May 24, 2016, Introduced by Reps. Yanez, Moss, Darany, Plawecki, Greig, Liberati, Cochran, Hovey-Wright, Love, Faris and Wittenberg and referred to the Committee on Regulatory Reform.
A bill to amend 1993 PA 327, entitled
"Tobacco products tax act,"
by amending sections 2, 7, 11, and 12 (MCL 205.422, 205.427,
205.431, and 205.432), section 2 as amended by 2012 PA 188,
sections 7 and 11 as amended by 2016 PA 86, and section 12 as
amended by 2014 PA 272.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Cigarette" means a roll for smoking made wholly or in
part of tobacco, irrespective of size or shape and irrespective of
the tobacco being flavored, adulterated, or mixed with any other
ingredient, which roll has a wrapper or cover made of paper or any
other material. Cigarette does not include cigars.
(b) "Cigarette making machine" means any machine or other
mechanical device which meets all of the following criteria:
(i) Is capable of being loaded with loose tobacco, cigarette
tubes or cigarette papers, and any other components related to the
production of cigarettes, including, but not limited to, cigarette
filters.
(ii) Is designed to automatically or mechanically produce,
roll, fill, dispense, or otherwise generate cigarettes.
(iii) Is commercial-grade or otherwise designed or suitable
for commercial use.
(iv) Is designed to be powered or otherwise operated by a main
or primary power source other than human power.
(c) "Commissioner" means the state treasurer.
(d) "Counterfeit cigarette" means a cigarette in an individual
package of cigarettes or other container with a false manufacturing
label or a cigarette in an individual package of cigarettes or
other container with a counterfeit stamp.
(e) "Counterfeit cigarette paper" means a cigarette paper with
a false manufacturing label or that has not been printed,
manufactured, or made by authority of the trademark owner.
(f) "Counterfeit stamp" means any stamp, label, or print,
indicium, or character, that evidences, or purports to evidence,
the payment of any tax levied under this act and that has not been
printed, manufactured, or made by authority of the department as
provided in this act and has not been issued, sold, or circulated
by the department.
(g) "Department" means the department of treasury.
(h) "Electronic smoking device" means any device containing or
delivering nicotine or any other substance intended for human
consumption through the inhalation of vapor or aerosol from the
product. Electronic smoking device also includes devices
manufactured, distributed, marketed, or sold as an e-cigarette, e-
pipe, vape pen, e-hookah, or any other similar device. Electronic
smoking device does not include any battery or battery charger that
is sold separately. In addition, electronic smoking device does not
include a product specifically approved by the United States Food
and Drug Administration for sale as a tobacco cessation product
that is being marketed and sold solely for the approved purpose.
(i) (h)
"Financially sound" means
a determination by the
department that the wholesaler or unclassified acquirer is able to
pay for its stamps in the ordinary course of business based on
criteria including, but not limited to, all of the following:
(i) Past filing and payment history with the department.
(ii) Outstanding liabilities.
(iii) Review of current financial statements including, but
not limited to, balance sheets and income statements.
(iv) Duration that the wholesaler or unclassified acquirer has
been licensed under this act.
(j) (i)
"Gray market cigarette"
means any cigarette the
package of which bears any statement, label, stamp, sticker, or
notice indicating that the manufacturer did not intend the
cigarettes to be sold, distributed, or used in the United States,
including, but not limited to, a label stating "For Export Only",
"U.S. Tax Exempt", "For Use Outside U.S.", or similar wording.
(k) (j)
"Gray market cigarette
paper" means any cigarette
paper the package of which bears any statement, label, stamp,
sticker, or notice indicating that the manufacturer did not intend
the cigarette papers to be sold, distributed, or used in the United
States, including, but not limited to, a label stating "For Export
Only", "U.S. Tax Exempt", "For Use Outside U.S.", "For Use in
______________ (another country) Only", or similar wording.
(l) (k)
"Individual package" means
an individual packet or
pack used to contain or to convey cigarettes to the consumer.
Individual package does not include cartons, cases, or shipping or
storage containers that contain smaller packaging units of
cigarettes.
(m) (l) "Licensee"
means a person licensed under this act.
(n) (m)
"Manufacturer" means any
of the following:
(i) A person who manufactures or produces a tobacco product.
(ii) A person who operates or who permits any other person to
operate a cigarette making machine in this state for the purpose of
producing, filling, rolling, dispensing, or otherwise generating
cigarettes. A person who is a manufacturer under this subparagraph
shall constitute a nonparticipating manufacturer for purposes of
sections 6c and 6d. A person who operates or otherwise uses a
machine or other mechanical device, other than a cigarette making
machine, to produce, roll, fill, dispense, or otherwise generate
cigarettes shall not be considered a manufacturer as long as the
cigarettes are produced or otherwise generated in that person's
dwelling and for that person's self-consumption. For purposes of
this act, "self-consumption" means production for personal
consumption or use and not for sale, resale, or any other profit-
making endeavor.
