ASSEMBLY, No. 1332

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblyman DeCROCE

 

 

An Act concerning the sale and distribution of cigarettes and the use of license fees to support the regulation of the sale of and taxation of cigarettes, amending and supplementing P.L.1948, c.65 and amending P.L.1952, c.247.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. Section 202 of P.L.1948, c.65 (C.54:40A-4) is amended to read as follows:

    202. Issuance of license; fee.

    a. All licenses shall be issued by the director, who shall make rules and regulations respecting applications therefor and issuance thereof. All costs associated with an application shall be paid by the applicant.

    b. The following individuals related to distributors, wholesale dealers, retail dealers operating more than nine cigarette vending machines, and retail dealers who sell cigarettes at retail at more than nine premises shall submit with applications for a license, fingerprints, which shall be processed through the Federal Bureau of Investigation and the New Jersey State Police, and such other information as the director may require:

    (1) Individuals having any interest whatsoever in a proprietorship or company.

    (2) Partners of a partnership, regardless of percentage.

    (3) Joint venturers in a joint venture.

    (4) Officers, directors, and all stockholders holding directly or indirectly a beneficial interest in more than 5% of the outstanding shares of a corporation.

    (5) [Employees] All distributor's sales representatives, all wholesale dealer's sales representatives, any employees receiving in excess of[$30,000.00] $40,000 per annum compensation whether as salary, commission, bonus or otherwise and persons who, in the judgment of the director are employed in a supervisory capacity or have the power to make or substantially affect discretionary business judgments of the applicant entity with regard to the cigarette business.

    (6) Other persons who the director establishes have the ability to control the applicant entity through any means including but not limited to, contracts, loans, mortgages or pledges of securities where such control is inimical to the policies of this act because such person is a career offender or a member of a career offender cartel as defined in paragraph (2) of subsection e. of this section. Individuals licensed pursuant to the "Casino Control Act," P.L.1977, c.110 (C.5:12-1 et seq.) shall only be required to produce evidence of said licensure in satisfaction of the foregoing.

    The provisions in this subsection as to wholesale dealers, retail dealers operating more than nine cigarette vending machines, and retail dealers who sell cigarettes at retail at more than nine premises do not apply to retail grocery stores and supermarkets primarily engaged in the self-service sale of foods and household supplies for off-premises consumption or to restaurants, hotels and motels operated by national corporations with such premises in six or more states and primarily engaged in the sale of foods for retail consumption or in the rental of rooms for lodging.

    c. The director shall not issue any license under this act where he has reasonable cause to believe that anyone required to submit information under this act has willfully withheld information requested of him for the purpose of determining the eligibility of the applicant to receive a license or where the director has reasonable cause to believe that information submitted in the application is false and misleading and is not made in good faith.

    d. The director shall not issue any license under this act where he has reasonable cause to believe that anyone required to be licensed or anyone required to submit information under this act, has been convicted of any offense in any jurisdiction which would be at the time of conviction a crime involving moral turpitude.

    It is further provided that any applicant or person required to submit information who has a charge pending pursuant to any of the foregoing shall disclose that fact to the director. The director may then withhold action on new applications or, in the case of an application for the renewal of a license, issue a temporary license until there has been a disposition of the charge. The director shall have the discretion to waive the prohibition against licensure herein provided upon the presentation of proof that a period of not less than five years has elapsed since the last conviction or the expiration of any period of incarceration imposed with respect thereto.

    e. The director shall not issue any license where the applicant or anyone required to submit information has been identified as a career offender or a member of a career offender cartel in such a manner as to create a reasonable belief that the association is of such a nature as to be inimical to the policies of this act or to the taxation, distribution, and sale of cigarettes within the State. The director may request the Attorney General for advice respecting whether a person is a "career offender" within the meaning of this subsection, or is a "contumacious defiant" within the meaning of subsection f. of this section.

