Delaware 149th General Assembly (2017-2018) Status: Passed Senate 3 R cosponsors

SB 67 — AN ACT TO AMEND TITLE 11 AND TITLE 30 OF THE DELAWARE CODE RELATING TO TOBACCO PRODUCTS.

Last action — Reported Out of Committee (Judiciary) in House with 4 Favorable, 6 On Its Merits

  1. ✓
    Introduced
  2. ✓
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 149th General Assembly (2017-2018). It reached “Passed Senate” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there are no live odds of enactment. It would have to be reintroduced in the current session to move again.

Summary

Tobacco traffickers move black market contraband cigarettes or other tobacco products purchased from low tax states to be sold in higher tax states, facilitated by individuals or through organized groups. The potential financial gain of tobacco smuggling is immediately apparent. Legal entities pay significant taxes on their product, including $1.01 per pack in federal excise tax; $1.60 per pack of 20 cigarettes and a 15% tax rate of the wholesale purchase price of other tobacco products in Delaware state tax; and typically $0.60 per pack to a settlement fund for health care costs incurred by the states because of tobacco use by their citizens. Manufacturers and distributors of contraband tobacco products reap substantial profits by avoiding federal and state excise taxes. Because of the tremendous profits often associated with cigarette trafficking, organized criminal groups use the proceeds to launder or conceal the proceeds of other criminal offenses. Delaware law currently allows up to 9 packs of cigarettes to be brought into the state without requiring them to be taxed by Delaware; all cigarettes over 9 packs must be taxed. For example, when 2 full cartons, which equate 20 packs, are brought into Delaware, a tax on all 20 packs must be paid to the Division of Revenue. The current penalty for selling, acquiring, holding, owning, or possessing cigarettes is a fine of up to $1,000, imprisonment of up to 90 days in jail, or both. The existing penalty is not in proportion to the profits made through trafficking, and does not serve as a deterrent. This Act establishes that offenses related to cigarette trafficking are class G felonies, and increases the penalties for cigarette trafficking as follows (“the updated penalties”): (1) For the first offense, by a fine of not less than $250 per package but not more than $10,000 total, imprisonment of up to 2 years, or both. (2) For a subsequent offense, by a fine of not less than $350 per package but not more than $30,000 total, imprisonment of up to 2 years, or both. (3) Mandatory seizure of a vehicle used in the first or subsequent offenses. This Act also increases from 10 to 20 the number of packs of cigarettes a person may possess on which the Delaware tax has not been paid or tax stamp has not been affixed. Cigarette trafficking is addressed in both Title 11 and Title 30 of the Delaware Code. To implement the updated penalties, this Act amends the following statutes: (1) Title 11, § 1121, by providing that violation of § 1120(a), which prohibits the sale of a tobacco product unless it has the required tax stamp, is subject to the updated penalties. See Section 1 of this Act. (2) Title 11, §§ 2322 and 2326, by adding § 1120(a) to the list of offenses for which a vehicle may be seized. See Sections 2 and 3 of this Act. (3) Title 30, § 5328, by providing that a person who possesses or transports 21 or more packs of unstamped tobacco products in this State to delivery, sell, or dispose of tobacco products and does not have in their possession invoices or delivery tickets and purchase orders is subject to the updated penalties. See Section 4 of this Act. (4) Title 30, § 5341, by providing that the following offenses are subject to the updated penalties: a. Sale or any pack of tobacco product to which the proper amount of Delaware tax stamps is not affixed. b. A dealer’s refusal to allow the Department of Finance to examine the dealer’s books and records, stock, premises, or equipment. c. Making, forging, altering, or counterfeited a tax stamp to evade the tobacco product tax. See Section 5 of this Act. (5) Title 30, § 5342, by providing that a person who possesses 21 or more packs of unstamped tobacco products, or a dealer who has at the dealer’s place of business any tobacco product that does not have the proper amount stamps or a product for which the tax has not been paid within 72 hours of receiving the product is subject to the updated penalties. See Section 6 of this Act. (6) Title 30, § 5346(b), by providing that a person who sells, acquires, holds, owns, or possesses a cigarette package to which a tax stamp is affixed in violation of a specified list of conditions listed in § 5346(a) is subject to the updated penalties. See Section 7 of this Act. This Act also makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual. This Act takes effect 60 days after the date of enactment.

