Rep. Barbieri & Sen. Henry
Reps. Heffernan, Jaques, Potter; Sens. Blevins, Lopez, Townsend
HOUSE OF REPRESENTATIVES
147th GENERAL ASSEMBLY
HOUSE BILL NO. 138
AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO TAXES ON TOBACCO PRODUCTS.
Section 1. Amend § 5301, Title 30 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:
§ 5301. Definitions.
As used in this chapter:
(1) "Affixing agent" means any tobacco products dealer or any other person within or without this State appointed by the Department of Finance as an agent to affix the stamps to be used in paying the excise tax imposed by this chapter. The first vendor who has possession of unstamped tobacco products in this State for sale in this State shall be deemed an affixing agent.
(2) "Cigarette" means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape, and irrespective of the tobacco being flavored, adulterated or mixed with any other ingredient, the wrapper or cover of which is made of paper or any other substance or material except tobacco.
(3) "Consumer" means any person who has possession of tobacco products for any purpose other than transportation or sale.
(4) "Department of Finance" or "Department" means the Department of Finance.
(5) "Distributor" means:
a. Any person engaged in the business of selling tobacco products in this State who brings or causes to be brought into this State from without the State any tobacco products for sale;
b. Any person who makes, manufactures or fabricates tobacco products in this State for sale in this State;
c. Any person engaged in the business of selling tobacco products without this State who ships or transports tobacco products to retail dealers in this State to be sold by those retail dealers.
"Moist snuff" means any finely cut, ground or powdered tobacco that
is not intended to be smoked but shall not include any finely cut, ground or
powdered tobacco that is intended to be placed in the nasal cavity. (7)(6)
"Package" or "pack" means, as to cigars, the smallest
individual container which contains more than 1 cigar in or from which retail
sales are normally made or intended to be made, and means, as to other tobacco
products, the smallest individual container in or from which retail sales of
such products are normally made or intended to be made. (8)(7)
“Place of business” means any place where tobacco products are sold, or where
tobacco products are bought or kept for the purpose of sale or consumption,
including, so far as applicable, any vessel, airplane, train or vending machine
dispensing tobacco products. (9)(8)
"Retail dealer" means any person who purchases or receives stamped
tobacco products from any source whatsoever for the purpose of sale to the
ultimate consumer. (10)
(9) "Sale" means in addition to its usual meaning, any sale,
transfer, exchange, theft, barter, gift or offer for sale and distribution, in
any manner or by any means whatsoever. (11)
(10) "Secretary of Finance" or "Secretary" means the
Secretary of Finance or the Secretary's duly authorized designee; provided,
that any such delegation of authority is consistent with Chapter 83 of Title
"Smokeless tobacco products" mean all products, other than moist
snuff, made primarily of tobacco for individual consumption, not intended to be
"Tobacco products" means all products, including but not limited to,
cigarettes, cigars and pipe tobacco, made primarily from tobacco for individual
(11) “Tobacco products” means any product containing, made, or derived from tobacco that is intended for human consumption, whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or any component, part, or accessory of a tobacco product, including but not limited to: cigarettes; cigars; little cigars; cheroots; stogies; periques; granulated plug cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; Cavendish; plug and twist tobacco, fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other forms of tobacco; but does not include any tobacco product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product, as a tobacco dependence product, or for other medical purposes, and is being marketed and sold solely for such an approved purpose.
"Tobacco product tax stamps" means any adhesive stamps, tax meter
impression or other stamps, labels or prints authorized by the Department of
Finance to evidence the payment of the tax imposed by this chapter. (15)(13)
"Tobacco product vending machine" means any mechanical device from
which tobacco products are dispensed for a consideration. (16)(14)
"Unstamped tobacco products" means any pack or package of tobacco
products to which the proper amount of genuine Delaware tobacco product tax
stamps has not been affixed. (17)(15)
"Use" means the exercise of any right or power over tobacco products
including the retention for any length of time for any purpose other than sale
or transportation as allowed under the provisions of this chapter. (18)(16)
"Vending machine operator" means any person who places 1 or more
vending machines, owned, leased or operated by the person, at locations where
tobacco products are sold therefrom. The owner or lessee of the premises upon
which a vending machine is placed shall not be considered the operator of the
machine, if the owner or lessee does not own or lease the machine and if the
sole remuneration therefrom is a flat rental fee or a commission, based upon
the number or value of tobacco products sold from the machine, or a combination
of both. (19)(17)
"Wholesale dealer" means any person who regularly sells tobacco
products within this State to others who buy for the purpose of resale.
Section 2. Amend § 5305, Title 30 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:
§ 5305. Levy of tax, limitation; exemption.
(a) An excise tax is imposed and assessed upon the sale or use of cigarettes within this State at the rate of 80.0 mills per cigarette. This tax shall apply only once to the same pack of cigarettes. In the event the tax computed according to this subsection results in a tax per pack or other unit of sale to which this tax applies involving a fraction of a cent, the tax applicable to that pack or other unit shall be computed by rounding the tax to the next higher whole cent.
A tax is imposed and assessed upon the sale or use of all tobacco products
moist snuff and cigarettes , and including, but not limited
to, smokeless tobacco products and cigars within this State at the rate of
15% 30% of the wholesale price on such products. In each fiscal year, all receipts in
excess of $3.5 million collected under this subsection shall be transferred to
The Delaware Health Fund created by § 137 of Title 16. (c)
A tax is imposed and assessed upon the sale or use of moist snuff within this
State at the rate of 54 cents per ounce and a proportionate tax at the like
rate on any fractional parts of an ounce. Such tax shall be computed based on
the net weight as listed by the manufacturer. (d)(c)
No tax imposed by this chapter shall be levied upon the possession or sale of
tobacco products which this State is prohibited from taxing under the
Constitution or statutes of the United States. (e)(d)
If the seller and purchaser have registered with the Department and obtained
exemption certificates, the following sales are exempt:
(1) Sales to veterans' organizations approved by the Department, if the tobacco products are being purchased by the organization for gratuitous issue to veteran patients in federal, state or state-aided hospitals;
(2) Sales to patients in Veterans' Administration Hospitals by retail dealers located in such hospitals.
For purposes of this chapter:
(1) The term "cigar" means any roll for smoking which is not a cigarette and which is made wholly or in part of tobacco or any substitute therefor when the cover of the roll is made chiefly of tobacco.
The term "wholesale price" shall mean the price for which a
manufacturer sells a tobacco product to a distributor exclusive of any
discount, rebate or other reduction
Section 3. This Act shall become effective for tax periods beginning after December 31, 2013.
This youth tobacco prevention bill eliminates the taxing disparity between moist snuff and “other tobacco products,” not including cigarettes. It also raises the tax rate from 15% to 30% of the wholesale price, and designates tax revenue over $3.5 million to The Delaware Health Fund. This bill does not affect taxes on cigarettes. This bill attempts to make moist snuff and other tobacco products less attractive to minors by making them more expensive, as well as designating a new funding source for The Delaware Health Fund, which promotes preventive care for Delawareans in order to detect and avoid adverse health conditions.