HOUSE DOCKET, NO. 3416        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2436

The Commonwealth of Massachusetts

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PRESENTED BY:

Marjorie C. Decker

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act protecting youth from nicotine addiction.

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PETITION OF:

HOUSE DOCKET, NO. 3416        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2436

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-First General Court
(2019-2020)

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An Act protecting youth from nicotine addiction.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Section 6 of chapter 64C of the General Laws, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-

Every licensee who is required to file a return under section 16 of chapter 62C shall, at the time of filing such return, pay to the commissioner an excise equal to 200 1/2 mills plus any amount by which the federal excise tax on cigarettes is less than 8 mills for each cigarette so sold during the calendar month covered by the return; provided, however, that cigarettes with respect to which the excise under this section has once been imposed and has not been refunded, if paid, shall not be subject upon a subsequent sale to the excise imposed by this section. Each unclassified acquirer shall, at the time of filing a return required by said section 16 of said chapter 62C, pay to the commissioner an excise equal to 200 1/2 mills plus any amount by which the federal excise tax on cigarettes is less than 8 mills for each cigarette so imported or acquired and held for sale or consumption, and cigarettes, with respect to which such excise has been imposed and has not been refunded, if paid, shall not be subject, when subsequently sold, to any further excise under this section. The commissioner may, in the commissioner’s discretion, require reports from any common carrier who transports cigarettes to any point or points within the commonwealth and from any other person who, under contract, so transports cigarettes, and from any bonded warehouseman or bailee who has in his possession any cigarettes, such reports to contain such information concerning shipments of cigarettes as the commissioner shall determine. All such carriers, bailees, warehousemen and other persons shall permit the examination by the commissioner or the commissioner’s duly authorized agent of any records relating to the shipment of cigarettes into or from, or the receipt thereof within, the commonwealth.

SECTION 2. Section 7B of said chapter 64C, as so appearing, is hereby amended by striking out subsection (b) and inserting in place thereof the following subsection:-

(b) An excise shall be imposed on all cigars and smoking tobacco held in the commonwealth at the rate of 80 per cent of the wholesale price of such products. This excise shall be imposed on cigar distributors at the time cigars or smoking tobacco are manufactured, purchased, imported, received or acquired in the commonwealth. This excise shall not be imposed on any cigars or tobacco products that (i) are exported from the commonwealth; or (ii) are not subject to taxation by the commonwealth pursuant to any law of the United States.

SECTION 3. Notwithstanding any general or special law to the contrary, a manufacturer, wholesaler, vending machine operator, unclassified acquirer or retailer, as defined in section 1 of chapter 64C of the General Laws, and a stamper appointed by the commissioner under section 30 of said chapter 64C who, as of the commencement of business 7 days after the effective date of this act, has on hand any cigarettes for sale or any unused adhesive or encrypted stamps, shall make and file with the commissioner within 21 days a return, subscribed and sworn to under the penalties of perjury, showing a complete inventory of such cigarettes and stamps and shall, at the time such manufacturer, wholesaler, vending machine operator, unclassified acquirer, retailer or stamper is required to file such return, pay an additional excise of 50 mills per cigarette on all cigarettes and all unused adhesive and encrypted stamps upon which an excise of only 150 ½ mills has previously been paid. Chapters 62C of the General Laws and 64C of the General Laws relative to the assessment, collection, payment, abatement, verification and administration of taxes, including penalties, shall apply to the excise imposed by this section.

SECTION 4. Said Chapter 64C is hereby amended by adding the following new section:-

Section 7E. (a) As used in this section the following words shall, unless the context clearly requires otherwise, have the following meanings:-

“Electronic smoking device” any device that can be used to deliver aerosolized or vaporized nicotine to the person inhaling from the device, including, but not limited to an e-cigarette, e-cigar, e-pipe, vape pen or e-hookah. Electronic smoking device includes any component, part, or accessory of such a device, whether or not sold separately, that is used during the operation of the device.  Electronic smoking device does not include any battery or battery charger that is sold separately.  In addition, electronic smoking device does not include drugs, devices, or combination products approved for sale by the U.S. Food and Drug Administration.”

