BILL NUMBER: AB 2001 CHAPTERED 07/12/06 CHAPTER 70 FILED WITH SECRETARY OF STATE JULY 12, 2006 APPROVED BY GOVERNOR JULY 12, 2006 PASSED THE SENATE JUNE 29, 2006 PASSED THE ASSEMBLY APRIL 17, 2006 AMENDED IN ASSEMBLY MARCH 22, 2006 AMENDED IN ASSEMBLY MARCH 13, 2006 INTRODUCED BY Assembly Member Cogdill FEBRUARY 9, 2006 An act to amend and repeal Sections 30142, 30168, and 30182 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST AB 2001, Cogdill Cigarettes and tobacco products. The Cigarette and Tobacco Products Tax Law requires distributors and wholesalers of cigarette and tobacco products to be licensed by the State Board of Equalization. The Cigarette and Tobacco Products Tax Law also requires a tax imposed by that law with respect to distributions of cigarettes to be paid by distributors through the use of stamps or meter register settings, and requires that these stamps or meter register settings be affixed to each package of cigarettes sold. Existing law requires all distributors of cigarette and tobacco products that are required to be licensed by the State Board of Equalization to furnish a $1,000 security deposit. Existing law, until January 1, 2007, requires a distributor, that defers payments for stamps or meter register settings and elects to make those payments on a twice-monthly basis, to furnish a security deposit of at least 50% of, but not more than twice the amount of, stamps and meter register settings, for which payment is deferred. For calendar years beginning on and after January 1, 2007, the amount of the security deposit is increased to 70% of, but not more than twice the amount of, stamps and meter register settings for which payment is deferred. Existing law allows a distributor, who defers payment, to post a security deposit in cash, or a cash equivalent, or surety bond. Existing law, until January 1, 2007, requires distributors that defer payments for stamps and meter register settings to elect to remit those payments either on a monthly or on a twice-monthly basis. For calendar years beginning on and after January 1, 2007, the payments are required to be made on or before the 25th day of the month following the month in which the payments are deferred. Existing law, until January 1, 2007, requires distributors of cigarettes and tobacco products that elect to defer payments on a twice-monthly basis to file the report on or before the 5th day of the month following the month during which the cigarettes or tobacco products were distributed. For calendar years beginning on and after January 1, 2007, those reports are required to be filed on or before the 25th day of the month following the month during which the cigarettes or tobacco products were distributed. This bill would delete the repeal dates specified in existing law, extending the operation of the deferred-payment option. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 30142 of the Revenue and Taxation Code, as amended by Section 1 of Chapter 867 of the Statutes of 2003, is amended to read: 30142. (a) The board shall fix the amount of the security required of any distributor and may increase or reduce the amount at any time. A minimum security in the amount of one thousand dollars ($1,000) shall be furnished by every distributor that is required to be licensed. (b) If a distributor desires to defer payments for stamps or meter register settings, as provided in Article 2 (commencing with Section 30166) of Chapter 3.5, the board shall require a security as follows: (1) If a distributor elects, under Section 30168, to make payments on a monthly basis, the board shall require a security equal to not less than 70 percent of the amount and no more than twice the amount, as fixed by the board, of the distributor's purchases of stamps and meter register settings for which payment may be deferred. (2) If a distributor elects, under Section 30168, to make payments on a twice-monthly basis, the board shall require a security equal to not less than 50 percent of the amount and no more than twice the amount, as fixed by the board, of the distributor's purchases of stamps and meter register settings for which payment may be deferred. (c) The security required by the board pursuant to subdivision (b) may be in the form of any of the following, in the amount required by paragraph (1) or (2) of subdivision (b): (1) Cash, or a cash equivalent. (2) A surety bond. SEC. 2. Section 30142 of the Revenue and Taxation Code, as added by Section 2 of Chapter 867 of the Statutes of 2003, is repealed. SEC. 3. Section 30168 of the Revenue and Taxation Code, as amended by Section 3 of Chapter 867 of the Statutes of 2003, is amended to read: 30168. (a) Amounts owing for stamps and meter register settings purchased on the deferred-payment basis in any calendar month shall be due and payable on a monthly basis, in the manner elected pursuant to subdivision (b), during the month following the calendar month in which the stamps and meter register settings were purchased. Payment shall be made by a remittance payable to the board. (b) A distributor shall elect to make the payment required by subdivision (a) on either a monthly or a twice-monthly basis. An election made pursuant to this subdivision shall remain in effect for at least one year from the date the election is made. If the board finds that good cause exists for a distributor's inability to maintain the election for the full year, the board shall authorize the distributor to make a new election, as otherwise authorized by this subdivision, prior to the expiration of the one-year period following the prior election. (1) If a distributor elects to make the payment required by subdivision (a) on a monthly basis, the distributor shall remit the payment on or before the 25th day of the month following the month in which the stamps and meter register settings were purchased. (2) If a distributor elects to make the payment required by subdivision (a) on a twice-monthly basis, the distributor shall make two remittances during the month following the month in which the stamps and meter register settings were purchased. The first monthly remittance shall be made on or before the fifth day of the month and shall be equal to either one-half of the total amount of those purchases of stamps and meter register settings that were made during the preceding month or the total amount of those purchases of stamps and meter register settings that were made between the first day and the 15th day of the preceding month, whichever is greater. The second monthly remittance shall be made on or before the 25th day of the month for the remainder of those purchases of stamps and meter register settings that were made in the preceding month. SEC. 4. Section 30168 of the Revenue and Taxation Code, as added by Section 4 of Chapter 867 of the Statutes of 2003, is repealed. SEC. 5. Section 30182 of the Revenue and Taxation Code, as amended by Section 7 of Chapter 867 of the Statutes of 2003, is amended to read: 30182. (a) Except as provided in subdivision (b), every distributor shall file, on or before the 25th day of each month, a report in the form as prescribed by the board, that may include, but not be limited to, electronic media with respect to distributions of cigarettes and purchases of stamps and meter register units during the preceding month and any other information as the board may require to carry out this part. (b) Every distributor that elects, pursuant to Section 30168, to make deferred payments on a twice-monthly basis shall file a report in the form as prescribed by the board, that may include, but not be limited to, electronic media, with respect to distributions of cigarettes and purchases of stamps and meter register units during the month following the month in which the distribution occurred and the stamps and meter register settings were purchased, and any other information as the board may require to carry out this part. The monthly report shall be filed on or before the fifth day of the month with respect to those distributions of cigarettes and purchases of stamps and meter register settings that were made during the preceding month. (c) Reports shall be authenticated in a form, or pursuant to, methods as may be prescribed by the board. SEC. 6. Section 30182 of the Revenue and Taxation Code, as added by Section 8 of Chapter 867 of the Statutes of 2003, is repealed.