BILL SUMMARY for HB09-1173
SENATE COMMITTEE ON FINANCE
|Votes: View--> ||Action Taken: |
|Refer House Bill 09-1173 to the Committee on Appro||PASS|
11:36 AM -- House Bill 09-1173
The committee reconvened.
Senator Hodge, prime sponsor, presented House Bill 09-1173. The bill provides methods to reduce the amount of contraband tobacco products in the state through enforcement efforts and the establishment of new civil penalties for the possession of contraband tobacco products. Senator Hodge responded to questions from the committee about the nature of contraband tobacco products. She explained that the tobacco is transported into Colorado from nonlegitmate sellers, and if cigarettes are not stamped by the state, the tax has not been paid. She also responded to questions about the nature of cigarette taxes and whether the problem is growing in Colorado.
The following persons testified on the bill:
11:39 AM -- Mr. Chip Creager, representing Creager Mercantile, testified in support of the bill. He stated that one of the consequences of having a high tax rate on tobacco products is illegal activity. Mr. Creager shared his concerns about the loss of revenue to his business and to the state. He said the bill would level the playing field for legitimate businesses. Mr. Creager responded to questions from the committee about internet sales and retail sales, and provided his concerns about how the state is enforcing the tobacco laws in Colorado.
11:46 AM -- Ms. Mary Szarmach, representing Smoker Friendly /Gasamat, testified in support of the bill. She provided information about the recent increase of the excise tax on tobacco products by the federal government. She stated that the company has recently closed several stores and laid off over 40 workers. Ms. Szarmach provided figures from the Department of Revenue about the amount of tax revenue that Colorado and the federal government has received from cigarette taxes. She responded to questions from the committee about cigarette use, cigarette sales, and the cost of the tax. She also responded to questions about the tax treatment of cigarettes on Indian reservations.
11:57 AM -- Mr. Wilson Croom, representing the Colorado Association of Distributors, testified in support of the bill. He provided background information about what parties are exempt from cigarette sales taxes and the stamps on the carton of cigarettes. The bill, he said, would allow the Department of Revenue to better enforce tobacco laws by requiring retailers to provide invoices illustrating that the cigarette tax was paid. In addition, the bill adds a penalty for retailers that sell cigarettes that do not have a stamp to pay a penalty of $5 per packet, he explained. Mr. Croom said that the money from these penalties would be deposited into a fund for enforcement of tobacco laws. Mr. Croom responded to questions from the committee about contraband products. He also provided the committee with figures about the loss of tax revenue.
12:03 PM -- Mr. Phillip Horwitz, representing the Colorado Department of Revenue, explained the department is in charge of enforcing cigarette taxation, and explained the difference between the tax treatment of cigarettes and other tobacco products. Mr. Horwitz said that cigarettes are stamped, while other tobacco products are taxed at the distributor level. He also provided his concerns about cigarettes sold over the internet from distributors that have not paid the tax. Mr. Horwitz responded to questions from the committee about whether the bill will address enforcement problems.
Senator Sandoval closed public testimony.
|TIME: || 12:10:17 PM|
|MOTION:||Refer House Bill 09-1173 to the Committee on Appropriations. The motion passed 7-0. |
Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS
The committee recessed.