HB224 By Representative McMillan RFD Ways and Means General Fund Rd 1 10-MAR-15

SYNOPSIS: Under existing law, there is no tobacco tax on consumable vapor products. These products are taxed at the general sales tax rate.

This bill would tax consumable vapor products and provide for the stamping of such.

A BILL TO BE ENTITLED AN ACT

To amend Section 40-25-1, 40-25-2, 40-25-4, 40-25-4.1, 40-25-5, 40-25-6, 40-25-7, 40-25-8, 40-25-9, 40-25-11, 40-25-12, 40-25-13, 40-25-14, 40-25-15, 40-25-16.1, 40-25-18, 40-25-19, 40-25-20, 40-25-23, 40-25-40, 40-25-41, 40-25-42, and 40-25-46 related to the taxation of tobacco to include consumable vapor products.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 40-25-1, 40-25-2, 40-25-4, 40-25-4.1, 40-25-5, 40-25-6, 40-25-7, 40-25-8, 40-25-9, 40-25-11, 40-25-12, 40-25-13, 40-25-14, 40-25-15, 40-25-16.1, 40-25-18, 40-25-19, 40-25-20, 40-25-23, 40-25-40, 40-25-41, 40-25-42, and 40-25-46 of the Code of Alabama, 1975, are amended to read as follows:

§40-25-1.

"For the purposes of this article, the following terms shall have the respective meanings ascribed by this section:

"(1) WHOLESALE DEALER AND JOBBER. Persons, firms, or corporations who sell at wholesale only, any one or more of the articles taxed herein to licensed retail dealers for the purpose of resale only.

"(2) RETAIL DEALER. Every person, firm, or corporation, other than a wholesale dealer, who shall sell or offer for sale any one or more of the articles taxed herein, irrespective of quantity or amount, or the number of sales; and all persons operating under a retail dealer's license.

"(3) STAMPS. The stamp or stamps by the use of which the tax levied under this article is paid and shall be designated Alabama Revenue Stamps.

"(4) VAPOR PRODUCT. Any nonlighted, noncombustible product that employs a mechanical heating element, battery, or electronic circuit regardless of shape or size and that can be used to produce vapor from nicotine in a solution. The term includes any vapor cartridge or other container of nicotine in a solution or other form that is intended to be used with or in an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device. The term does not include any product regulated by the United States Food and Drug Administration under Chapter V of the federal Food, Drug, and Cosmetic Act.

"(5) CONSUMABLE VAPOR PRODUCT. Any nicotine liquid solution or other material containing nicotine that is depleted as a vapor product is used.

§40-25-2.

"(a) In addition to all other taxes of every kind now imposed by law, every person, firm, corporation, club, or association, within the State of Alabama, who sells or stores or receives for the purpose of distribution to any person, firm, corporation, club, or association within the State of Alabama, cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, snuff, consumable vapor product, or any substitute therefor, either or all, shall pay to the State of Alabama for state purposes only a license or privilege tax which shall be measured by and graduated in accordance with the volume of sales of such person, firm, corporation, club, or association in Alabama. There is hereby levied license or privilege taxes on articles containing tobacco enumerated in this article in the following amounts:

"(1) LITTLE CIGARS. Upon cigars of all descriptions made of tobacco, or any substitute therefor, and weighing not more than three pounds per 1,000, $.04 for each ten cigars, or fractional part thereof.

"(2) CHEROOTS, STOGIES, CIGARS, ETC. Upon cigars of all descriptions made of tobacco, or any substitute therefor, retailing for three and one-third cents each or less, $3 per 1,000.

"(3) CIGARS. Upon cigars of all descriptions made of tobacco, or any substitute therefor, retailing for more than three and one-third cents each and not more than $.05 each, $6 per 1,000.

"(4) CIGARS. Upon cigars of all descriptions made of tobacco, or any substitute therefor, retailing for more than $.05 each and not exceeding $.08 each, $9 per 1,000.

"(5) CIGARS. Upon cigars of all descriptions made of tobacco, or any substitute therefor, retailing for more than $.08 each and not exceeding $.10 each, $15 per 1,000.

"(6) CIGARS. Upon cigars of all descriptions made of tobacco, or any substitute therefor, retailing for more than $.10 each and not exceeding $.20 each, $30 per 1,000.

"(7) CIGARS. Upon cigars of all descriptions made of tobacco, or any substitute therefor, retailing for more than $.20 each, $40.50 per 1,000.

"(8) CIGARETTES. Upon all cigarettes made of tobacco, or any substitute therefor, 21.25 mills on each such cigarette.

"(9) SMOKING TOBACCO. Upon all smoking tobacco, including granulated, plug cut, crimp cut, ready rubbed, and other kinds and forms of tobacco prepared in such manner as to be suitable for smoking in a pipe or cigarette, upon each package: Weighing not more than one and one-eighth ounces, tax $.04; over one and one-eighth ounces, not exceeding two ounces, tax $.10; over two ounces, not exceeding three ounces, tax $.16; over three ounces, not exceeding four ounces, tax $.21; $.06 additional tax for each ounce or fractional part thereof over four ounces.

"(10) CHEWING TOBACCO. Upon all chewing tobacco prepared in such manner as to be suitable for chewing only and not suitable for smoking as described and taxed in subdivision (9) of this subsection: $.015 per ounce or fractional part thereof.

"(11) SNUFF. Upon each can or package of snuff weighing not more than five-eighths ounces, one cent tax; over five-eighths ounces and not exceeding one and five-eighths ounces, $.02 tax; over one and five-eighths ounces and not exceeding two and one-half ounces, $.04 tax; over two and one-half ounces and not exceeding five ounces (cans, packages, gullets), $.06 tax; over three ounces and not exceeding five ounces (glasses, tumblers, bottles), seven cents tax; over five ounces and not exceeding six ounces, $.08 tax; weighing over six ounces, an additional $.12 for each ounce or fractional part thereof.