(o) (n)
"Noncigarette smoking
tobacco" means tobacco sold in
loose or bulk form that is intended for consumption by smoking and
includes pipe tobacco and roll-your-own cigarette tobacco.
(p) (o)
"Person" means an
individual, partnership, fiduciary,
association, limited liability company, corporation, or other legal
entity.
(q) (p)
"Place of business" means
a place where a tobacco
product is sold or where a tobacco product is brought or kept for
the purpose of sale or consumption, including a vessel, airplane,
train, or vending machine.
(r) (q)
"Retailer" means a person
other than a transportation
company who operates a place of business for the purpose of making
sales of a tobacco product at retail.
(s) (r)
"Sale" means a
transaction by which the ownership of
tangible personal property is transferred for consideration and
applies also to use, gifts, exchanges, barter, and theft.
(t) (s)
"Secondary wholesaler"
means a person who sells a
tobacco product for resale, who purchases a tobacco product from a
wholesaler or unclassified acquirer licensed under this act, and
who maintains an established place of business in this state where
a substantial portion of the business is the sale of tobacco
products and related merchandise at wholesale, and where at all
times a substantial stock of tobacco products and related
merchandise is available to retailers for resale.
(u) (t)
"Smokeless tobacco" means
snuff, snus, chewing
tobacco, and any other tobacco that is intended to be consumed,
whether heated, chewed, absorbed, dissolved, inhaled, snorted,
sniffed, or ingested, by any means other than smoking. Beginning
October 1, 2016, smokeless tobacco includes electronic smoking
devices.
(v) (u)
"Stamp" means a
distinctive character, indication, or
mark, as determined by the department, attached or affixed to an
individual package of cigarettes by mechanical device or other
means authorized by the department to indicate that the tax imposed
under this act has been paid.
(w) (v)
"Stamping agent" means a
wholesaler or unclassified
acquirer other than a manufacturer who is licensed and authorized
by the department to affix stamps to individual packages of
cigarettes on behalf of themselves and other wholesalers or
unclassified acquirers other than manufacturers.
(x) (w)
"Tobacco product" means
cigarettes, cigars,
noncigarette smoking tobacco, or smokeless tobacco.
(y) (x)
"Transportation company"
means a person operating, or
supplying to common carriers, cars, boats, or other vehicles for
the transportation or accommodation of passengers and engaged in
the sale of a tobacco product at retail.
(z) (y)
"Transporter" means a
person importing or transporting
into this state, or transporting in this state, a tobacco product
obtained from a source located outside this state, or from any
person not duly licensed under this act. Transporter does not
include an interstate commerce carrier licensed by the interstate
commerce commission to carry commodities in interstate commerce, or
a licensee maintaining a warehouse or place of business outside of
this state if the warehouse or place of business is licensed under
this act.
(aa) (z)
"Unclassified acquirer"
means a person, except a
transportation company or a purchaser at retail from a retailer
licensed under the general sales tax act, 1933 PA 167, MCL 205.51
to 205.78, who imports or acquires a tobacco product from a source
other than a wholesaler or secondary wholesaler licensed under this
act for use, sale, or distribution. Unclassified acquirer also
means a person who receives cigars, noncigarette smoking tobacco,
or smokeless tobacco directly from a manufacturer licensed under
this act or from another source outside this state, which source is
not licensed under this act. An unclassified acquirer does not
include a wholesaler.
(bb) (aa)
"Vending machine
operator" means a person who
operates 1 or more vending machines for the sale of a tobacco
product and who purchases a tobacco product from a manufacturer,
licensed wholesaler, or secondary wholesaler.
(cc) (bb)
"Wholesale price" means
the actual price paid for a
tobacco product, including any tax, by a wholesaler or unclassified
acquirer to a manufacturer, excluding any discounts or reductions.
(dd) (cc)
"Wholesaler" means a
person who purchases all or
part of his or her tobacco products from a manufacturer, who sells
75% or more of those tobacco products to others for resale, and who
maintains an established business where substantially all of the
business is the sale of tobacco products or cigarettes and related
merchandise at wholesale and where at all times a substantial stock
of tobacco products and related merchandise is available to
retailers for resale. Wholesaler includes a chain of stores
retailing a tobacco product to the consumer if 75% of its stock of
tobacco products is purchased directly from the manufacturer.