    (1) As used in this subsection: "career offender" means any person whose behavior is pursued in an occupational manner or context for the purpose of economic gain, utilizing such methods as are deemed criminal violations of the public policy of this State; and (2) "career offender cartel" means any group of persons who operate together as career offenders.

    f. The director shall not issue any license where the applicant or anyone required to submit information has been found to be contumaciously defiant before any legislative investigative body or other official investigative body of this State or of the United States when such body is engaged in the investigation of organized crime, official corruption or the cigarette industry itself.

    g. Each such license shall lapse on March 31 of the period for which it is issued, and each such license shall be continued annually upon the conditions that the licensee shall have paid the required fee and complied with all the provisions of this act and the rules and regulations of the director made pursuant thereto.

    h. For each license issued to a distributor there shall be paid to the director a fee of [$350.00] $1,000. If a distributor sells or intends to sell cigarettes at two or more places of business, whether established or temporary, a separate license shall be required for each place of business. Each license, or certificate, thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director. The director shall require each licensed distributor to file with him a bond in an amount not less than $6,000.00 to guarantee the proper performance of his duties and the discharge of his liabilities under this act. The bond shall be executed by such licensed distributor as principal, and by a corporation approved by the director and duly authorized to engage in business as a surety company in the State of New Jersey, as surety. The bond shall run concurrently with the distributor's license.

    For each license issued to a manufacturer, and for each continuance thereof, there shall be paid to the director a fee of[$10.00] $1,000.

    For each license issued to a manufacturer's representative, a distributor's sales representative, or a wholesale dealer's sales representative, and for each continuance thereof, there shall be paid to the director a fee of[$5.00] $50.

    For each license issued to a wholesale dealer there shall be paid to the director a fee of [$250.00] $1,000. If a wholesale dealer sells or intends to sell cigarettes at two or more places of business, whether established or temporary, a separate license shall be required for each place of business. Each license, or certificate thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director.

    For each license issued to a retail dealer and for each continuance thereof, excepting a retail dealer operating a cigarette vending machine, there shall be paid to the director a fee of[$5.00] $75. For each license issued to a retail dealer operating a vending machine for the sale of cigarettes and for each continuance thereof, there shall be paid to the director a fee of[$5.00] $10. If a retail dealer sells or intends to sell cigarettes at two or more places of business, whether established or temporary, or whether in the same building or not, a separate license shall be required for each place of business. Each vending machine for the sale of cigarettes shall be separately licensed and be deemed a separate place of business. Each license, or certificate thereof, and such other evidence of license shall be exhibited in the place of business for which it is issued and in such manner as may be prescribed by the director.

    Any person licensed only as a distributor or as a distributor's sales representative or as a manufacturer or as a manufacturer's representative or as a wholesale dealer or as a wholesale dealer's sales representative or as a retail dealer shall not operate in any other capacity except under that for which he is licensed herein, unless the appropriate license or licenses therefor are first secured.

    For each license issued to a consumer and for each continuance thereof there shall be paid to the director a fee of $1.00. Each license, or certificate thereof, or such other evidence of license as may be prescribed by the director, shall be so kept by the consumer as to be readily available for inspection.

    No license shall be issued to any person except upon the payment of the full fee therefor, any statute or exemption to the contrary notwithstanding. No license shall be assignable or transferable, except as hereinafter provided, but in the case of death, bankruptcy, receivership, or incompetency of the licensee, or if for any other reason whatsoever the business of the licensee shall devolve upon another by operation of law, the director may, in his discretion, extend said license for a limited time to the executor, administrator, trustee, receiver, or person upon whom the same has devolved. A purchaser or assignee of a licensed wholesaler or licensed distributor, or any other person upon whom the business of a licensed wholesaler or licensed distributor shall devolve by operation of law, shall upon application to the director, be entitled to an assignment or transfer of the wholesale or distributor license for the balance of the existing license period upon payment of a transfer fee of $5.00 and subject to his qualification to be a licensed wholesaler or licensed distributor under the provisions of this act. The license issued for each vending machine for the sale of cigarettes may be transferred from machine to machine in the same ownership. No refund of the license fee shall be paid to any person upon the surrender or revocation of any license except a license fee paid or collected in error. But, upon payment of $1.00 fee, there may be obtained (1) a duplicate license, or certificate thereof, in the event the original is lost, destroyed or defaced, and (2) an amended license, or certificate thereof, upon a change in the location of the place of business of any distributor or dealer.

