February 17, 2016, Introduced by Senator YOUNG and referred to the Committee on Finance.
A bill to amend 1993 PA 327, entitled
"Tobacco products tax act,"
by amending section 2 (MCL 205.422), as amended by 2012 PA 188.
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) "E-cigarette" means an electronic oral device that meets
all of the following:
(i) Provides a vapor of nicotine.
(ii) Simulates smoking through its use or through inhalation
of the vapor generated by the device.
(iii) Is not approved by the United States Food and Drug
Administration as an aid in quitting the use of tobacco or a
nicotine product.
(iv) Is composed of a heating element, battery, or electronic
circuit.
(i) "E-cigarette cartridge" means a container that meets all
of the following:
(i) Has openings on each end.
(ii) Serves as a liquid reservoir and mouthpiece.
(iii) Allows the passage of liquid to an atomizer and vapor
from the atomizer to the user's mouth.
(iv) Contains liquid for producing vapor in an e-cigarette.
(j) (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.
(k) (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.
(l) (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.
(m) (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.
(n) (l) "Licensee"
means a person licensed under this act.
(o) (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.
(p) (n)
"Noncigarette smoking
tobacco" means tobacco sold in
loose or bulk form that is intended for consumption by smoking and
includes roll-your-own cigarette tobacco.
(q) (o)
"Person" means an
individual, partnership, fiduciary,
association, limited liability company, corporation, or other legal
entity.
(r) (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.
(s) (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.
(t) (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.
(u) (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.
(v) (t)
"Smokeless tobacco" means
snuff, chewing tobacco, and
any other tobacco that is intended to be consumed by means other
than smoking. Beginning October 1, 2016, smokeless tobacco includes
e-cigarettes and e-cigarette cartridges.
(w) (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.
(x) (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.
(y) (w)
"Tobacco product" means
cigarettes, cigars,
noncigarette smoking tobacco, or smokeless tobacco.
(z) (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.
(aa) (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 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.
(bb) (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.
(cc) (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.
(dd) (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.
(ee) (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.