale any tobacco products without first registering to do business with the secretary of state and obtaining a license for such activity under the provisions of this title. The commission shall provide a list of persons licensed under this section to the commissioner of the department of revenue administration upon request.

I. The commission may issue licenses to individuals, partnerships, limited liability companies and partnerships, or corporations but not to unincorporated associations, on applications duly made therefor for the manufacture, warehousing, sale, offer for sale, or solicitation of orders for sale of liquor or beverages and for retail sales of tobacco products within the state, subject to the limitations and restrictions imposed by this title. The commission shall keep a full record of all applications for licenses, of all recommendations for and remonstrances against the granting of licenses, and of the action taken on such applications.

178:4 Exception. Notwithstanding the provisions of RSA 178:3, the commission may issue liquor and beverage licenses to a person who has been convicted of a felony, other than abduction, arson, incest, manslaughter in the first degree, mayhem, murder, rape, robbery, or trafficking in drugs, provided that not less than 5 years shall have passed since such person completed his or her sentence or was placed on parole or probation, and, upon state and federal criminal history checks, the commission is satisfied that during this interim period the person has led an exemplary life, has no legal criminal actions pending, and has not been convicted of any further crime except for minor traffic violations.

I. Off-premises licenses shall be issued only for grocery and drug stores not holding on-premises licenses. Such licenses shall authorize the licensees to sell fortified wine, table wine, and beverages for consumption only off the premises designated in the licenses and not to other licensees for resale. Such sale shall be made only in the immediate container in which the beverage, wine, or fortified wine was received by the off-premises combination licensee; except that in the case of the holder of a wholesale distributor license, beverages may be sold only in such barrels, bottles, or other containers as the commission may by rule prescribe. Off-premises licenses may also authorize the licensee to sell tobacco products. There shall be no restriction on the number of combination [~~retail wine and beverage~~] licenses held by any person. The license shall authorize the licensee to transport and deliver beverages, [~~ordered from and sold by the licensee and to transport and deliver~~] tobacco products, and table or fortified wines ordered from and sold [~~by the commission and sold~~] by the licensee in vehicles operated under the licensee’s control or an employee’s control.

II. All sales of tobacco, beverages, fortified wines, and table wine shall be recorded on cash registers. No additional registers shall be added during the remainder of the year without prior approval of the commission. No rebate shall be allowed for cash registers discontinued during the license year.

III. The commission may suspend the tobacco or alcohol sales portion of the license separately under the provisions of RSA 179:57; any revocation shall revoke the entire license.

I. A retail wine license may be issued by the commission to any person operating a retail outlet in this state which shall allow the licensee to sell [~~both~~] tobacco products, fortified wines, and table wines directly to individuals at retail on the premises for consumption off the premises; provided, however, that persons holding any license authorizing the sale of liquor or wine by the glass under this chapter shall sell the wines authorized pursuant to this section in a separate area of the premises from the areas licensed for on-premises consumption. A separate license shall be required with respect to each place of business of an applicant. The license shall authorize the licensee to transport and deliver fortified and table wines ordered from and sold by the commission and sold by the licensee in vehicles operated under the licensee’s control or an employee’s control.

II. All sales of wine and tobacco products shall be recorded on cash registers. No additional registers shall be added during the remainder of the year without prior approval of the commission. No rebate shall be allowed for cash registers discontinued during the license year.

III. On-premises licensees licensed under this chapter shall maintain separate rooms for storage, shelving, display, and sale of tobacco products and fortified and table wine for consumption off the premises. Such rooms shall be equipped with at least one cash register which shall be capable of separately registering wine sales, and such rooms shall have an attendant at all times while open for business. Wine purchased for resale by virtue of the retail wine license shall be purchased on separate invoices from that wine intended for consumption in the dining room or lounge, and separate sales records shall be maintained for this purpose.

IV. The commission may suspend the tobacco or alcohol sales portion of the license separately under the provisions of RSA 179:57; any revocation shall revoke the entire license.