(cf: P.L.1987, c.37, s.1)

 

    2. Section 102 of P.L.1948, c.65 (C.54:40A-2) is amended to read as follows:

    102. For the purposes of this act and unless otherwise required by the context:

    a. "Cigarette" means any roll for smoking made wholly or in part of tobacco, or any other substance or substances other than tobacco, irrespective of size, shape or flavoring, the wrapper or cover of which is made of paper or any other substance or material, excepting tobacco.

    b. "Director" means the Director of the Division of Taxation, in the Department of the Treasury.

    c. "Distributor" means and includes any person, wherever resident or located, who brings or causes to be brought into this State unstamped cigarettes purchased directly from the manufacturers thereof and stores, sells or otherwise disposes of the same after they shall reach this State.

    d. "Wholesale dealer" shall include any person, wherever resident or located, other than a distributor, as defined herein, who:

    (1) Purchases cigarettes from any other person who purchases from the manufacturer and who acquires such cigarettes solely for the purpose of bona fide resale to retail dealers or to other persons for the purposes of resale only; or

    (2) Services retail outlets by the maintenance of an established place of business for the purchase of cigarettes, including, but not limited to, the maintenance of warehousing facilities for the storage and distribution of cigarettes.

    e. "Retail dealer" means any person who is engaged in this State in the business of selling cigarettes at retail. Any person placing a cigarette vending machine at, on or in any premises shall be deemed to be a retail dealer for each such vending machine.

    f. "Consumer" means any person except a distributor or a manufacturer who acquires for consumption, storage or use in this State cigarettes to which New Jersey revenue stamps have not been attached.

    g. "Place of business" means and includes any place where cigarettes are sold or where cigarettes are brought or kept for the purpose of sale or consumption, including so far as applicable any vessel, vehicle, airplane, train or cigarette vending machine.

    h. "Licensed distributor" means any distributor, as defined in this act, licensed under the provisions of this act.

    i. "Licensed wholesale dealer" means any wholesale dealer, as defined in this act, licensed under the provisions of this act.

    j. "Licensed retail dealer" means any retail dealer, as defined in this act, licensed under the provisions of this act.

    k. "Licensed consumer" means any consumer, as defined in this act, licensed under the provisions of this act.

    l. "Person" means any individual, firm, corporation, copartnership, joint venture, association, receiver, trustee, guardian, executor, administrator, or any other person acting in a fiduciary capacity, or any estate, trust or group or combination acting as a unit, the State Government and any political subdivision thereof, and the plural as well as the singular, unless the intention to give a more limited meaning is disclosed by the context.

    m. "Rules and regulations" means those made and promulgated by the director in the administration of this act.

    n. "Sale" means any sale, transfer, exchange, theft, barter, gift, or offer for sale and distribution, in any manner or by any means whatsoever.

    o. "Stamp" means any impression, device, stamp, label or print manufactured, printed or made as prescribed by the director.

    p. "Taxpayer" means any person subject to a tax imposed by this act, or any person required to be licensed under this act.

    q. "Treasurer" means the State Treasurer.

     r. "Use" means the exercise of any right or power incidental to the ownership of cigarettes.

    s. "Manufacturer" means and includes any person, wherever resident or located, who manufactures or produces, or causes to be manufactured or produced, cigarettes and sells, uses, stores or distributes the same regardless of whether they are intended for sale, use or distribution within or without this State.