Sec. 7. (1) Beginning May 1, 1994, a tax is levied on the sale
of tobacco products sold in this state as follows:
(a) Through July 31, 2002, for cigars, noncigarette smoking
tobacco, and smokeless tobacco, 16% of the wholesale price.
(b) For cigarettes, 37.5 mills per cigarette.
(c) Beginning August 1, 2002, for cigarettes, in addition to
the tax levied in subdivision (b), an additional 15 mills per
cigarette.
(d) Beginning August 1, 2002, for cigarettes, in addition to
the tax levied in subdivisions (b) and (c), an additional 10 mills
per cigarette.
(e) Beginning July 1, 2004, for cigarettes, in addition to the
tax levied in subdivisions (b), (c), and (d), an additional 37.5
mills per cigarette.
(f) Beginning August 1, 2002 and through June 30, 2004, for
cigars, noncigarette smoking tobacco, and smokeless tobacco, 20% of
the wholesale price.
(g) Beginning July 1, 2004, for cigars, noncigarette smoking
tobacco, and smokeless tobacco other than electronic smoking
devices, 32% of the wholesale price. However, beginning November 1,
2012 and through October 31, 2021, the amount of tax levied under
this subdivision on cigars shall not exceed 50 cents per individual
cigar.
(h) Beginning October 1, 2016, for electronic smoking devices,
32% of the wholesale price.
(2) On or before the twentieth day of each calendar month,
every licensee under section 3 other than a retailer, unclassified
acquirer licensed as a manufacturer, or vending machine operator
shall file a return with the department stating the wholesale price
of each tobacco product other than cigarettes purchased, the
quantity of cigarettes purchased, the wholesale price charged for
all tobacco products other than cigarettes sold, the number of
individual packages of cigarettes and the number of cigarettes in
those individual packages, and the number and denominations of
stamps affixed to individual packages of cigarettes sold by the
licensee for each place of business in the preceding calendar
month. The return shall also include the number and denomination of
unaffixed stamps in the possession of the licensee at the end of
the preceding calendar month. Wholesalers shall also report
accurate inventories of cigarettes, both stamped and unstamped at
the end of the preceding calendar month. Wholesalers and
unclassified acquirers shall also report accurate inventories of
affixed and unaffixed stamps by denomination at the beginning and
end of each calendar month and all stamps acquired during the
preceding calendar month. The return shall be signed under penalty
of perjury. The return shall be on a form prescribed by the
department and shall contain or be accompanied by any further
information the department requires. The department may also
require licensees to report cigarette acquisition, purchase, and
sales information in other formats and frequency.
(3) To cover the cost of expenses incurred in the
administration of this act, at the time of the filing of the
return, the licensee shall pay to the department the tax levied in
subsection (1) for tobacco products sold during the calendar month
covered by the return, less compensation equal to the following:
(a) One percent of the total amount of the tax due on tobacco
products sold other than cigarettes.
(b) Through July 31, 2002, 1.25% of the total amount of the
tax due on cigarettes sold.
(c) Beginning August 1, 2002, 1.5% of the total amount of the
tax due on cigarettes sold and, beginning on June 20, 2012, for
sales of untaxed cigarettes to Indian tribes in this state, an
amount equal to 1.5% of the total amount of the tax due on those
cigarettes sold as if those cigarette sales were taxable sales
under this act.
(d) Beginning on the first calendar month following the
implementation of the use of digital stamps as provided in section
5a(2), for licensees who are stamping agents, 0.5% of the total
amount of the tax due on cigarettes sold and, for sales of untaxed
cigarettes to Indian tribes in this state, 0.5% of the total amount
of the tax due on those cigarettes sold as if those cigarette sales
were taxable sales under this act, until the stamping agent is
compensated in an amount equal to the direct cost actually incurred
by the stamping agent for the purchase of upgrades to technology
and equipment, excluding the equipment reimbursed under subdivision
(e), that are necessary to affix the digital stamp as determined by
the department. Compensation under this subdivision may also be
claimed by a stamping agent for the direct costs actually incurred
by the stamping agent, as determined by the department and
reflected in the net purchase price, for the initial and 1-time
purchase of case packers or similar machines or conveyors as
follows:
(i) Case packers or similar machines to be used exclusively to
repack cigarette cartons into case boxes after digital stamps have
been applied by eligible equipment to the individual packages of
cigarettes contained within those cigarette cartons. Compensation
under this subparagraph may only be claimed by a stamping agent if
the case packers or similar machines are in addition to, and not a
replacement for, 1 or more case packers or similar machines used in
connection with cigarette stamping machines which do not use the
digital stamp authorized under this act.
