CHAPTER 264

 

An Act increasing the cigarette tax and tobacco products tax rates to provide funds for the Health Care Subsidy Fund and increased funding for public school districts facilities, amending and supplementing P.L.1948, c.65, amending P.L.1990, c.39 and supplementing P.L.1992, c.160 (C.26:2H-18.51 et seq.).


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


    1. Section 301 of P.L.1948, c.65 (C.54:40A-8) is amended to read as follows:


C.54:40A-8 Tax imposed; rate.

    301. Tax imposed; rate. A tax is hereby imposed on the sale, use or possession for sale or use within this State of all cigarettes at the rate of $0.04 for each cigarette.


    2. a.Each retail licensee under P.L.1948, c.65 (C.54:40A-1 et seq.), shall, on or before the first day of the second month after the effective date of P.L.1997, c.264, file a return under oath or certified under the penalties of perjury with the director on forms furnished by the director, showing the amount of cigarettes in the retail licensee's possession in the State at 12:01 a.m. on the effective date of P.L.1997, c.264, and shall at the time of filing that return pay the tax to the director. Failure to obtain such forms shall not be an excuse for the failure to make a return containing the information required by the director.

      b.   Notwithstanding the provisions of section 401 of P.L.1948, c.65 (C.54:40A-11) to the contrary, each licensed distributor and wholesale dealer under P.L.1948, c.65 (C.54:40A-1 et seq.), shall, on or before the first day of the second month after the effective date of P.L.1997, c.264, file a return under oath or certified under the penalties of perjury with the director on forms furnished by the director, showing the amount of cigarettes in the dealer's or wholesaler's possession in the State at the close of business prior to the effective date of P.L.1997, c.264. An amount of tax shall be due equal to the additional tax on the number of cigarettes bearing stamps, and unaffixed stamps on hand, that exceeds four weeks' average purchases of stamps. No additional tax shall be due on the number of stamps equal to or less than the four weeks' average purchases. Each retail licensee shall at the time of filing that return pay the tax to the director. Failure to obtain such forms shall not be an excuse for the failure to make a return containing the information required by the director.


      3.   Section 3 of P.L.1990, c.39 (C.54:40B-3) is amended to read as follows:


C.54:40B-3 Tax of 48% imposed on wholesale sale of tobacco product.

      3. a. There is imposed a tax of 48% upon the receipts from every sale of a tobacco product by a distributor or a wholesaler to a retail dealer or consumer.

      b.   Unless a tobacco product has already been or will be subject to the wholesale sales tax imposed in subsection a. of this section, if a distributor or wholesaler uses a tobacco product within this State, there is imposed upon the distributor or wholesaler a compensating use tax of 48% measured by the sales price of a similar tobacco product to a retail dealer.

      c.   Unless a wholesale use tax is due pursuant to subsection b. of this section, if a distributor or wholesaler has not collected the wholesale sales tax imposed in subsection a. of this section upon a sale that is subject to the wholesale sales tax imposed in that subsection a., there is imposed upon the retail dealer or consumer chargeable for the sale a compensating use tax of 48% of the price paid or charged for the tobacco product, which shall be collected in the manner provided in subsection b. of section 5 of this act.


C.26:2H-18.58g Disposition of revenue collected from cigarette tax.

      4.   Notwithstanding the provisions of any other law to the contrary, commencing July 1, 1998: after the deposit required pursuant to section 5 of P.L.1982, c.40 (C.54:40A-37.1), the first $150,000,000 of revenue collected annually from the cigarette tax imposed pursuant to P.L.1948, c.65 (C.54:40A-1 et seq.) and the first $5,000,000 of revenue collected annually from the "Tobacco Products Wholesale Sales and Use Tax," P.L.1990, c.39 (C.54:40B-1 et seq.), shall be deposited in to the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58); and the next $50,000,000 of revenue collected annually from the cigarette tax imposed pursuant to P.L.1948, c.65 (C.54:40A-1 et seq.) shall be deposited in the School Construction and Renovation Fund as shall be established by law.


      5.   This act shall take effect on January 1, 1998 and section 3 shall apply to tobacco products delivered on or after that date.


      Approved December 19, 1997.