“Tobacco product”, a product containing, made or derived from tobacco or nicotine, or other non-nicotine containing substance that is intended for human consumption via an electronic smoking device, as defined by this section.

“Electronic smoking device or tobacco product distributor'', (i) any person who imports, or causes to be imported, into the commonwealth electronic smoking devices or tobacco products, as defined by this section, for sale or who manufactures electronic smoking devices or tobacco products, as defined by this section, in the commonwealth, and (ii) any person within or without the commonwealth who is authorized by the commissioner to make returns and pay the excise on electronic smoking devices or tobacco products, as defined by this section,  sold, shipped or delivered by him to any person in the commonwealth.

''Person'', a natural person, corporation, association, partnership or other legal entity.

“Electronic smoking device or tobacco product retailer'', any person who sells or furnishes electronic smoking devices or tobacco products, as defined by this section, in small quantities to consumers for individual use; provided, however, said electronic smoking devices or tobacco products, as defined by this section, shall not be used for the purpose of resale.

'Wholesale price'', (i) in the case of a manufacturer of electronic smoking devices or tobacco products, as defined by this section, the price set for such products or, if no price has been set, the wholesale value of these products; (ii) in the case of a distributor who is not a manufacturer of electronic smoking devices or tobacco products, as defined by this section, the price at which the distributor purchased these products; or (iii) in the case of a retailer or a consumer, the price at which he purchased these products.

''Taxed electronic smoking device or tobacco product'', electronic smoking device or tobacco product, as defined by this section, upon which the excise has been paid in full by the date on which payment is due, and with respect to which the return has been completed, signed and filed with the commissioner by the date on which the return is due, in accordance with this section and with section 16 of chapter 62C.

''Untaxed electronic smoking device or tobacco product”, electronic smoking device or tobacco product, as defined by this section, upon which the excise has not been paid in full by the date on which payment is due, or with respect to which the return has not been completed, signed and filed with the commissioner by the date on which the return is due, in accordance with this section and with section 16 of chapter 62C.

''Wholesale dealer'', any person who sells electronic smoking devices or tobacco products, as defined by this section, to retail dealers or other persons for purposes of resale,

(b) An excise shall be imposed on all electronic smoking devices or tobacco products, as defined by this section, held in the commonwealth at the rate of 75 per cent of the wholesale price of such products. This excise shall be imposed on electronic smoking device or tobacco product distributors at the time electronic smoking devices or tobacco products, as defined by this section, are manufactured, purchased, imported, received or acquired in the commonwealth.

(c) Every electronic smoking device or tobacco product retailer shall be liable for the collection of the excise on all electronic smoking devices or tobacco products, as defined by this section, in his possession at any time, upon which the excise has not been paid by a electronic smoking device or tobacco product distributor, and the failure of any electronic smoking device or tobacco product retailer to produce or exhibit to the commissioner or his authorized representative, upon demand, an invoice by an electronic smoking device or tobacco product distributor for any electronic smoking devices or tobacco products, as defined by this section, in his possession, shall be presumptive evidence that the excise thereon has not been paid and that such electronic smoking device or tobacco product retailer is liable for the collection of the excise thereon.

(d) The amount of the excise advanced and paid by an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer, as provided in this section, shall be added to and collected as part of, the sales price of the electronic smoking devices or tobacco products, as defined by this section.

(e)(1) An electronic smoking device or tobacco product distributor shall be liable for the payment of the excise on electronic smoking devices or tobacco products, as defined by this section, that he imports or causes to be imported into the commonwealth or that he manufactures in the commonwealth, and every electronic smoking device or tobacco product distributor authorized by the commissioner to make returns and pay the excise on electronic smoking devices or tobacco products, as defined by this section, sold, shipped or delivered by him to any person in the commonwealth shall be liable for the collection and payment of the excise on all electronic smoking devices or tobacco products, as defined by this section, sold, shipped or delivered.