    t. "Manufacturer's representative" means and includes any person, employed by a manufacturer, who, for promotional purposes, sells, stores, handles or distributes cigarettes, within this State, limited exclusively to cigarettes manufactured by the employing manufacturer.

    u. "Licensed manufacturer" means any manufacturer, as defined in this act, licensed under the provisions of this act.

    v. "Licensed manufacturer's representative" means any manufacturer's representative, as defined in this act, licensed under the provisions of this act.

    w. "Distributor's sales representative" means an individual employed by a distributor who regularly spends at least four hours per week away from the individual's employer's place of business engaged in the sale of or solicitation of the sale of cigarettes.

    x. "Wholesale dealer's sales representative" means an individual employed by a wholesale dealer who regularly spends at least four hours per week away from the individual's employer's place of business engaged in the sale of or solicitation of the sale of cigarettes.

    y. "Licensed distributor's sales representative" means a distributor's sales representative as defined in this act, licensed under the provisions of this act.

    z. "Licensed wholesale dealer's sales representative" means a wholesale dealer's sales representative as defined in this act, licensed under the provisions of this act.

(cf: P.L.1985, c.515, s.15)

 

    3. Section 205 of P.L.1948, c.65 (C.54:40A-7) is amended to read as follows:

    205. Reports required; penalty required for not filing reports.

    Every licensed distributor shall file with the director on or before the 20th day of each month, a report in such form as the director shall prescribe, which report shall disclose the number of cigarettes on hand on the first and last days of the calendar month immediately preceding the month in which such report is required; together with such information concerning the amount of stamps purchased, used, and on hand during the report period; together with any other information for the report period that the director shall prescribe.

    Every licensed manufacturer shall file with the director on or before the 20th day of each month, a report in such form as the director shall prescribe, which report shall disclose the number of cigarettes sold, subject to the cigarette tax, for the calendar month immediately preceding the month in which such report is required; together with any other information for the report period that the director shall prescribe.

    Every licensed manufacturer's representative, licensed distributor's and wholesale dealer's sales representative, and licensed wholesale and retail dealer, upon notice from the director, shall file with the director a report in such form, and on such dates, as the director shall prescribe.

    Every licensed consumer who has acquired cigarettes for use, storage or consumption subject to the tax shall, on or before the 20th day of the month following receipt of such cigarettes, complete and file with the director, in such form as the director shall prescribe, a report showing the amount of cigarettes so received. Said report shall be accompanied by a remittance for the full amount of the tax due.

    Any person, other than a licensed distributor, who transports unstamped cigarettes upon the public highways, roads, or streets of this State or who stores unstamped cigarettes in this State upon notice from the director, shall file with the director a report in such form, and on such dates, as the director shall prescribe.

    Any person who shall fail to file any report on the day when it shall be due, shall forfeit as a penalty, an amount as provided in the State Tax Uniform Procedure Law, [subtitle 9 of Title 54 of the Revised Statutes] R.S.54:48-1 et seq. The director, if satisfied that the failure to comply with any provision of this section was excusable, may remit the whole or any part of said penalty.

(cf: P.L.1975, c.177, s.34)

 

    4. Section 2 of P.L.1952, c.247 (C.56:7-19) is amended to read as follows:

    2. The following words, terms and phrases, when used in this act, shall have the meaning ascribed to them in this section except where the context clearly indicates a different meaning;

    a. "Person" shall mean and include any individual, firm, association, company, partnership, corporation, joint stock company, club, agency, syndicate, municipal corporation or other political subdivision of this State, trust, receiver, trustee, fiduciary and conservator.

    b. "Cigarettes" shall mean and include any roll for smoking, made wholly or in part of tobacco, or of any other substance or substances other than tobacco, irrespective of size, shape or flavoring, the wrapper or cover of which is made of paper or any other substance or material, excepting tobacco.

    c. "Sale" shall mean any transfer for a consideration, exchange, barter, gift, offer for sale and distribution in any manner or by any means whatsoever.

    d. "Wholesaler" shall include any person who:

    (1) Purchases cigarettes directly from the manufacturer; or

    (2) Purchases cigarettes from any other person who purchases from the manufacturer and who acquires such cigarettes solely for the purpose of bona fide resale to retail dealers or to other persons for the purposes of resale only; or

    (3) Service retail outlets by the maintenance of an established place of business for the purchase of cigarettes, including, but not limited to, the maintenance of warehousing facilities for the storage and distribution of cigarettes.