I. The commission may issue a retail tobacco license to a person engaged in the business of retail sales and distribution of tobacco products in this state. Each retail outlet shall have a separate license regardless of the fact that one or more outlets may be owned or controlled by a single person.

II. A retail tobacco license shall be prominently displayed on the premises described in it.

III. The commission, when issuing or renewing a retail tobacco license, shall furnish a sign which shall read or be substantially similar to the following: “State Law prohibits the sale of tobacco products to persons under age 18. Warning: violators of these provisions may be subject to a fine.”

I. The commission may issue a tobacco vending machine license to a person engaged in the business of operating vending machines for retail sales and distribution of tobacco products in this state.

II. Tobacco vending machine licensees shall register each vending machine with the commission and obtain a permit for each machine. Such permit shall be displayed on the machine, and each machine shall have a separate permit regardless of the fact that one or more machines may be owned or controlled by a single licensee.

178:19-c Tobacco Sampling License. The commission may issue a tobacco sampling license to an individual engaged in the business of public sampling of tobacco products in this state. Each individual engaged in public sampling shall obtain a license. Public sampling shall be considered an indirect sale under RSA 178:1, VI.

341:16 New Paragraph; Fees; Tobacco Licenses. Amend RSA 178:29 by inserting after paragraph V the following new paragraph:

341:17 New Paragraph; Suspension or Revocation. Amend RSA 179:57 by inserting after paragraph II the following new paragraph:

III. The commission shall, upon notification by the commissioner of the department of revenue administration of a tobacco tax violation, suspend or revoke any tobacco license issued under RSA 178. Any challenge to such suspension or revocation shall be made to the commissioner of the department of revenue administration.

341:18 Youth Access to Tobacco Products; Penalties. RSA 126-K:12, III is repealed and reenacted to read as follows:

III. The commission may issue administrative warnings, assess fines, and suspend or revoke a license issued pursuant to RSA 178 for a specified period of time for violations of this chapter.

78:7-a Nature of Tax. All taxes upon tobacco products under this chapter are declared to be a direct tax upon the consumer at retail and shall conclusively be presumed to be pre-collected for the purpose of convenience and facility only. Accordingly, the commissioner may collect the tax directly from consumers who purchase unstamped tobacco products.

341:21 Seizure, Forfeiture, and Destruction of Illegal Tobacco Products; Appeals Procedure. Amend RSA 78:16 to read as follows:

I. Unless the tobacco products are subject to the exemption under RSA 78:12, II, tobacco products found at any place in this state without the necessary stamps affixed to them, unless they shall be in the possession of a licensed manufacturer or wholesaler, or unless they shall be in the course of transit by common carrier from a bonded warehouse and consigned to a licensed manufacturer, wholesaler or anyone exempted by statute, shall be declared to be contraband goods and subject to forfeiture to the state.

II. The commissioner, the commissioner's authorized agents, sheriffs, deputy sheriffs, and police officers shall have the power to seize such tobacco products in the manner provided under RSA 617 or by immediately seizing the contraband tobacco products and providing the owner with the opportunity to appeal the seizure through an administrative proceeding before the department. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the seizure and destruction of contraband tobacco products and the [~~appeals~~] hearings procedure.

341:22 New Section; Appeals of License Revocation or Suspension Orders and Tobacco Seizure Orders. Amend RSA 78 by inserting after section 31 the following new section:

78:31-a Appeals of License Revocation or Suspension Orders and Seizure, Forfeiture, or Destruction of Illegal Tobacco Products Orders.

I. This section shall apply only to appeals of final orders regarding license revocation or suspension under RSA 78:6 and final orders regarding seizure, forfeiture, and destruction of illegal tobacco products under RSA 78:16. Proceedings regarding assessments of tax, penalties, and interest and requests for refund of tax, penalties, and interest shall be taken under RSA 21-J:28-b.

II. Within 30 days of the notice of a final order by the commissioner, the owner or licensee, as applicable, may appeal such order by written application to the board of tax and land appeals. The board of tax and land appeals shall hear the appeal de novo.