(ii) Conveyors to be used exclusively for that portion of a
cigarette stamping line that is necessary for and dedicated to
cigarette stamping operations using eligible equipment to affix
digital stamps to individual packages of cigarettes to be sold in
this state. Compensation under this subparagraph may only be
claimed by a stamping agent if the cigarette stamping line served
by the conveyors is in addition to 1 or more distinct and existing
cigarette stamping lines using stamping machines which do not use
the digital stamp authorized under this act and that compensation
shall not exceed a total of 50% of the amount reimbursed under
subdivision (e) for any particular stamping agent.
(iii) Compensation under subparagraphs (i) and (ii) shall also
include any applicable sales or use taxes paid, and shipping and
crating charges actually incurred, by the stamping agent in
connection with the purchase, but shall exclude any other costs
incurred by the stamping agent not otherwise expressly provided for
in this subdivision, including, but not limited to, charges for
installation and ongoing maintenance.
(e) Beginning in the first calendar month following the
implementation of the use of digital stamps as provided in section
5a(2) and continuing for the immediately succeeding 17 months, for
licensees who are stamping agents, reimbursement of direct costs
actually incurred by the stamping agent, as determined by the
department, for the initial purchase of eligible equipment in an
amount equal to 5.55% of the total net purchase price of the
eligible equipment necessary to affix the digital stamp. The
reimbursement provided under this subdivision shall also include
reimbursement for any applicable sales or use taxes paid and
shipping and crating charges actually incurred by the stamping
agent for the initial purchase of eligible equipment, but shall
exclude reimbursement for any other costs incurred by the stamping
agent not otherwise expressly provided for in this subdivision,
including, but not limited to, charges for installation and ongoing
maintenance related to eligible equipment. A stamping agent may
only receive reimbursement under this subdivision to the extent
that the eligible equipment purchased by the stamping agent does
not exceed the total number of the stamping agent's existing
equipment as certified by the stamping agent on a form prescribed
by the department.
(f) Beginning in the first calendar month following the
implementation of the use of digital stamps as provided in section
5a(2), for licensees who are stamping agents, reimbursement of
qualified equipment costs actually incurred by the stamping agent,
not otherwise compensated or reimbursed under subdivision (d) or
(e), as determined by the department. The reimbursement provided
under this subdivision shall not exceed $60,000.00 for all stamping
agents combined.
(4) Every licensee and retailer who, on August 1, 2002, has on
hand for sale any cigarettes upon which a tax has been paid
pursuant to subsection (1)(b) shall file a complete inventory of
those cigarettes before September 1, 2002 and shall pay to the
department at the time of filing this inventory a tax equal to the
difference between the tax imposed in subsection (1)(b), (c), and
(d) and the tax that has been paid under subsection (1)(b). Every
licensee and retailer who, on August 1, 2002, has on hand for sale
any cigars, noncigarette smoking tobacco, or smokeless tobacco upon
which a tax has been paid pursuant to subsection (1)(a) shall file
a complete inventory of those cigars, noncigarette smoking tobacco,
and smokeless tobacco before September 1, 2002 and shall pay to the
department at the time of filing this inventory a tax equal to the
difference between the tax imposed in subsection (1)(f) and the tax
that has been paid under subsection (1)(a).
(5) Every licensee and retailer who, on July 1, 2004, has on
hand for sale any cigarettes upon which a tax has been paid
pursuant to subsection (1)(b), (c), and (d) shall file a complete
inventory of those cigarettes before August 1, 2004 and shall pay
to the department at the time of filing this inventory a tax equal
to the difference between the tax imposed in subsection (1)(b),
(c), (d), and (e) and the tax that has been paid under subsection
(1)(b), (c), and (d). Every licensee and retailer who, on July 1,
2004, has on hand for sale any cigars, noncigarette smoking
tobacco, or smokeless tobacco upon which a tax has been paid
pursuant to subsection (1)(f) shall file a complete inventory of
those cigars, noncigarette smoking tobacco, and smokeless tobacco
before August 1, 2004 and shall pay to the department at the time
of filing this inventory a tax equal to the difference between the
tax imposed in subsection (1)(g) and the tax that has been paid
under subsection (1)(f). The proceeds derived under this subsection
shall be credited to the Michigan Medicaid benefits trust fund
created under section 5 of the Michigan trust fund act, 2000 PA
489, MCL 12.255.
(6) The department may require the payment of the tax imposed
by this act upon the importation or acquisition of a tobacco
product. A tobacco product for which the tax under this act has
once been imposed and that has not been refunded if paid is not
subject upon a subsequent sale to the tax imposed by this act.