    Nothing contained herein shall prevent a person from qualifying in different capacities as both a "wholesaler" and "retailer" under the applicable provisions of this act.

    e. "Retailer" shall mean and include any person who operates a store, stand, booth, or concession for the purpose of making sales of cigarettes at retail.

    f. "Sell at retail," "sale at retail" and "retail sales" shall mean and include any transfer of title to cigarettes for a valuable consideration, made in the ordinary course of trade or usual conduct of the seller's business, to the purchaser for consumption or use.

    g. "Sell at wholesale," "sale at wholesale" and "wholesale sales" shall mean and include any bona fide transfer of title to cigarettes for a valuable consideration, made in the ordinary course of trade or in the usual conduct of the wholesaler's business, to a retailer for the purpose of resale.

    h. "Basic cost of cigarettes" shall mean the invoice cost of cigarettes to the retailer or wholesaler, as the case may be, or the replacement cost of cigarettes, to the retailer or wholesaler, as the case may be, in the quantity last purchased, whichever is lower, less all trade discounts and the normal discount for cash afforded for prompt payment, but excluding any special, extraordinary, or anticipatory discounts for payment within a shorter period of time than the prompt payment date required for eligibility for the normal discount for cash, to which shall be added the full face value of any stamps which may be required by any cigarette tax act of this State and by ordinance of any municipality thereof, now in effect or hereafter enacted, if not already included by the manufacturer in his list price.

    i. "Director" means the Director of the Division of Taxation, in the Department of the Treasury.

    j. "Business day" shall mean any day other than a Sunday or a legal holiday.

    k. "Average wholesaler" means a wholesaler who, by reason of the nature of the wholesaler's business, the wholesaler's volume of cigarette sales and the wholesaler's ratio of cigarette sales to total sales, is representative of all wholesalers in this State.

    l. "Subjobber" means a person who is a wholesaler to whom a license qualifying such person as a "licensed distributor" pursuant to the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.) has not been issued, and who, in the usual course of business, purchases cigarettes and sells, within this State, at least 75% of all such cigarettes purchased to retail dealers, other wholesalers, or other persons who buy such cigarettes for the purpose of resale to the ultimate consumer; provided that such person maintains a separate established place of business for the receiving, storage and distribution of cigarettes.

(cf: P.L.1983, c.441, s.1)

 

    5. Section 4 of P.L.1952, c.247 (C.56:7-21) is amended to read as follows:

    4. a. The term "cost to the retailer" shall mean the "basic cost of cigarettes" to the retailer plus the "cost of doing business by the retailer," as evidenced by the standards and methods of accounting regularly employed by him in his allocation of overhead costs and expenses, paid or incurred, and must include, without limitation, labor (including salaries of executives and officers), rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance and advertising; provided, that any retailer who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, discounts ordinarily allowed upon purchases by a wholesaler shall, in determining "cost to the retailer," pursuant to this subsection, add the "cost of doing business by the wholesaler," as defined in section five of this act, to the "basic cost of cigarettes" to said retailer, as well as the "cost of doing business by the retailer."

    b. In the absence of the filing with the director of satisfactory proof of a lesser or higher cost of doing business by the retailer making the sale, the "cost of doing business by the retailer" shall be presumed to be eight per centum (8%) of the "basic cost of cigarettes" to the retailer.