"(12) VAPOR PRODUCT. Upon each fluid millimeter of consumable vapor product, $.25 tax. All invoices for vapor products issued by manufacturers must state the amount of consumable product in milliliters.

"(b) Whenever in this article reference is made to any manufactured tobacco products, manufactured or imported to sell at a certain price, as the basis for computing the tax, it is intended to mean the ordinary, customary, or usual price paid by the consumer for such tobacco or consumable vapor products taxable under this article.

"(c) Whenever in this article reference is made to any manufactured tobacco or consumable vapor products on which the tax is based on weight, the weight as shown by the manufacturer or the federal internal revenue stamp shall apply.

"(d) When the retail or selling price is referred to in this article as the basis for computing the amount of stamps required on any article, it is intended to mean the retail or selling price of the articles before adding the amount of the tax.

"(e) When any articles or commodities subject to tax in this article are given as prizes on punch boards, shooting galleries, premiums, etc., the tax shall be based on the ordinary retail selling price of such articles.

"(f) The tax herein levied shall be paid to the state through the use of stamps as herein provided. However, every wholesaler, distributor, jobber, or retail dealer shall add the amount of the tax levied herein to the price of the tobacco or tobacco or consumable vapor products sold, it being the purpose and intent of this provision that the tax levied is in fact a levy on the ultimate consumer or user with the wholesaler, distributor, jobber, or retail dealer acting merely as an agent of the state for the collection and payment of the tax to the state. Therefore, notwithstanding any exemptions from taxes which any such seller may now or hereafter enjoy under the Constitution or laws of this or any other state, or of the United States, he shall collect the tax imposed hereunder from the purchaser or consumer, and the amount of the tax shall constitute a debt from the purchaser or consumer to the seller until paid. It shall be unlawful for any person, firm, corporation, association, or copartnership to fail or refuse to add to the sales price and collect from the purchaser the amount of the tax to be added to the sales price and collected from the purchaser hereunder. Stamps in denominations to the amount of the tax or in denominations specified pursuant to subsection (g) of this section shall be affixed to the box or other container from or in which tobacco or consumable vapor products taxed by this section are normally sold at retail. The stamps shall be affixed in such a manner that their removal will require continued application of water or steam; and in case of cigars, cheroots, chewing tobacco and like manufactured tobacco products, where sales are made from the original container, the stamps shall be affixed to the box or container in such a way that the stamps shall be torn in two or mutilated when such containers or boxes are opened for the sale of the tobacco products. In the case of cigarettes, smoking tobacco, snuff, or consumable vapor product and like products sold at retail in packages, the required amount of stamps to cover the tax shall be affixed to each individual package or container. All taxable tobaccos or consumable vapors herein enumerated, when offered for sale, either at wholesale or retail, without having stamps affixed in the manner set out by this article, shall be subject to confiscation, in the manner provided for contraband goods as set out in this article.

"(g) The Commissioner of Revenue shall prepare and issue stamps in denominations for the amount of the tax imposed by this article provided that if the commissioner determines that it is not economical for the state to have a stamp prepared and issued for one or more particular types of packages of tobacco or consumable vapor products, then he may by regulation prescribe the use of a stamp in a denomination other than for the amount of the tax imposed with the difference between the amount of tax actually imposed and the amount of tax denominated by the stamp paid with the use of a monthly report; or he may require a monthly report without use of a stamp to report the amount of taxes due.

"(h) The increases levied by this section shall be exclusive and shall be in lieu of any other or additional local taxes and/or license fees, county or municipal, imposed on the sale or use of cigarettes and/or other tobacco or consumable vapor products. Notwithstanding the foregoing, an act of the Legislature or an ordinance or resolution by a taxing authority passed or enacted on or before May 18, 2004, imposing a local tax and/or license fee shall remain operative, but no additional local tax and/or license fee may thereafter be levied on the sale of cigarettes and/or other tobacco products.

"(i) Local taxes and/or license fees, county or municipal, imposed on the sale or use of cigarettes shall be paid to the local government through the use of stamps affixed to the product as provided herein for the state tax. Provided, however, this requirement shall not be interpreted to require the Department of Revenue to prepare all stamps or to collect all local taxes. Local governments may contract with another entity to collect their local cigarette tax but all local taxes must be collected as provided herein.

§40-25-4.

