Budget Amendment ID: FY2022-S3-413
EHS 413
Excise on manufacture and sale of certain opioids for distribution in the Commonwealth
Mr. O'Connor moved that the proposed new text be amended by inserting after section 63 the following sections:-
“SECTION XX. The General Laws are hereby amended by inserting after chapter 63B the following chapter:-
Chapter 63D. Excise on manufacture and sale of certain opioids for distribution in the commonwealth.
Section 1. "Commissioner", the commissioner of revenue.
"Gross receipts", receipts from sales made by a person to a purchaser that is not a related party. In the case of sales to a related party or parties for subsequent resale to an unrelated buyer, the gross receipts are the amount paid for the product by the first unrelated buyer.
"Opioid", any product included in the pharmacological class category of full opioid agonist, opioid agonist or partial opioid agonist in the National Drug Code (NDC) Directory NDC Product File, except for products approved by the U.S. Food and Drug Administration for the treatment of opioid use disorder.
"Person", any natural person or legal entity.
"Related parties", an entity that belongs to the same affiliated group as the person under section 1504 of the Internal Revenue Code, as amended and in effect for the taxable year, or if the entity and the person are otherwise commonly owned and controlled.
Section 2. (a) Any person who manufactures opioids and sells such products, directly or through another person, for distribution in the commonwealth shall pay an excise of 15 per cent of its gross receipts from such sales; provided, however, that gross receipts subject to the excise under this section shall be limited to the sales of opioids that are ultimately dispensed in the commonwealth pursuant to a valid prescription issued under section 18 of chapter 94C.
(b) A person who manufactures opioids and sells such products, directly or through another person, for distribution in the commonwealth as described in subsection (a) shall file a return as provided in subsection (a) of section 4 declaring total sales subject to excise in the immediately preceding calendar quarter. In the event that a person filing such a return pays an excise of 15 per cent of its gross receipts from sales of opioids that are not ultimately dispensed in the commonwealth pursuant to a valid prescription issued under section 18 of chapter 94C, the person may claim a credit for such excise amounts on the return for the tax period during which such sales are ultimately dispensed.
Section 3. The excise under section 2 shall apply only to persons who maintain a place of business in the commonwealth or whose total sales of all products, directly or through another person, for distribution in the commonwealth are more than $25,000 in the calendar quarter to which the excise under section 2 otherwise would apply, or in the case of the 6 months ending June 30, 2022, more than $50,000 for such 6 month period.
Section 4. (a) Any person subject to the excise under section 2 shall file a return with the commissioner and shall pay such excise by the fifteenth day of the third month following the end of each calendar quarter. Such return shall set out the person's total sales subject to excise in the immediately preceding calendar quarter and shall provide such other information as the commissioner may require.
(b) Each person subject to the excise under section 2 shall provide to the commissioner annually, on or before June 1st, a report detailing all opioids sold, directly or through another person, for distribution in the commonwealth in the prior calendar year. Such report shall include:
(i) the person's name, address, phone number, federal Drug Enforcement Administration (DEA) registration number and controlled substance registration number issued by the department;
(ii) the name and NDC of the opioid;
(iii) the unit of measure and quantity of the opioid;
(iv) the name, address and DEA registration number of the first unrelated buyer of the opioid;
(v) the date of the sale of the opioid;
(vi) whether the opioid was ultimately dispensed in the commonwealth pursuant to a valid prescription issued under section 18 of chapter 94C;
(vii) the gross receipt total, in dollars, of all opioids sold;
(viii) the gross receipt total, in dollars, and quantity by NDC of all opioids ultimately dispensed in the commonwealth pursuant to a valid prescription issued under section 18 of chapter 94C; and
(ix) any other elements required by the commissioner.
Section 5. The excise imposed under this chapter shall be in addition to, and not a substitute for or credit against any other tax or excise imposed under the General Laws.
Section 6. The commissioner may disclose information contained in returns and reports filed under this chapter to the department of public health for purposes of verifying that the appropriate amount of a filer's sales subject to excise are properly declared and that all reporting is otherwise correct. Return and report information so disclosed shall remain confidential and shall not be public record.
Section 7. To the extent that a person subject to excise under section 2 fails to pay amounts due under this chapter, a related party of such person that directly or indirectly distributes the opioid of such person in the commonwealth shall be jointly and severally liable for the excise due.
Section 8. The commissioner may promulgate regulations or issue other guidance for the implementation of this chapter.
SECTION XX. Chapter 63D of the General Laws, as inserted by section 64, shall apply to all sales commencing on or after a date 6 months after the enactment date of this act. The commissioner of revenue shall issue regulations or other guidance regarding the timing of returns required under said chapter 63D, as so inserted, not later than 6 months after the enactment date of this act.”