    c. In the absence of the filing with the director of satisfactory proof of a lesser or higher cost of doing business, the "cost of doing business by the retailer," who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, the discounts ordinarily allowed upon purchases by a wholesaler, shall be presumed to be eight per centum (8%) of the sum of the "basic cost of cigarettes" and the "cost of doing business by the wholesaler."

    d. If a retailer establishes to the satisfaction of the director a lesser or higher cost of doing business other than the presumed "cost of doing business by the retailer" pursuant to this section, such lesser or higher cost of doing business may be used to compute the "cost to the retailer" for a period not longer than 12 months, at the end of which period the "cost to the retailer" shall be computed using the presumed cost of doing business, unless the retailer again establishes to the satisfaction of the director a lesser or higher cost of doing business. Any approval of a lesser or higher "cost of doing business by the retailer" other than the presumed cost of doing business shall be effective on the 45th day after written notification of such approval by the director.

    e. All approvals by the director of a lesser or higher "cost of doing business by the retailer" other than the presumed cost of doing business in effect on the effective date of P.L. , c. (Now pending before the Legislature as this bill) shall be rescinded on that date.

(cf: P.L.1952, c.247, s.4)

 

    6. Section 5 of P.L.1952, c.247 (C.56:7-22) is amended to read as follows:

    5. a. The term "cost to the wholesaler" shall mean the "basic cost of cigarettes" to the wholesaler plus the "cost of doing business by the wholesaler," as evidenced by the standards and methods of accounting regularly employed [by him in his allocation of overhead costs and expenses, paid or incurred, and must include, without limitation,]in the determination of costs for the purpose of federal income tax reporting, for the total operation of the establishment for the previous 12 month period, and shall include, but not be limited to, all direct costs, including if applicable, inbound freight charges, labor costs to affix tax indicia, cost of equipment to affix hand stamps, including glue, rental and maintenance expenses for the cigarette tax machine, State and local cigarette licenses, and indirect overhead costs and expenses paid or incurred, such as pre-opening expenses, management fees, labor costs (including salaries of executives and officers), rent, depreciation, selling costs, maintenance [of equipment] expenses, interest expenses, delivery costs, all types of licenses, taxes, insurance and advertising and any central and regional administrative expenses. All financial statements of a wholesaler required to be filed with the director shall be audited by a certified public accountant at the wholesaler's expense. The director may impose such fees as may be necessary to cover the costs incurred in administering this subsection including review and audit of a petitioning person's audited financial statements.

    b. In the absence of the filing with the director of satisfactory proof of a lesser or higher cost of doing business by the wholesaler making the sale to a retailer, whether or not such wholesaler is determined by the director to be an average wholesaler, and whether or not a subjobber, the "cost of doing business by the wholesaler" shall be presumed to be [5.25%]6.00% of the "basic cost of cigarettes" to the wholesaler, [plus cartage to the retail outlet, if performed or paid for by the wholesaler, which cartage cost, in the absence of the filing with the director of satisfactory proof of a lesser or higher cost, shall be deemed to be 3/4 of 1% of the "basic cost of cigarettes" to the wholesaler] less a 0.50% discount for C.O.D. payment by the retailer.

    c. If an average wholesaler establishes to the satisfaction of the director a lesser or higher cost of doing business other than the presumed "cost of doing business by the wholesaler," such lesser or higher cost of doing business may be used to compute the "cost to the wholesaler" for a period not to exceed 12 months, at the end of which period the "cost to the wholesaler" shall be computed using the presumed cost of doing business, unless the average wholesaler again establishes to the satisfaction of the director a lesser or higher cost of doing business. Any approval of a lesser or higher "cost of doing business by the wholesaler" other than the presumed cost of doing business shall be effective on the 45th day after written notification of such approval by the director.

    d. All approvals by the director of a lesser or higher "cost of doing business by the wholesaler" other than the presumed cost of doing business in effect on the effective date of P.L. , c. (Now pending before the Legislature as this bill) shall be rescinded on the 90th day after the effective date of P.L. , c. (Now pending before the Legislature as this bill).

