Sec. 3. 36 MRSA §4404, as amended by PL 1987, c. 497, §46, is further amended to read:

§4404. Returns; payment of tax and penalty

Every distributor, or retailer and unclassified importer subject to the licensing requirement of section 4402 shall on or before the last day of each month render submit, on forms to be a form prescribed and furnished by the tax assessor State Tax Assessor, a report together with payment of the tax due under this chapter to the tax assessor stating the quantity and the wholesale sale price of all tobacco products held, purchased, manufactured, brought in or caused to be brought in from without outside the State or shipped or transported to retailers within the State during the preceding calendar month. Every such distributor or, retailer and unclassified importer shall keep a complete and accurate record at his its principal place of business to substantiate all receipts of tobacco products; this record shall be preserved for a period of 2 years in such manner as to insure premanency and accessibility for inspection.

Such monthly reports shall must contain such further information as the tax assessor shall State Tax Assessor may prescribe and shall must show a credit for any tobacco products exempted as provided in section 4403. Records shall must be maintained to substantiate the exemption. Tobacco products previously taxed which that are returned to a manufacturer because the product has become unfit for use of, sale or consumption or unsalable may be taken as a credit on a subsequent return upon receipt of the credit notice from the original supplier.

FISCAL NOTE

2001-02 2002-03

REVENUES

General Fund $55,251 $84,244

Other Funds 92 204

The clarification that retailers that bring tobacco products into the State are obligated to obtain licenses and report and

pay the tax on those tobacco products will result in increases in General Fund revenue totalling $55,251 in fiscal year 2001-02 and $84,244 in fiscal year 2002-03.

The increased collections of the tobacco products tax will increase General Fund revenue by $53,040 and $79,950 in fiscal years 2001-02 and 2002-03, respectively. General Fund revenue from the issuance of new tobacco products licenses will increase by $500 annually beginning in fiscal year 2001-02.

The bill will increase sales and use tax collections by $1,803 in fiscal year 2001-02 and $3,998 in fiscal year 2002-03. The increase of these tax collections will increase the amounts transferred to the Local Government Fund for state-municipal revenue sharing in those years by $92 and $204, respectively. The resulting net increase of General Fund revenue will be $1,711 in fiscal year 2001-02 and $3,794 in fiscal year 2002-03.

SUMMARY

This bill clarifies the obligation of retailers that bring tobacco products into the State on which a tax has not been paid to obtain a license and report and pay the tax on those tobacco products.