SB 20 — INCREASE CIGARETTE & TOBACCO PRODUCTS TAXES

Stamps may be sold by the department only to a distributor.

e t 17 B.

Stamps shall display a serial number.

Stamps w l n d 18 bearing the same serial number shall not be sold to more than = = 19 a l one distributor.

The department shall keep records of the i a e r 20 serial numbers of the stamps provided to each distributor.

a t m m 21 C.

A stamp shall be affixed to a package of d r e 22 cigarettes in such a manner as to clearly display the serial c e s k 23 number at the point of sale.

e a n b 24 D.

Tax stamps shall be sold at their face value u [ with the following discounts:

.229292.2 - 5 - (1) [forty-six] thirty-one hundredths percent less than the face value of the first thirty thousand dollars ($30,000) of stamps purchased in one calendar month;

(2) [thirty-six] twenty-four hundredths percent less than the face value of the second thirty thousand dollars ($30,000) of stamps purchased in one calendar month;

and (3) [twenty-two] fifteen hundredths percent less than the face value of stamps purchased in excess of sixty thousand dollars ($60,000) in one calendar month.

E.

Tax-credit stamps shall be provided only to distributors and shall be provided free of charge;

provided that the distributor is in full compliance with the reporting requirements of the Cigarette Tax Act and rules adopted pursuant to that act.

F.

If the face value of tax stamps sold in a single e t 17 sale is less than one thousand dollars ($1,000), the discount w l n d 18 provided for in this section shall not be allowed.

= = 19 a l G.

Payment for tax stamps shall be made on or i a e r 20 before the twenty-fifth day of the month following the month in a t m m 21 which the sale of stamps by the department is made.

d r e 22 H.

Tax-exempt stamps shall be provided only to c e s k 23 distributors and shall be free of charge;

provided that the e a n b 24 distributor is in full compliance with the reporting u [ requirements of the Cigarette Tax Act and rules adopted .229292.2 - 6 - pursuant to that act." SECTION 6.

Section 7-12A-2 NMSA 1978 (being Laws 1986, Chapter 112, Section 3, as amended) is amended to read:

"7-12A-2.

DEFINITIONS.--As used in the Tobacco Products Tax Act:

A.

"department" means the taxation and revenue department, the secretary or any employee of the department exercising authority lawfully delegated to that employee by the secretary;

B.

"cigar" means a roll for smoking made wholly or in part of tobacco and weighing greater than four and one-half pounds per thousand;

C.

14 D.

e t 17 E.

"e-cigarette" means [any electronic oral device, w l n d 18 whether composed of a heating element and battery or an = = 19 electronic circuit, that provides a vapor of nicotine or any a l i a e r 20 other substance the use or inhalation of which simulates a t m m 21 smoking and includes any such device, or any part thereof, d r e 22 whether manufactured, distributed, marketed or sold as an c e s k 23 e-cigarette, e-cigar, e-pipe or any other product, name or e a n b 24 descriptor.

"E-cigarette" does not include any product u [ regulated as a drug or device by the United States food and .229292.2 - 7 - drug administration under the Federal Food, Drug, and Cosmetic e t 17 Act] a device that can be used to deliver aerosolized or w l n d 18 vaporized nicotine to the person inhaling from the device and = = 19 includes any component, part or accessory of such a device that a l i a e r 20 is used during the operation of the device but does not include a t m m 21 a battery or battery charger;

d r e 22 F.

"e-liquid" means liquid or other substance c e s k 23 intended for use in an e-cigarette [not including any substance e a n b 24 containing cannabis or oil derived from cannabis];

u [ G.

"engaging in business" means carrying on or .230746.2 - 3 - STBTC/SB 20 causing to be carried on any activity with the purpose of direct or indirect benefit;

"first purchaser" means a person engaging in 14 business in New Mexico that manufactures tobacco products or that purchases or receives on consignment tobacco products from any person outside of New Mexico, which tobacco products are to e t 17 be distributed in New Mexico in the ordinary course of w l n d 18 business;

= = 19 I.