(7) An abatement or refund of the tax provided by this act may
be made by the department for causes the department considers
expedient. The department shall certify the amount and the state
treasurer shall pay that amount out of the proceeds of the tax.
(8) A person liable for the tax may reimburse itself by adding
to the price of the tobacco products an amount equal to the tax
levied under this act.
(9) A wholesaler, unclassified acquirer, or other person shall
not sell or transfer any unaffixed stamps acquired by the
wholesaler or unclassified acquirer from the department. A
wholesaler or unclassified acquirer who has any unaffixed stamps on
hand at the time its license is revoked or expires, or at the time
it discontinues the business of selling cigarettes, shall return
those stamps to the department. The department shall refund the
value of the stamps, less the appropriate discount paid.
(10) If the wholesaler or unclassified acquirer has unsalable
packs returned from a retailer, secondary wholesaler, vending
machine operator, wholesaler, or unclassified acquirer with stamps
affixed, the department shall refund the amount of the tax less the
appropriate discount paid. If the wholesaler or unclassified
acquirer has unaffixed unsalable stamps, the department shall
exchange with the wholesaler or unclassified acquirer new stamps in
the same quantity as the unaffixed unsalable stamps. An application
for refund of the tax shall be filed on a form prescribed by the
department for that purpose, within 4 years from the date the
stamps were originally acquired from the department. A wholesaler
or unclassified acquirer shall make available for inspection by the
department the unused or spoiled stamps and the stamps affixed to
unsalable individual packages of cigarettes. The department may, at
its own discretion, witness and certify the destruction of the
unused or spoiled stamps and unsalable individual packages of
cigarettes that are not returnable to the manufacturer. The
wholesaler or unclassified acquirer shall provide certification
from the manufacturer for any unsalable individual packages of
cigarettes that are returned to the manufacturer.
(11) On or before the twentieth of each month, each
manufacturer shall file a report with the department listing all
sales of tobacco products to wholesalers and unclassified acquirers
during the preceding calendar month and any other information the
department finds necessary for the administration of this act. This
report shall be in the form and manner specified by the department.
(12) Each wholesaler or unclassified acquirer shall submit to
the department an unstamped cigarette sales report on or before the
twentieth day of each month covering the sale, delivery, or
distribution of unstamped cigarettes during the preceding calendar
month to points outside of this state. A separate schedule shall be
filed for each state, country, or province into which shipments are
made. For purposes of the report described in this subsection,
"unstamped cigarettes" means individual packages of cigarettes that
do not bear a Michigan stamp. The department may provide the
information contained in this report to a proper officer of another
state, country, or province reciprocating in this privilege.
(13) As used in subsection (3):
(a) "Eligible equipment" means a cigarette tax stamping
machine that meets all of the following conditions:
(i) Was purchased by a stamping agent who was licensed as a
stamping agent as of December 31, 2011.
(ii) Enables the stamping agent to affix digital stamps to
individual packages of cigarettes in accordance with the
requirements under section 6a(2).
(iii) Was purchased to be used for the primary purpose of
permitting the stamping agent to affix digital stamps to individual
packages of cigarettes to be sold in this state following the
implementation of the use of digital stamps as provided in section
5a(2).
(b) "Existing equipment" means a cigarette tax stamping
machine that meets all of the following conditions:
(i) Was owned by a person who was licensed as a stamping agent
as of December 31, 2011.
(ii) Was a cigarette tax stamping machine used prior to
January 1, 2012 by the stamping agent to apply stamps using stamp
rolls of 30,000 stamps.
(c) "Qualified equipment" means equipment that was placed in
service by a stamping agent that included conveyors and additional
associated electrical line and compressed air line before August
15, 2014 in connection with the implementation of a digital
stamping line under a pilot program with the department as
determined by the department. Qualified equipment does not include
the cost of installation of a conveyor.
Sec. 11. (1) A person, either as principal or agent, shall not
sell or solicit a sale of a tobacco product to be shipped, mailed,
or otherwise sent or brought into the state, to a person not a
licensed manufacturer, licensed wholesaler, licensed secondary
wholesaler, licensed vending machine operator, licensed
unclassified acquirer, licensed transporter, or licensed
transportation company, unless the tobacco product is to be sold to
or through a licensed wholesaler.