"The license taxes imposed by this article shall be paid by affixing stamps in the manner and at the time herein set forth. In the case of cigars, stogies, cheroots, chewing tobacco, and like products, the stamps shall be affixed to the box or container in which or from which normally sold at retail. In the case of cigarettes, smoking tobacco, and snuff and consumable vapor products, the stamps shall be affixed to each individual package. Time allowed for affixing stamps shall be as follows: Every wholesale or retail dealer in this state, except wholesalers who are issued a permit by the Department of Revenue, shall immediately after receipt of any unstamped cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, or snuff, or consumable vapor products unless sooner offered for sale, cause the same to have the requisite denominations and amount of stamp or stamps to represent the tax affixed as stated herein, and to cause same to be cancelled by writing or stamping across the face of each stamp the registered number of such wholesaler or retailer, which shall be furnished by the Department of Revenue. The stamping of the cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, and snuff and consumable vapor products shall actually begin within one hour after receipt of the cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, and snuff and consumable vapor products in the premises of the wholesale or retail dealer, except wholesalers who are issued a permit by the Department of Revenue, and the stamping shall be continued with reasonable diligence by the wholesale or retail dealer until all of the unstamped cigars, stogies, cheroots, chewing tobacco, cigarettes, smoking tobacco, and snuff and consumable vapor products have been stamped and the stamps cancelled as provided by law. Wholesalers who have been issued a permit by the department shall affix the required stamps prior to any sale. Every wholesale dealer shall at the time of shipping or delivering any tobacco or consumable vapor products as enumerated herein make a true duplicate invoice of the same which shall show full and complete details of the sale or delivery of the taxable article, and shall retain the same subject to the use and inspection of the Department of Revenue, or its duly authorized agents for a period of three years. Wholesale and retail dealers shall also keep a record of purchases of all tobacco and consumable vapor products enumerated and defined in this article and hold all books, records, and memoranda pertaining to the purchase and sale of those tobacco and consumable vapor products open to the inspection of the Department of Revenue or its duly authorized agents at any and all times. Every wholesale dealer shall furnish to the Department of Revenue a monthly report, between the first and twentieth of each month for the preceding month, of all orders for tobacco and consumable vapor products purchased through the wholesale dealer from without this state on a drop shipment and consigned direct to the person, firm, corporation, or association of persons ordering the tobacco and consumable vapor products from without this state through the wholesale dealer. If, upon examination of invoices of any tobacco and consumable vapor product sold by a wholesaler or purchased or received, or both, by a retail dealer, he or she is unable to furnish evidence to the Department of Revenue of sufficient stamp purchases to cover the unstamped tobaccos or consumable vapors purchased, the prima facie presumption shall arise that the tobacco or consumable vapor products were sold without the proper stamps affixed thereto. Any wholesaler or retailer who fails or refuses to comply with any or all of the above provisions shall be deemed a violator of this section and, upon conviction, punished by a fine of not less than $500 nor more than $1,000, or imprisonment in the county jail for a period of six months, either or both, at the discretion of the court.

§40-25-4.1.

"(a) Notwithstanding any other laws, the only persons or businesses who may be licensed to buy and affix the tax stamps of the Alabama Department of Revenue required by law to packages of tobacco or consumable vapor products are wholesalers and distributors who buy the tobacco or consumable vapor products direct from the manufacturer, or an affiliate of the manufacturer, except that the manufacturer of the product may be allowed to affix the stamps to a tobacco or consumable vapor product for the following purposes:

"(1) Trademark registration.

"(2) Promotions of the product.

"(3) Test-marketing the product.

"(b) In order for a manufacturer to affix tax stamps to a tobacco or consumable vapor product for a purpose described in subsection (a), the manufacturer shall give at least four weeks written notice to the Commissioner of the Department of Revenue of such intention along with full details of the exceptional event, including, but not limited to:

"(1) The nature of the promotion.

"(2) The location and length of the promotion.

"(3) The estimated number of tobacco or consumable vapor products to be offered for sale during the promotion.

"(c) The Department of Revenue shall notify all self-administered counties and municipalities of the manufacturer's request within seven days of receiving notice from the manufacturer by forwarding to each self-administered county and municipality a copy of the written notice, including the full details of the exceptional event as set out above.

"(d) Any person who violates this section shall be guilty of a Class A misdemeanor and, upon conviction thereof, shall be punished as prescribed by law.

§40-25-5.

"The Department of Revenue is hereby authorized and directed to have prepared and distributed stamps suitable for denoting the tax on all articles enumerated herein. Any person, firm, corporation, or association of persons, other than the Department of Revenue, who sells tobacco or consumable vapor products tax stamps not affixed to tobacco or consumable vapor products sold and delivered by them, whether the said stamps be genuine or counterfeit, shall be guilty of a felony and punishable as set out in Section 40-25-6. When wholesalers or jobbers have qualified as such with the Department of Revenue, as provided in Section 40-25-16, and desire to purchase stamps as prescribed herein for use on taxable tobaccos sold and delivered by them, the Department of Revenue shall allow on such sales of tobacco tax stamps a discount of seven and one-half percent on the entire amount of the sale. Where wholesalers or jobbers are entitled to purchase stamps at a discount as herein provided, instead of the Department of Revenue selling such stamps to such jobbers or wholesalers for cash, it may consign such stamps, if and when such wholesaler or jobber shall give to the Department of Revenue a good and sufficient bond executed by some surety company authorized to do business in this state, conditioned to secure the payment for the stamps so consigned when and as they are used on manufactured tobacco or consumable vapor products by such wholesaler or jobber. Every wholesaler or jobber purchasing stamps on consignment as described herein, shall be required to make a full and complete accounting and remittance on or before the twentieth of each month for all stamps used on taxable tobaccos or consumable vapor products during the preceding month. Every wholesaler or jobber refusing or failing to comply with this section shall forfeit the commission or discount on stamps used which he failed or refused to account or remit for in the time allowed, and in addition shall be charged interest on such delinquent amount for each day delinquent at the rate of eight percent per annum.

§40-25-6.

"Whoever removes or otherwise prepares any Alabama Revenue Stamps with intent to use, or cause the same to be used, after it has already been used, or buys, sells, offers for sale or gives away any such washed, removed, or restored stamps to any person for using or who used the same, or has in his possession any washed, restored, removed, or altered stamp which has been removed from the article to which it has been previously affixed, or whoever for the purpose of indicating the payment of any tax hereunder reuses any stamp which has heretofore been used for the purpose of paying any tax provided in this article, or whoever except the Department of Revenue sells any Alabama Revenue Stamps not affixed to taxable tobaccos or consumable vapor products as provided herein, is guilty of a felony and, upon conviction, shall be punished by imprisonment in the penitentiary for not less than a year and a day, nor more than five years, and in addition may be fined not less than $1,000 nor more than $5,000.