(cf: P.L.1974, c.45, s.1)

 

    7. Section 15 of P.L.1952, c.247 (C.56:7-32) is amended to read as follows:

    15. a. An action may be maintained in any court of equitable jurisdiction to prevent, restrain or enjoin a violation, or threatened violation, of any of the provisions of this act. Such an action may be instituted by any person injured by any violation or threatened violation of this act or by the Attorney-General, upon the request of the director. If in such action a violation or threatened violation of this act shall be established, the court shall enjoin and restrain, or otherwise prohibit, such violation or threatened violation, and shall award punitive damages to the plaintiff. In such action it shall not be necessary that actual damages to the plaintiff be alleged or proved, but where alleged and proved, the plaintiff in said action, in addition to such injunctive relief and costs of suit, including reasonable attorney's fees, shall be entitled to recover from the defendant the actual damages sustained by such plaintiff.

    b. In the event that no injunctive relief is sought or required, any person injured by a violation of this act may maintain an action for damages and costs of suit in any court of competent jurisdiction.

(cf: P.L.1952, c.247, s.15)

 

    8. (New section) At least 25% of the revenue derived from license fees collected by the Division of Taxation under the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.), shall be dedicated to the enforcement of the "Unfair Cigarette Sales Act of 1952," P.L.1952, c.247 (C.56:7-18 et seq.) and the balance of such revenue as may be necessary to fund the enforcement and administrative activities of the division under the "Cigarette Tax Act," and the "Unfair Cigarette Sales Act of 1952," shall be appropriated from license fees collected by the division pursuant to P.L.1948, c.65, subject to the approval of the Director of the Division of Budget and Accounting.

 

    9. This act shall take effect immediately and sections 1 and 3 shall remain inoperative until the April first next following their enactment.

 

 

STATEMENT

 

    This bill increases certain license fees under the Cigarette Tax Act and makes changes in the Unfair Cigarette Sales Act in order to maintain an orderly system for the distribution of cigarettes and the collection of the cigarette excise tax.

    The bill establishes a definition of subjobber and changes the presumed minimum price, determined as the cost of cigarettes plus the presumed cost of doing business, at which wholesalers including subjobbers can sell cigarettes to retailers from 5.25 percent to 6.0 percent of the cost of the cigarettes. The bill changes the requirements for securing the Division of Taxation's permission to sell cigarettes at a price based on a cost of doing business other than the presumed cost of doing business. All approvals by the Director of the Division of Taxation of a lesser or higher cost of doing business by a wholesaler in effect upon enactment of this bill are rescinded on the 90th day after enactment. All prior approvals by the director of a lesser or higher cost of doing business by a retailer are rescinded upon enactment. The bill allows a 1/2% discount when invoices are paid C.O.D.

    The bill changes annual license fees under the Cigarette Tax Act, and adds the new license categories of distributor's sales representative and wholesale dealer's sales representative under the Cigarette Tax Act. The bill provides that the Director of the Division of Taxation may require these new licensees to comply with information reporting requirements as the director may prescribe.

    In addition, the bill increases the salary threshold at which the fingerprinting of licensee's employees is required in the license application process. The threshold is increased from $30,000 to $40,000 to reflect an adjustment for inflation in wages and salaries since the requirement was first established in 1980.

    At least 25% of the revenue derived from license fees is dedicated to the enforcement of the Unfair Cigarette Sales Act and so much of the balance of such revenue as may be necessary is to be made available to fund enforcement and administrative activities of the division under the Unfair Cigarette Sales Act and the Cigarette Tax Act.

 

 

 

Increases certain license fees under cigarette excise tax, requires licensing of certain sales representatives, amends Unfair Cigarette Sales Act, dedicates 25% of license fee revenue for enforcement of sales act.