(2) All sales conducted through the Internet, by telephone, or
in a mail-order transaction shall not be completed unless, before
each
delivery of cigarettes tobacco
products is made, whether
through the mail, through a transportation company, or through any
other delivery system, the seller has obtained from the purchaser
an affirmation that includes a copy of a valid government-issued
document that confirms the purchaser's name, address, and date of
birth showing that the purchaser is at least the legal minimum age
to
purchase cigarettes; tobacco
products; that the cigarettes
tobacco products purchased are not intended for consumption by an
individual who is younger than the legal minimum age to purchase
cigarettes;
tobacco products; and a written statement signed by the
purchaser that affirms the purchaser's address and that the
purchaser
is at least the minimum legal age to purchase cigarettes.
tobacco products. The statement shall also confirm that the
purchaser understands that signing another person's name to the
affirmation
is illegal; that the sale of cigarettes tobacco
products to individuals under the legal minimum purchase age is
illegal;
and that the purchase of cigarettes tobacco products by
individuals under the legal minimum purchase age is illegal under
the laws of the state of Michigan. The seller shall verify the
information contained in the affirmation provided by the purchaser
against a commercially available database of governmental records,
or obtain a photocopy, fax copy, or other image of the valid,
government-issued identification stating the date of birth or age
of the purchaser.
(3) All invoices, bills of lading, sales receipts, or other
documents
related to cigarette tobacco
product sales conducted
through
the internet, Internet, by telephone, or in a mail-order
transaction shall contain the current seller's valid Michigan sales
tax registration number, business name and address of the seller,
and a statement as to whether all sales taxes and taxes levied
under
this act have been paid. All packages of cigarettes tobacco
products
shipped from a cigarette tobacco product seller to
purchasers who reside in Michigan shall clearly print or stamp the
package
with the word "CIGARETTES" "TOBACCO PRODUCTS" on
the
outside of all sides of the package so it is clearly visible to the
shipper. In addition, the package shall contain an externally
visible and clearly legible notice located on the same side of the
package as the address to which the package is delivered, as
follows:
"IF
THESE CIGARETTES TOBACCO
PRODUCTS HAVE BEEN SHIPPED TO YOU
FROM A SELLER LOCATED OUTSIDE OF THE STATE IN WHICH YOU RESIDE, THE
SELLER
HAS REPORTED UNDER FEDERAL LAW THE SALE OF THESE CIGARETTES
TOBACCO PRODUCTS TO OUR STATE TAX COLLECTION AGENCY, INCLUDING YOUR
NAME AND ADDRESS. YOU ARE LEGALLY RESPONSIBLE FOR ALL APPLICABLE
UNPAID
STATE TAXES ON THESE CIGARETTES."TOBACCO PRODUCTS."
If an order is made as a result of advertisement over the
Internet, the tobacco retailer shall request the electronic mail
address of the purchaser and shall receive payment by credit card
or check before shipping. This subsection and subsection (2) do not
apply to sales by wholesalers and unclassified acquirers.
(4)
The deliverer of the cigarettes tobacco
products is
required to obtain proof from a valid government-issued document
that
the person signing for the cigarettes tobacco products is the
purchaser.
(5) Beginning November 1, 2012, a retailer that is not
licensed as an unclassified acquirer, retail importer of tobacco
products other than cigarettes, shall post a sign, visible to the
public inside the retail establishment that informs purchasers of
cigars through catalog sales or Internet sales of their
responsibility to pay all applicable unpaid state taxes on those
cigars.
(6) As used in this section:
(a) "Computer" means any connected, directly interoperable or
interactive device, equipment, or facility that uses a computer
program or other instructions to perform specific operations,
including logical, arithmetic, or memory functions with or on
computer data or a computer program, and that can store, retrieve,
alter, or communicate the results of the operations to a person,
computer program, computer, computer system, or computer network.
(b) "Computer network" means the interconnection of hardwire
or wireless communication lines with a computer through remote
terminals or a complex consisting of 2 or more interconnected
computers.
(c) "Computer program" means a series of internal or external
instructions communicated in a form acceptable to a computer that
directs the functioning of a computer, computer system, or computer
network in a manner designed to provide or produce products or
results from the computer, computer system, or computer network.
(d) "Computer system" means related, connected or unconnected,
computer equipment, devices, software, or hardware.
(e) "Credit card" means a card or device issued by a person
licensed under 1984 PA 379, MCL 493.101 to 493.114, or under the
consumer financial services act, 1988 PA 161, MCL 487.2051 to
487.2072, or issued by a depository financial institution as
defined in section 1a of the mortgage brokers, lenders, and
services licensing act, 1987 PA 173, MCL 445.1651a, under a credit
card arrangement.
(f) "Device" includes, but is not limited to, an electronic,
magnetic, electrochemical, biochemical, hydraulic, optical, or
organic object that performs input, output, or storage functions by
the manipulation of electronic, magnetic, or other impulses.