"Whoever manufactures, buys, sells, offers for sale or has in his or its possession any reproduction or counterfeit of the Alabama Revenue Stamps provided for in this article is guilty of a felony and, upon conviction, shall be punished by imprisonment in the penitentiary for not less than a year and a day, nor more than 10 years, and in addition, may be fined not less than $2,000 nor more than $10,000.

§40-25-7.

"Any retail dealer or semijobber of tobacco or consumable vapor products enumerated and defined in this article purchasing, or receiving such commodities from without the state, whether the same shall have been ordered or purchased through a wholesaler or jobber in this state, or by drop shipment or otherwise, shall within 12 hours of receipt of such tobacco products, mail by certified or registered mail a true duplicate invoice of all such purchases or receipts to the Department of Revenue at Montgomery, Alabama, said invoice carrying the name of the person or firm from whom or through whom such purchases or shipments of the tobacco or consumable vapor products so received, showing kinds and quantities. Any retail dealer or semijobber failing or refusing to furnish duplicate invoices, in both the manner and time allowed, shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not less than $50 for each offense, or imprisonment in the county jail for a period not exceeding 60 days.

§40-25-8.

"Any cigarettes, smoking tobacco, cigars, stogies, cheroots, chewing tobacco, snuff, or consumable vapor products, or other products taxable under this article found at any point within the State of Alabama, which the cigarettes, smoking tobacco, cigars, stogies, cheroots, chewing tobacco, snuff, or consumable vapor products, or other products taxable under this article shall have been within the State of Alabama for a period of two hours, or longer, in possession of any retailer or semijobber not having affixed to the package the stamps as provided in this article, are declared to be contraband goods and may be seized by the Department of Revenue, or its agents or by any peace officer of the State of Alabama, without a warrant and the goods shall be delivered to the Department of Revenue for sale at public auction to the highest bidder after due advertisement. The Department of Revenue before delivering any of the goods so seized shall require the purchaser to affix the proper amount of stamps to the individual package as above defined. The proceeds of sale for any goods sold hereunder shall be turned over to the Treasurer by the Department of Revenue as other funds collected by the department. The cost of confiscation and sale shall be paid out of the proceeds derived from the sale before making remittance to the Treasurer. Any of the goods, wares, or merchandise when offered for sale, either at wholesale or retail without the stamps having been first affixed, shall be subject to confiscation as hereinabove provided. Any vehicle, not a common carrier, used for the transportation for the purpose of sale of unstamped articles as hereinabove enumerated shall likewise be subject to confiscation and sale in the same manner as above provided for unstamped goods, wares, or merchandise. Should any unstamped tobaccos or consumable vapor products be found in any vehicle which is engaged in the sale, distribution, or delivery of taxable tobaccos, or consumable vapor products the same shall be prima facie evidence that it was there for sale.

§40-25-9.

"In all cases of seizure of any goods, wares, merchandise or other property hereafter made as being subject to forfeiture under provisions of this article which in the opinion of the officer, or person making the seizure, are of the appraised value of $50 or more, the said officer or person shall proceed as follows:

"(1) He shall cause a list containing a particular description of the goods, wares, merchandise or other property seized to be prepared in duplicate and an appraisement thereof to be made by three sworn appraisers to be selected by him, who shall be respectable and disinterested citizens of the State of Alabama, residing within the county wherein the seizure was made. Said list and appraisement shall be properly attested by said officer, or person, and the said appraisers, for which service each of said appraisers shall be allowed the sum of $1 per day, not exceeding two days, to be paid by the Department of Revenue out of any revenue received by it from the sale of the confiscated goods or the compromise which may be effected.

"(2) If the said goods are believed by the officer making the seizure to be of value of less than $50, no appraisement shall be made. The said officer, or person, shall proceed to post a notice for three weeks, in writing at three places in the county where the seizure was made, describing the articles and stating the time and place and cause of their seizure and requiring any person claiming them to appear and make such claim in writing within 30 days from the date of the first posting of such notice.

"(3) Any person claiming the said goods, wares or merchandise or other property so seized as contraband within the time specified in the notice may file with the Department of Revenue a claim in writing, stating his interest in the articles seized and may execute a bond to the Department of Revenue in a penal sum equal to double the value of said goods so seized, but in no case shall said bond be less than the sum of $200, with sureties to be approved by the clerk of the circuit court in the county in which the goods are seized, conditioned that in the case of condemnation of the articles so seized, the obligors shall pay to the Department of Revenue the full value of the goods so seized and all costs and expenses of the proceedings to obtain such condemnation, including a reasonable attorney's fee. And upon the delivery of such bond to the Department of Revenue, it shall transmit the same with the duplicate list or description of the goods seized to the district attorney of the circuit in which such seizure was made, and the said district attorney shall file a complaint in the circuit court of the county where the seizure was made to secure the forfeiture of said goods, wares, merchandise or other property. Upon the filing of the bond aforesaid the said goods shall be delivered to the claimant pending the outcome of said case; provided, that said goods must have the proper stamps affixed to each such article of tobacco or consumable vapor product before turning same over to claimant, the stamps so affixed to be paid for by claimant when goods properly stamped are delivered by the Department of Revenue.