"little cigar" means a roll for smoking made a l i a e r 20 wholly or in part of tobacco, using an integrated cellulose a t m m 21 acetate or other similar filter, and weighing not more than d r e 22 four and one-half pounds per thousand;

c e s k 23 J.

"person""nicotine" means any individual, estate, trust, e a nform bof 24the receiver,chemical cooperativenicotine, association,including club,any corporation,salt company,or ucomplex, [regardless firm,of partnership,whether jointthe venture,chemical syndicate,is limitednaturally liability .229292.2 - 8 - company, limited liability partnership, other association or gas,synthetically waterderived, orand electricincludes utilitynicotinic ownedalkaloids orand operatednicotine byanalogs; a county or municipality or other entity of the state;

"person"e alsot means,17 to[J.] theK. extent permitted by law, a federal, state or other governmental unit or subdivision or an agency, department or instrumentality;

[K."person" means any individual, estate, w l n d 18 trust, receiver, cooperative association, club, corporation, = = 19 company, firm, partnership, joint venture, syndicate, limited a l i a e r 20 liability company, limited liability partnership, other a t m m 21 association or gas, water or electric utility owned or operated d r e 22 by a county or municipality or other entity of the state;

c e s k 23 "person" also means, to the extent permitted by law, a federal, e a n b 24 state or other governmental unit or subdivision or an agency, u [ department or instrumentality;

.230746.2 - 4 - STBTC/SB 20 [K.

and L.] K.L.

14 (1) means:

[(1) any] (a) a product, other than cigarettes, [cigars and little cigars] made from or containing e t 17 tobacco or nicotine, whether natural or synthetic, that is w l n d 18 intended for human consumption or is likely to be consumed, = = 19 whether smoked, heated, chewed, absorbed, dissolved or inhaled;

a l i a e r 20 [(2)] (b) e-liquid;

a t m m 21 [(3)] (c) e-cigarettes;

and d r e 22 [(4)] (d) closed system cartridges;

and c e st k17 23 (2) does not mean a product regulated as a ew al n bd 2418 drug or device by the United States food and drug u= [= 19 administration pursuant to the Federal Food, Drug, and Cosmetic .229292.2a -l 9i -a e r 20 Act;

and L.a t m m 21 M.

"wholesale price" means the amount paid, net of d r e 22 any discounts taken and allowed, for tobacco products or, in c e s k 23 the case of tobacco products received on consignment, the value e a n b 24 of the tobacco products received or, in the case of tobacco u [ products manufactured and sold in New Mexico, the proceeds from .230746.2 - 5 - STBTC/SB 20 the sale by the manufacturer of the tobacco products." SECTION 7.4.

For the manufacture or acquisition of tobacco 14 products in New Mexico [not including cigars, little cigars, e- liquid, e-cigarettes or closed system cartridges] to be distributed in the ordinary course of business and for the e t 17 consumption of tobacco products in New Mexico, there is imposed w l n d 18 an excise tax at the rate of [twenty five] sixty-sevenforty and = = 19 one-half percent of the [product value] wholesale price of the a l i a e r 20 tobacco products;

provided that for the following tobacco a t m m 21 products, the rate shall be:

d r e 22 (1) for cigars, thirty-seventwenty-five and one-half c e s k 23 percent, not to exceede onet dollar17 exceed fifty cents ($1.50)($.50) per e a n b 24 cigar;

and uw [l n d 18 (2) for little cigars, the rate equal to the .229292.2= -= 1019 - rate imposed on cigarettes pursuant to Section 7-12-3 NMSA a l i a e r 20 1978.

a t m m 21 [B.