(g) "Internet" means the connection to the World Wide Web
through the use of a computer, a computer network, or a computer
system.
(h) "Sale conducted through the Internet" means a sale of, a
solicitation to sell, a purchase of, or an offer to purchase
cigarettes
tobacco products conducted all or in part by accessing
an Internet website.
Sec. 12. (1) The proceeds derived from the payment of taxes,
fees, and penalties provided for under this act and the license
fees received by the department shall be deposited with the state
treasurer and disbursed only as provided in this section and
section 7(5). However, before a distribution of funds is made under
this section, subject to appropriation, the funds described in this
section may be used by the department, the attorney general, and
the department of state police for enforcement and administration
of this act.
(2) The tax imposed under section 7(1)(a) shall be disbursed
as follows:
(a) 94% of the proceeds shall be credited to the state school
aid fund established by section 11 of article IX of the state
constitution of 1963.
(b)
6% of the proceeds shall be credited to the healthy
Healthy Michigan fund created under section 5953 of the public
health code, 1978 PA 368, MCL 333.5953. Fifty percent of the
proceeds described in this subdivision that are used for smoking
prevention
programs shall be used by the department of community
health and human services to expand the free smokers quit kit
program to include the nicotine patch or nicotine gum.
(3) The tax imposed on cigarettes under section 7(1)(b) shall
be disbursed as follows:
(a) Beginning May 1, 1994 and through June 30, 2004, 5.3% of
the proceeds shall be credited to the health and safety fund
created in the health and safety fund act, 1987 PA 264, MCL 141.471
to 141.479.
(b) Beginning July 1, 2004, 6.5% of the proceeds shall be
credited to the health and safety fund created in the health and
safety fund act, 1987 PA 264, MCL 141.471 to 141.479.
(c) Through June 30, 2004, 25.3% of the proceeds shall be
credited to the general fund of this state.
(d) Beginning July 1, 2004 and through September 30, 2014,
24.1% of the proceeds shall be credited to the general fund of this
state.
(e) 63.4% of the proceeds shall be credited to the state
school aid fund established by section 11 of article IX of the
state constitution of 1963.
(f) 6% of the proceeds shall be credited to the healthy
Michigan fund created under section 5953 of the public health code,
1978 PA 368, MCL 333.5953. Fifty percent of the proceeds described
in this subdivision that are used for smoking prevention programs
shall
be used by the department of community health and human
services to expand the free smokers quit kit program to include the
nicotine patch or nicotine gum.
(g) Beginning October 1, 2014, 24.1% of the proceeds shall be
disbursed as follows:
(i) For the 2014-2015 fiscal year and each subsequent fiscal
year, $3,000,000.00 to the Michigan state capitol historic site
fund created in section 7 of the Michigan state capitol historic
site act, 2013 PA 240, MCL 4.1947. For the 2015-2016 fiscal year
and each subsequent fiscal year, the state treasurer shall adjust
the figure described in this subparagraph by an amount determined
by the state treasurer at the end of each calendar year to reflect
the cumulative annual percentage change in the consumer price
index. As used in this subsection, "consumer price index" means the
most comprehensive index of consumer prices available for this
state
from the bureau of labor statistics Bureau of Labor
Statistics
of the United States department of
labor. Department of
Labor. From the funds described in this subparagraph, not later
than February 1 of each year, the Michigan state capitol commission
created in section 5 of the Michigan state capitol historic site
act, 2013 PA 240, MCL 4.1945, shall report to the Michigan capitol
committee created in section 701 of the legislative council act,
1986 PA 268, MCL 4.1701, and to the chairpersons of the house and
senate appropriations committees. The report shall contain all of
the following:
(A)
The proposed maintenance plan for the Michigan state
capitol
historic site State Capitol
Historic Site for the
immediately following fiscal year.
(B) The projected 5-year maintenance plan for the Michigan
state
capitol historic site State
Capitol Historic Site for the
immediately following 5 fiscal years.
(C)
Projected large-scale projects for the Michigan state
capitol
historic site State Capitol
Historic Site that exceed
$1,000,000.00.
(ii) The remaining proceeds shall be credited to the general
fund of this state.
(4) Beginning August 1, 2002, the tax imposed on cigarettes
under section 7(1)(c) shall be disbursed as follows:
(a) Through June 30, 2004, 74.2%, and beginning July 1, 2004,
9.0% of the proceeds shall be credited to the general fund of this
state.
(b) Through June 30, 2004, 4.6%, and beginning July 1, 2004,
56.3% of the proceeds shall be credited to the state school aid
fund established by section 11 of article IX of the state
constitution of 1963.