"(4) If no claim is interposed and no bond given within the time above specified, such goods, wares, merchandise or other property shall be forfeited without further proceedings and the same shall be sold as herein provided. The proceeds of sale when received by the Department of Revenue shall be turned in to the Treasury as other revenues are required by law to be turned in. In seizure in quantities of less value than $50, the same may be advertised with other quantities at Montgomery, Alabama, by the Department of Revenue and disposed of as hereinabove provided. The proceedings against goods, merchandise or other property pursuant to the provisions of this article shall be considered as proceedings in rem unless otherwise provided. Should the Department of Revenue have to resort to the courts for collection of the tax due and assessed, no advertisement shall be made and the confiscated tobaccos may be held as evidence pending the results of court action.

§40-25-11.

"All common carriers, contract carriers, buses and trucks transporting tobacco or consumable vapor products may be required under regulations to be prescribed by the Department of Revenue to transmit to the Department of Revenue a periodic statement of such consignments or deliveries of tobacco or consumable vapor products showing date, point of origin, point of delivery and to whom delivered, and time of delivery, and all common carriers, buses or trucks shall permit examination by the Department of Revenue or its agents of their records relating to shipment or receipt of tobacco or consumable vapor products. The common carriers, buses and trucks shall permit the examination and investigation of their records of shipment or receipts relating to tobacco or consumable vapor products, when and wherever it is deemed advisable and necessary by the Department of Revenue or its agents in the enforcement of this article. Inspectors, stamp deputies and other duly authorized agents of the Department of Revenue, on proper identification from and authorization by the Department of Revenue, shall make such examination. Any person, firm, corporation, partnership or association of persons who refuses to transmit to the Department of Revenue the statements hereinabove provided for, or who refuses to permit the examination of his records by the Department of Revenue or its duly authorized agent, shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not less than $100 nor more than $500 for each such offense.

§40-25-12.

"It shall be provided by regulations of the Department of Revenue the methods of breaking packages, forms and kinds of containers and methods of affixing stamps that shall be employed by persons, firms or corporations subject to the tax imposed by this article which will make possible the enforcement of payment by inspection and any person, firm or corporation subject to this tax, engaging in or permitting such practices as are prohibited by regulations of the Department of Revenue or in any other practice which makes it difficult to enforce the provisions of this article by inspection, or if any person, firm, or corporation, agent or officer thereof, who shall upon demand of the Department of Revenue, any officer or agent of the Department of Revenue, refuses to allow full inspection of the premises or any part thereof, or who shall hinder or in anywise delay or prevent such inspection when demand is made therefor, or in any way interferes with any agent of the Department of Revenue in the performance of his duties in enforcing this article, confiscation of tobaccos or consumable vapor products deemed by agent of the Department of Revenue to be contraband is hereby declared to be one of the duties of an agent of the Department of Revenue, shall be deemed to be guilty of a misdemeanor and shall, upon conviction, be fined not less than $100 nor more than $200 for each offense, or imprisonment in the county jail for a period not exceeding 90 days, or both, in the discretion of the court.

§40-25-13.

"It shall be the duty of every person, firm, corporation, club, or association of persons, receiving, storing, selling, or handling tobacco or consumable vapor products enumerated herein in any manner whatsoever to keep and preserve all invoices, books, papers, cancelled checks, or other memoranda touching the purchase, sale, exchange, or receipt of any and all tobacco or consumable vapor products enumerated herein. All such invoices, books, papers, cancelled checks, or other memoranda shall be subject to audit and inspection by any duly authorized representative of the Department of Revenue at any and all times. Any person, firm, corporation, club, or association of persons who fails or refuses to keep and preserve the records as herein required, or who upon request by a duly authorized agent of the Department of Revenue fails or refuses to allow an audit or inspection of records as hereinabove provided shall be guilty of a misdemeanor and shall upon conviction be punished by a fine of not less than $50 nor more than $200, or imprisonment in the county jail for a period not to exceed 90 days for each offense.

§40-25-14.

"Each and every wholesaler or jobber qualifying as such with the Department of Revenue shall be required to file a report between the first and twentieth of each month, covering the purchase or receipt by them of all tobacco or consumable vapor products enumerated and defined herein during the preceding month. Said report shall give in detail the different kinds and quantities of tobacco or consumable vapor products so purchased or received by them during the preceding month. The Department of Revenue shall furnish any person seeking to bring an action under Section 8-19-10 with information permitting the identification of a distributor which has affixed a stamp to a package of cigarettes in accordance with this section. In addition, between the first and twentieth of each month, each person licensed to affix the state tax stamp to cigarettes shall file with the Department of Revenue, for all cigarettes imported into the United States to which such person has affixed the Alabama revenue stamp in the preceding month, copies of the customs certificates with respect to such cigarettes required to be submitted by 19 U.S.C. §1681a(c). Any wholesaler or jobber failing or refusing to file the above report in the manner and time allowed shall be deemed a violator of this section and upon conviction shall be fined not less than $100 nor more than $500 for each offense.

§40-25-15.

"(a) A wholesaler or jobber, as defined in Section 40-25-1 and who is duly qualified as such wholesaler or jobber under Section 40-25-16, may sell tobacco or consumable vapor products enumerated herein without the Alabama Revenue Stamps affixed thereto; provided, that: Such products are sold and shipped or delivered in interstate commerce to a person outside of this state, and such wholesaler or jobber shall have on file, for a period of three years, subject to inspection by the department, a record of such sale, and also the original purchase order, and a copy of the invoice therefor, and a receipt from a common carrier, contract carrier or post office showing shipment for delivery in such other state, or, if delivered by such dealer to the purchaser at a point outside of the State of Alabama, a receipt showing such delivery in addition to the record, original purchase order and copy of the invoice relating to such sale.