(2) Every person who does not acquire untaxed electronic smoking devices or tobacco products, as defined by this section, but acquires taxed electronic smoking devices or tobacco products, as defined by this section, for sale at retail, shall not be licensed as an electronic smoking device or tobacco product distributor under this section, but shall be required, during the period that such person is an electronic smoking device or tobacco product retailer of taxed electronic smoking devices or tobacco products, as defined by this section, to be licensed as an electronic smoking device or tobacco product retailer.

(f) A person outside the commonwealth who ships or transports electronic smoking devices or tobacco products, as defined by this section, to electronic smoking device or tobacco product retailers in the commonwealth, to be sold by those electronic smoking device or tobacco product retailers, may apply for a license as a nonresident electronic smoking device or tobacco product distributor and, if the commissioner issues such a license to him, he shall thereafter be subject to all the provisions of this section and be entitled to act as an electronic smoking device or tobacco product distributor, provided he files proof with his application that he has appointed the state secretary as his agent for service of process relating to any matter or issue arising under this section. Such a nonresident person shall also agree to submit his books, accounts and records for examination in the commonwealth during reasonable business hours by the commissioner or his authorized representative.

(g) Every resident of the commonwealth shall be liable for the collection of the excise on all electronic smoking devices or tobacco products, as defined by this section, in his possession at any time, upon which the excise has not been paid by an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer, and the failure of any such consumer to produce or exhibit to the commissioner or his authorized representative, upon demand, an invoice or sales receipt by an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer for any electronic smoking devices or tobacco products, as defined by this section, in his possession, shall be presumptive evidence that the excise thereon has not been paid and that such consumer is liable for the collection of the excise thereon.

(h) No person shall act as an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer in the commonwealth unless licensed to do so in accordance with section 67 of chapter 62C. If an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer acts in more than 1 of said capacities at any 1 place of business, he shall procure a license for every capacity in which he acts, unless, upon application to the commissioner, the commissioner determines otherwise. Each license so issued or a duplicate copy thereof shall be prominently displayed on the premises covered by the license.

(i) Except as this section expressly provides to the contrary, the provisions of this chapter and of chapter 62C relative to the assessment, collection, payment, abatement, verification and administration of taxes, including penalties, shall so far as pertinent, apply to the excise tax imposed by this section.

(j) For the purposes of section 5, electronic smoking devices and tobacco products shall be tobacco products, electronic smoking device or tobacco product distributors shall be wholesalers and electronic smoking device or tobacco product retailers shall be retailers.

(k) For the purposes of section 8, untaxed electronic smoking devices or tobacco products, found in the commonwealth shall be cigarettes, which have not been returned and are not returnable under section 16 of chapter 62C or section 6 as the context requires.

(l)(1) Any person who sells, offers for sale or possesses with intent to sell any electronic smoking devices or tobacco products, as defined by this section, or otherwise acts as an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer without being licensed so to do, shall, in addition to any other penalty provided by this chapter or chapter 62C, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for each subsequent offense. Any person who knowingly purchases or possesses any electronic smoking devices or tobacco products, as defined by this section, not manufactured, purchased or imported by a licensed electronic smoking device or tobacco product distributor or licensed electronic smoking device or tobacco product retailer shall, in addition to any other penalty provided by this chapter or chapter 62C, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for each subsequent offense.

No person, either as principal or agent, shall sell or solicit orders for electronic smoking devices or tobacco products, as defined by this section, to be shipped, mailed or otherwise sent or brought into the commonwealth to any person not a licensed electronic smoking device or tobacco product distributor or licensed electronic smoking device or tobacco product retailer, unless the same is to be sold to or through a licensed electronic smoking device or tobacco product distributor or licensed electronic smoking device or tobacco product retailer. Any person who knowingly violates this provision shall, in addition to any other penalty provided by this chapter or chapter 62C, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for each subsequent offense.