(c)
6.0% of the proceeds shall be credited to the healthy
Healthy Michigan fund created under section 5953 of the public
health code, 1978 PA 368, MCL 333.5953. Fifty percent of the
proceeds described in this subdivision that are used for smoking
prevention
programs shall be used by the department of community
health and human services to expand the free smokers quit kit
program to include the nicotine patch or nicotine gum.
(d) Through June 30, 2004, 3.0%, and beginning July 1, 2004,
3.7% of the proceeds shall be paid to counties with a 2000
population of more than 2,000,000, to be used only for indigent
health care.
(e) Through June 30, 2004, 12.2%, and beginning July 1, 2004,
25.0%
of the proceeds shall be credited to the medicaid Medicaid
benefits trust fund created under section 5 of the Michigan trust
fund act, 2000 PA 489, MCL 12.255.
(5) Beginning August 1, 2002, the tax imposed under section
7(1)(f) shall be disbursed as follows:
(a) 75.6% of the proceeds shall be credited to the state
school aid fund established by section 11 of article IX of the
state constitution of 1963.
(b)
6.0% of the proceeds shall be credited to the healthy
Healthy Michigan fund created under section 5953 of the public
health code, 1978 PA 368, MCL 333.5953. Fifty percent of the
proceeds described in this subdivision that are used for smoking
prevention
programs shall be used by the department of community
health and human services to expand the free smokers quit kit
program to include the nicotine patch or nicotine gum.
(c) 18.4% of the proceeds shall be credited to the general
fund of this state.
(6) Beginning August 1, 2002, the tax imposed on cigarettes
under section 7(1)(d) shall be disbursed as follows:
(a) 94.0% of the proceeds shall be credited to the state
school aid fund established by section 11 of article IX of the
state constitution of 1963.
(b)
6.0% of the proceeds shall be credited to the healthy
Healthy Michigan fund created under section 5953 of the public
health code, 1978 PA 368, MCL 333.5953. Fifty percent of the
proceeds described in this subdivision that are used for smoking
prevention
programs shall be used by the department of community
health and human services to expand the free smokers quit kit
program to include the nicotine patch or nicotine gum.
(7) Beginning July 1, 2004, the tax imposed on cigarettes
under section 7(1)(e) shall be disbursed as follows:
(a) Beginning July 1, 2004 and through September 30, 2005,
100%
of the proceeds shall be credited to the Michigan medicaid
Medicaid benefits trust fund created under section 5 of the
Michigan trust fund act, 2000 PA 489, MCL 12.255.
(b) Beginning October 1, 2005, 75.0% of the proceeds shall be
credited
to the medicaid Medicaid benefits trust fund created under
section 5 of the Michigan trust fund act, 2000 PA 489, MCL 12.255.
(c) Beginning October 1, 2005, 25.0% of the proceeds shall be
credited to the general fund of this state.
(8) Beginning July 1, 2004, the tax imposed under section
7(1)(g) shall be disbursed as follows:
(a) Beginning July 1, 2004 and through September 30, 2005,
100%
of the proceeds shall be credited to the Michigan medicaid
Medicaid benefits trust fund created under section 5 of the
Michigan trust fund act, 2000 PA 489, MCL 12.255.
(b) Beginning October 1, 2005, 75.0% of the proceeds shall be
credited
to the medicaid Medicaid benefits trust fund created under
section 5 of the Michigan trust fund act, 2000 PA 489, MCL 12.255.
(c) Beginning October 1, 2005, 25.0% of the proceeds shall be
credited to the general fund of this state.
(9) Beginning October 1, 2016, the tax imposed under section
7(1)(h) shall be disbursed as follows in the following order of
priority:
(a) Beginning October 1, 2016, except as otherwise provided in
this subdivision, the first $3,000,000.00 of the proceeds shall be
credited to the first responder presumed coverage fund created in
section 405 of the worker's disability compensation act of 1969,
1969 PA 317, MCL 418.405. However, if the balance of the first
responder presumed coverage fund falls below $1,500,000.00 at any
time during the fiscal year, then an additional amount so that the
balance of the first responder presumed coverage fund is not less
than $3,000,000.00 shall be disbursed.
(b) Beginning October 1, 2016, 18% of the proceeds shall be
used by the department of health and human services for the smoking
prevention program.
(c) Beginning October 1, 2016, the balance of the proceeds
shall be credited to a restricted account created by the department
of health and human services and used only for the state match for
the Healthy Michigan plan operated by the department of health and
human services.
(10) (9)
The proceeds of the fees and
penalties provided for
in this act shall be used for the administration of this act.