For the manufacture or acquisition of cigars in d r e 22 New Mexico to be distributed in the ordinary course of business c e s k 23 and for the consumption of cigars in New Mexico, there is e a n b 24 imposed an excise tax at a rate equal to twenty-five percent of u [ the product value of the cigar, not to exceed fifty cents .230746.2 - 6 - STBTC/SB 20 ($.50) per cigar.

For the manufacture or acquisition of little cigars in New Mexico to be distributed in the ordinary course of business and for the consumption of little cigars in New Mexico, there is imposed an excise tax at a rate equal to the rate imposed on cigarettes pursuant to Section 7-12-3 NMSA 1978 14 per package of little cigars.

For the manufacture or acquisition of e-liquid in New Mexico to be distributed in the ordinary course of e t 17 business and for the consumption of e-liquid in New Mexico, w l n d 18 there is imposed an excise tax at a rate equal to twelve and = = 19 one-half percent of the product value of the e-liquid.

a l i a e r 20 E.

For the manufacture or acquisition of closed a t m m 21 system cartridges in New Mexico to be distributed in the d r e 22 ordinary course of business, there is imposed an excise tax at c e s k 23 a rate of fifty cents ($.50) per closed system cartridge.

e at n17 b 24 H.] B.

The taxes imposed by this section may be uw [l n d 18 referred to as the "tobacco products tax".

.229292.2= -= 1119 - [I.] C.

The tobacco products tax shall be paid by a l i a e r 20 the first purchaser on or before the twenty-fifth day of the a t m m 21 month following the month in which the taxable event occurs." d r e 22 SECTION 8.5.

Section 7-12A-4 NMSA 1978 (being Laws 1986, c e s k 23 Chapter 112, Section 5, as amended) is amended to read:

e a n b 24 "7-12A-4.

EXEMPTION--TOBACCO PRODUCTS TAX.-- u [ A.

Exempted from the tobacco products tax is the .230746.2 - 7 - STBTC/SB 20 [product value] wholesale price of tobacco products sold:

(2) to the governing body or any enrolled tribal member licensed by the governing body of an Indian nation, tribe or pueblo to be distributed on the reservation or 14 pueblo grant of that Indian nation, tribe or pueblo;

e t 17 B.

As used in this section, the term "agency or w l n d 18 instrumentality" does not include persons who are agents or = = 19 instrumentalities of the United States for a particular purpose a l i a e r 20 or only when acting in a particular capacity or corporate a t m m 21 agencies or instrumentalities." d r e 22 SECTION 9.6.

Section 7-12A-5 NMSA 1978 (being Laws 1986, c e s k 23 Chapter 112, Section 6) is amended to read:

e at n17 b 24 "7-12A-5.

DEDUCTION--INTERSTATE SALES.--The [product uw [l n d 18 value] wholesale price of tobacco products sold and shipped or .229292.2= -= 1219 - given and shipped to a person in another state may be deducted a l i a e r 20 from the [product value] wholesale price subject to the tax a t m m 21 imposed by the Tobacco Products Tax Act;

provided that the d r e 22 department may require the person to submit proof satisfactory c e s k 23 to the department that the tobacco products have been sold and e a n b 24 shipped or given and shipped to a person in another state." u [ SECTION 10.7.

APPROPRIATION.--FiveEFFECTIVE hundredDATE.--The thousandeffective dollarsdate ($500,000)of is appropriated from the general.230746.2 fund- to8 the- regulationSTBTC/SB and20 licensingprovisions departmentof forthis expenditureact inis fiscalJuly year1, 20262025. to expand the department's licensure and enforcement duties in regard to nicotine sales and use.

Any- unexpended9 or- unencumbered4 balance6 remaining8 at10 the12 end14 of16 fiscale yeart 202617 shallw revertl ton thed general18 fund.= = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 e a n b 24 u [ .230746.2

14 SECTION 11.

EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2025.

- 13 - e t 17 w l n d 18 = = 19 a l i a e r 20 a t m m 21 d r e 22 c e s k 23 e a n b 24 u [ .229292.2