"(b) Such duly qualified wholesaler or jobber may sell tobacco or consumable vapor products enumerated herein without the Alabama Revenue Stamps affixed thereto; provided, that: "(1) Such products are sold to a person who is engaged in business as a dealer in such products in another state, "(2) Such products are purchased exclusively for resale in such other state, and "(3) Such products are at the time of sale properly stamped by the Alabama wholesaler or jobber with revenue stamps authorized and issued by such other state for use upon such tobacco or consumable vapor products, and such wholesaler or jobber shall have on file, for a period of three years, subject to inspection by the department, a record of such sale, the original purchase order and copy of invoice therefor, a receipt from such purchase showing that such purchase was made exclusively for resale in such other state, and a record showing the purchase and use of such revenue stamps of such other state.

"(c) Tobacco or consumable vapor products enumerated herein may be sold by such duly qualified wholesalers or jobbers, without revenue stamps affixed thereto, when sold to the United States or to any instrumentality thereof for resale to or for use or consumption by members of the Armed Services of the United States; provided, that the books and records, including original purchase orders and copy of invoices showing such sales are kept on file for a period of three years, subject to inspection by the department.

"(d) Tobacco or consumable vapor products enumerated herein may be sold by such duly qualified wholesalers or jobbers, without revenue stamps affixed thereto, when sold and delivered to ships regularly engaged in foreign commerce or coastwise shipping between points in this state and points outside of this state for resale to or for use or consumption upon such ship or in foreign commerce.

"(e) The department is authorized to adopt rules and regulations with respect to the enforcement of the provisions of this section, to prevent any evasion of the tax herein imposed.

"(f) A failure to comply with any provision of this section with respect to any sale of unstamped tobacco or consumable vapor products shall subject the wholesaler or jobber to the payment of the tax thereon imposed by this article. Any person, including any firm, corporation or association of persons, who violates any of the provisions of this section shall be guilty of a misdemeanor, and upon conviction shall be punished by a fine of not less than $100 nor more than $500, or by imprisonment in the county jail for a period not to exceed six months, either or both, at the discretion of the court.

§40-25-16.1.

"Each wholesaler, jobber, semijobber, registered retailer, importer or any other person selling, receiving, or distributing tobacco or consumable vapor products in this state for resale shall file a report of its activity with the Department of Revenue between the first and twentieth of each month. The information shall include, but not be limited to, the customer's name, address, invoice number, invoice date, a description of the tobacco or consumable vapor products, the itemized tax, and any other information required by the department.

"No later than December 30, 2014, the commissioner shall establish a web site for listing each wholesaler, jobber, semijobber, retailer, importer, or distributor of tobacco or consumable vapor products that have qualified or registered with the Department of Revenue. Purchases of tobacco or consumable vapor products made from an entity other than the above permitted or registered entities appearing on the department web site listing shall be subject to confiscation, as provided for in this chapter.

§40-25-18.

"(a) Persons failing to properly affix the required stamps to any cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, and snuff, and consumable vapor products shall be required to pay, as part of the tax imposed hereunder, a penalty of not less than twenty-five dollars ($25) nor more than five hundred dollars ($500). Each article or commodity not having proper stamps affixed thereto as herein required shall be deemed a separate offense. Any cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, and snuff, and consumable vapor products in the place of business of any person required by this article to stamp the same shall be prima facie evidence that they are intended for sale. The Department of Revenue, upon good cause shown, may waive or remit any penalty or any part thereof provided for in this section. Any person, firm, corporation, club, or association of persons who has been found guilty of violating this article and who, after being punished by fine, penalty, assessment, or imprisonment, is found guilty of a second or subsequent violation of this article shall have their license, as provided in Sections 40-12-72 and 40-12-73, revoked by the department, and no further license or permit shall be issued or granted to that person, firm, corporation, club, or association of persons for a period of one year from the date their license or permit has been revoked. Notice of the revocation shall be mailed to the probate judge and license inspector of the county in which the revocation was made.

"(b) In addition to the penalty levied by the department pursuant to subsection (a), the county license inspector, license commissioner, revenue commissioner, tax assessor, or tax collector of the county in which the untaxed tobacco or consumable vapor product is located may assess a penalty against any person failing to affix the required stamps to any cigars, cheroots, stogies, cigarettes, smoking tobacco, and snuff and consumable vapor product. The amount of the additional penalty shall be not less than one hundred dollars ($100) nor more than five hundred dollars ($500).

"(c) The department and local taxing official may assess the tax levied by this chapter pursuant to the assessment procedures set out in Chapter 2A of this title.

§40-25-19.

"Each and every person, firm, corporation, club, or association transporting and distributing in any manner whatsoever any tobacco or consumable vapor products as enumerated and defined herein within the State of Alabama who has not a privilege license as prescribed in Sections 40-12-72 and 40-12-73 shall before transporting or distributing any of such tobacco or consumable vapor products as enumerated and defined herein secure a permit from the Department of Revenue. The Department of Revenue shall, before issuing such permit, charge and collect annually a fee of $50 from each such person, firm, corporation, club, or association for transporting or distributing in any manner whatsoever any tobacco or consumable vapor products as enumerated and defined herein. Each person, firm, corporation, club, or association securing a permit as hereinbefore provided for, shall be allowed for each such permit so secured one vehicle for the purpose of transporting or distributing such tobacco or consumable vapor products as enumerated herein, and said permit and fee is required of such person, firm, corporation, club, or association for each vehicle which is so operated. Said permit shall be transferable as to person or vehicle under rules and regulations promulgated by the Department of Revenue. The permit provided herein shall be conspicuously displayed on each vehicle so used or operated. Failure to properly display the permit as hereinbefore required shall be deemed a violation of this section. Any person, firm, corporation, club, or association having been issued a permit who engages in any practices which are deemed by the Department of Revenue to obstruct or prevent in any way the collection of the tax provided herein, may have their permit revoked by the Department of Revenue and no further permit shall be issued for six months and not then unless the Department of Revenue deems it advisable and expedient to do so. Duplicate permit cards will be issued to replace permits lost or damaged upon application and the payment of a fee of $1. Any person, firm, corporation, club, or association found transporting or distributing any tobacco or consumable vapor products defined herein, without first securing a permit as provided above, shall be deemed a violator of this section and upon conviction shall be punishable by a fine of not more than $1,000 for each such offense.