It shall be presumed that the electronic smoking devices or tobacco products, as defined by this section, are subject to the excise until the contrary is established and the burden of proof that they are not shall be upon the person on whose premises the electronic smoking devices or tobacco products, as defined by this section, were found.

(2) Any person who knowingly has in his possession a shipping case or other container of electronic smoking devices or tobacco products, as defined by this section, not bearing the name and address of the person receiving the electronic smoking devices or tobacco products, as defined by this section, from a manufacturer or such other markings as the commissioner may prescribe and any person knowingly in possession of such a shipping case or other container of electronic smoking devices or tobacco products, as defined by this section, from which this name and address has been erased or defaced shall, in addition to any other penalty provided by this chapter or chapter 62C, be subject to a civil penalty of not more than $5,000 for the first offense or not more than $25,000 for each subsequent offense.

(3) Any person who files any false return, affidavit, or statement, or who violates any provision of this section for which no other penalty has been provided shall, in addition to any other penalty provided by this chapter or chapter 62C, be subject to a civil penalty of not more than $5,000 for the first offense and not more than $25,000 for each subsequent offense.

(4) Whenever the commissioner or a police officer discovers, in the possession of any person not being a licensed electronic smoking device or tobacco products distributor or one authorized by the commissioner, any untaxed electronic smoking devices or tobacco products, as defined by this section, he may seize and take possession of those electronic smoking devices or tobacco products, as defined by this section, together with any vending machine or other receptacle, which shall include, without limitation, a motor vehicle, boat or airplane, in which they are contained or in which they are transported. Such electronic smoking devices or tobacco products, as defined by this section, vending machine or other receptacle seized by a police officer shall be turned over to the commissioner and shall be forfeited to the commonwealth. The commissioner shall destroy such electronic smoking devices or tobacco products, as defined by this section, and shall destroy or otherwise dispose of such vending machine or other receptacle. The commissioner may, within a reasonable time after the seizure, by a public notice at least 5 days before the day of sale, sell the vending machine or other receptacle at public sale and deposit the proceeds in the General Fund.

(5) The state police and all local police authorities may, and at the request of the commissioner or his duly authorized agent shall, enforce this section. Each violation of this section shall be a separate offense.

SECTION 5.  Section 16 of chapter 62C of the General Laws, as so appearing, is hereby amended by adding after subsection (c1/2) the following new subsection:-

(c3/4) Every licensee under section 7E of chapter 64C shall, on or before the twentieth day of each calendar month or on or before the twentieth day of the month following each calendar quarter, as the commissioner shall require, file with the commissioner a return for each place of business maintained, stating the quantity of electronic smoking devices or tobacco products, as defined by said Section 7E of Chapter 64C, sold by such licensee in the commonwealth during the preceding calendar month or quarter, as the case may be, and such return shall contain or be accompanied by such further information as the commissioner shall require. If a licensee ceases to sell electronic smoking devices or tobacco products, as defined by said Section 7E of Chapter 64C, within the commonwealth, he shall immediately file with the commissioner a return for the period ending with such cessation.

SECTION 6.  Section 67 of chapter 62C of the General Laws, as so appearing, is hereby amended in the first sentence of paragraph 1 by adding after the words “chapter 64C” the following:-

“as an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer as defined by Section 7E of Chapter 64C”

And said Section 67 of Chapter 62C is further amended in the first sentence of paragraph 2 by adding after the words “as defined in chapter sixty-four C” the following:-

“as an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer as defined by Section 7E of Chapter 64C”

And said Section 67 of Chapter 62C is further amended in the first sentence of paragraph 5 by adding after the words “cigar retailers” the following:-

“as an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer as defined by Section 7E of Chapter 64C”

And said Section 67 of Chapter 62C is further amended in the first sentence of paragraph  by adding after the words “cigar retailers” the following:-

“as an electronic smoking device or tobacco product distributor or electronic smoking device or tobacco product retailer as defined by Section 7E of Chapter 64C”