§40-25-20.

"Any person, firm, corporation, club, or association of persons, who shall reuse or refill with any tobacco products enumerated herein any box, package or container from which tobacco or consumable vapor products theretofore tax-paid have been removed, shall be guilty of a misdemeanor and upon conviction shall be fined not less than $100 nor more than $500 or imprisoned not to exceed six months, either or both, at the discretion of the court.

§40-25-23.

"All revenues collected under the provisions of this article, except as otherwise provided, shall be paid to the Department of Revenue by check or draft made payable to the Treasurer of Alabama, and shall be distributed in the following manner:

"(1) All of the revenue derived from the tax levied upon cigarettes by Sections 40-25-2 and 40-25-41 shall be deposited in the State Treasury and 38.82 percent of such revenue shall be divided as follows:

"a. Six and six one-hundredths percent to the credit of the State Public Welfare Trust Fund, which is hereby appropriated for general welfare purposes. In this section, "general welfare purposes" means:

"1. The administration of public assistance as set out in Sections 38-2-5 and 38-4-1;

"2. Services, including supplementation and supplementary services under the federal Social Security Act, to or on behalf of persons to whom such public assistance may be given under Section 38-4-1;

"3. Services to and on behalf of dependent, neglected, or delinquent children; and

"4. Investigative and referral services to and on behalf of needy persons.

"b. Nine and nine one-hundredths percent shall be set apart and used for the following purposes only and in the following order:

"1. So much thereof as may be necessary for such purpose is hereby appropriated and shall be used by the State Treasurer to pay at their respective maturities the principal and interest that will mature during the then current fiscal year on all bonds at the time outstanding that may have been issued by the State Industrial Development Authority under the provisions of the following acts:

"(i) Acts 1967, No. 231;

"(ii) Acts 1971, No. 1420;

"(iii) Acts 1973, No. 1039;

"(iv) Acts 1975, No. 1217;

"(v) Acts 1978, 2nd Ex. Sess., No. 99;

"(vi) Acts 1981, No. 81-843;

"(vii) Acts 1983, No. 83-925; and

"(viii) Acts 1987, No. 87-550.

"2. The balance thereafter remaining during each fiscal year shall be paid into a special fund in the State Treasury to be designated the "General and Mental Health Fund," and is hereby appropriated and shall be distributed as follows:

"(i) Thirty-six percent of the said balance shall be expended by the State Health Officer, with the approval of the state Board of Health, for salaries, other expenses and equipment purchases, incident to general health work;

"(ii) Fifty-eight percent of the said balance shall be paid to the Department of Mental Health created in Chapter 50 of Subtitle 2 of Title 22, to be expended by the said department for such purposes as it may designate for the provision of mental health services; and

"(iii) Six percent of said balance shall be paid to the Alabama Mental Health Board to be expended by said board for such purposes as it may designate for the provision of services to people with an intellectual disability.

"c. Twelve and twelve one-hundredths percent shall be set apart and used for the following purposes only and in the following order:

"1. So much thereof as may be necessary for such purpose is hereby appropriated to the purpose of acquiring and constructing mental health facilities in the state, and to that end shall be used by the State Treasurer to pay, at their respective maturities, the principal and interest that will mature during the then current fiscal year on whichever of the following may be issued:

"(i) Any bonds of the state that may be issued for acquisition and construction of mental health facilities under Amendment 266 of the Constitution of Alabama; or

"(ii) Any bonds that may be issued by the Alabama Mental Health Finance Authority under the provisions of Acts 1988, Act No. 88-475.

"2. The balance thereafter remaining during each fiscal year shall be paid into a special fund in the State Treasury, designated the "General and Mental Health Fund," and is hereby appropriated and shall be distributed as follows:

"(i) Thirty percent of said balance shall be expended by the State Health Officer, with the approval of the state Board of Health, for salaries, other expenses, and equipment purchases incident to general health work; and

"(ii) Seventy percent of the said balance shall be paid to the Department of Mental Health created in Chapter 50 of Subtitle 2 of Title 22, and shall be used by the said department for mental health purposes in the state.

"d. Six and six one-hundredths percent shall be set apart and used for the following purposes only and in the following order:

"1. So much thereof as may be necessary for such purposes is hereby appropriated and shall be used by the State Treasurer to pay, at their respective maturities, the principal and interest that will mature during the then current fiscal year on all bonds that may be issued by the State Parks Development Authority under the provisions of Acts 1967, No. 272, which provided for the creation of said authority and also provided for the submission of a constitutional amendment to authorize the issuance of general obligation bonds by said authority.

"2. The balance thereafter remaining during each fiscal year shall be deposited into a special fund in the State Treasury to be designated the "State Parks Fund" and is hereby appropriated and shall be distributed as follows: Said fund may be expended by the State Director of Conservation at his discretion and with the approval of the Governor for salaries, other expenses, land acquisitions, equipment purchases, capital additions or improvements, or other lawful expenses relating to the state division of parks, monuments, and historical sites.

"e. Sixty-six and sixty-seven one-hundredths percent to the credit of the General Fund.

"(2) The remaining 61.18 percent of the revenue derived from the tax levied on cigarettes by Sections 40-25-2 and 40-25-41 shall be deposited into the State Treasury and allocated as follows:

"a. Up to $2 million received annually shall be allocated to the various counties of the state levying a cigarette tax to offset the administrative expenses of obtaining local stamps to affix to cigarettes sold in their jurisdiction for the purpose of collecting their local cigarette tax and to provide a discount to wholesalers and jobbers for affixing such stamps. These funds shall be distributed by the Comptroller pro rata based on the actual administrative expenses reported to the Comptroller by the counties at the conclusion of each quarter of the fiscal year. The Comptroller shall insure that such funds are distributed as soon as possible following the receipt of such reports. Failure of any county to submit such a report shall not prohibit the Comptroller from distributing funds to the remaining counties.

"b. Remaining revenues to the General Fund to be used for Medicaid services.

"(3) All of the revenue derived from the tax levied by Sections 40-25-2 and 40-25-41 upon tobacco or consumable vapor products other than cigarettes shall be deposited in the State Treasury to the credit of the State General Fund.

§40-25-40.

"For the purpose of this article, the following terms shall have the respective meanings ascribed to them in this section:

"(1) PERSON. Any individual, firm, company, partnership, association, corporation, receiver or trustee, or any other group or combination acting as a unit, and the plural as well as the singular number.

"(2) DEPARTMENT. The Department of Revenue of the State of Alabama.

"(3) COMMISSIONER. The Commissioner of Revenue of the State of Alabama.

"(4) STORAGE. Any keeping or retention in this state for any purpose except sale in the regular course of business or subsequent use solely outside this state of the commodities subject to the provisions of this article.

"(5) USE. The exercise of any right or power over the commodities subject to the provisions of this article, incident to the ownership of those commodities or by any transaction where possession is given; except, that it shall not include the sale of those commodities in the regular course of business.

"(6) IN THIS STATE. Within the exterior limits of the State of Alabama, and includes all territory within such limits owned by or ceded to the United States of America.

"(7) TOBACCO PRODUCT. Cigars, cheroots, stogies, cigarettes, smoking tobacco, chewing tobacco, snuff, consumable vapor product as defined in 40-25-1, or tobacco in any form or condition or any substitute therefor.

"(8) RETAIL SALE or SALE AT RETAIL. All sales except sales by wholesalers to licensed retail dealers or other wholesalers for resale.

"(9) REGISTERED TAXPAYER. Any person who purchases tobacco products subject to the tax imposed by this article and who has been registered by the department as a responsible taxpayer.

§40-25-41.

"An excise tax is hereby imposed on the storage, use or other consumption in this state of tobacco or consumable vapor products purchased at retail in an amount equal to that set out in Section 40-25-2 or to any additional amount or amounts of tobacco sales tax as may be otherwise levied or provided by law.

"Every person storing, using, or otherwise consuming in this state tobacco or consumable vapor products purchased at retail shall be liable for the tax imposed by this article, and the liability shall not be extinguished until the tax has been paid to this state; provided, that if said tobacco or consumable vapor products have attached thereto the stamps provided in said Section 40-25-2 as aforesaid, or as otherwise provided by law, or if said tax imposed by said Section 40-25-2 as aforesaid, or to any additional amount or amounts of tobacco sales tax as may be otherwise levied or provided by law has been paid by the seller of such tobacco products, then the tax imposed by this article shall not be due. Every person who shall purchase tobacco or consumable vapor products subject to the tax imposed by this article shall register with the Department of Revenue as a responsible taxpayer subject to the obligation of maintaining records and making returns, and shall furnish his name and address and the address at which tobacco or consumable vapor products are received if that address is different from his permanent address and shall furnish such other information as the commissioner shall deem appropriate for the administration of this article.

"All tobacco and consumable vapor products subject to the tax imposed by this article and with respect to which the tax has not been paid are declared to be contraband and may be seized without warrant by the commissioner or his agents or employees or by any peace officer of this state, and confiscated as provided in Section 40-25-8, and in such case the tax shall become immediately due; except, that tobacco or consumable vapor products in the possession of a registered taxpayer, as defined in this article, shall not be deemed contraband and subject to seizure and confiscation unless the time for making the report required by Section 40-25-42 has expired.

"Every person subject to the tax imposed by this article who fails to register with the Department of Revenue as a responsible taxpayer; or every person owning or possessing tobacco or consumable vapor products declared to be contraband under this section shall be deemed a violator of this article and may be required to pay a penalty of not less than $25 nor more than $500.

§40-25-42.

"Every person owning or having in his possession or custody tobacco or consumable vapor products, the storage, use or other consumption of which is subject to the tax imposed by this article, shall on or before the tenth day of the month following file with the department a return for the preceding month in such form as may be prescribed by the department showing the tobacco or consumable vapor products purchased by such person, and such other information as the department may deem necessary for the proper administration of this article. The return shall be accompanied by a remittance of the amount of tax herein imposed.

§40-25-46.

"It shall be the duty of every person storing, using or otherwise consuming in this state tobacco or consumable vapor products subject to the provisions of this article to keep and preserve all invoices, books, papers, cancelled checks, or other memoranda touching the purchase, sale, exchange, receipt, ownership, storage, use, or other consumption of such tobacco or consumable vapor products. All such invoices, books, papers, cancelled checks, or other memoranda shall be subject to audit and inspection by any duly authorized representative of the Department of Revenue at any and all reasonable times. Any person who fails or refuses to keep and preserve the records as herein required or who upon request by a duly authorized agent of the Department of Revenue fails or refuses to allow an audit or inspection of the records as herein provided shall be guilty of a misdemeanor and upon conviction therefor be punished as in case of conviction for a misdemeanor."