Bill Text

Action History

  1. Reported Out of Committee (Judiciary) in House with 4 Favorable, 6 On Its Merits

  2. Assigned to Judiciary Committee in House

  3. Passed By Senate. Votes: 20 YES 1 ABSENT

  4. Reported Out of Committee (Judicial & Community Affairs) in Senate with 3 On Its Merits

  5. Introduced and Assigned to Judicial & Community Affairs Committee in Senate

Sponsors

Sponsorship breakdown

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2 sponsors · 3 co-sponsors · 57 not signed on

Sponsors (2)

Co-sponsors (3)

Not signed on (57)

57 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

SM

Passed 20 Yea · 0 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 11001
Democratic 5000
Republican 4000
Total 20001
% of votes cast 95%0%0%5%
How each member voted (21)
Member Party Vote
Anthony Delcollo — Yea
Brian J. Bushweller — Yea
Bruce C. Ennis — Yea
Catherine Cloutier — Yea
Colin Bonini — Yea
David B. McBride — Yea
Ernesto B Lopez — Yea
F. Gary Simpson — Yea
Gregory F. Lavelle — Yea
Harris B. McDowell — Not Voting
Margaret Rose Henry — Yea
Robert Marshall — Yea
Bryan Townsend Democratic Yea
David P. Sokola Democratic Yea
John "Jack" Walsh Democratic Yea
Nicole Poore Democratic Yea
Stephanie L. Hansen Democratic Yea
Brian Pettyjohn Republican Yea
Bryant L. Richardson Republican Yea
Dave G. Lawson Republican Yea
Gerald W. Hocker Republican Yea

Official roll call →

Subjects

public-safety taxation civil-rights
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Frequently asked questions

What does SB 67 do?
Tobacco traffickers move black market contraband cigarettes or other tobacco products purchased from low tax states to be sold in higher tax states, facilitated by individuals or through organized groups. The potential financial gain of tobacco smuggling is immediately apparent. Legal entities pay significant taxes on their product, including $1.01 per pack in federal excise tax; $1.60 per pack of 20 cigarettes and a 15% tax rate of the wholesale purchase price of other tobacco products in Delaware state tax; and typically $0.60 per pack to a settlement fund for health care costs incurred by the states because of tobacco use by their citizens. Manufacturers and distributors of contraband tobacco products reap substantial profits by avoiding federal and state excise taxes. Because of the tremendous profits often associated with cigarette trafficking, organized criminal groups use the proceeds to launder or conceal the proceeds of other criminal offenses. Delaware law currently allows up to 9 packs of cigarettes to be brought into the state without requiring them to be taxed by Delaware; all cigarettes over 9 packs must be taxed. For example, when 2 full cartons, which equate 20 packs, are brought into Delaware, a tax on all 20 packs must be paid to the Division of Revenue. The current penalty for selling, acquiring, holding, owning, or possessing cigarettes is a fine of up to $1,000, imprisonment of up to 90 days in jail, or both. The existing penalty is not in proportion to the profits made through trafficking, and does not serve as a deterrent. This Act establishes that offenses related to cigarette trafficking are class G felonies, and increases the penalties for cigarette trafficking as follows (“the updated penalties”): (1) For the first offense, by a fine of not less than $250 per package but not more than $10,000 total, imprisonment of up to 2 years, or both. (2) For a subsequent offense, by a fine of not less than $350 per package but not more than $30,000 total, imprisonment of up to 2 years, or both. (3) Mandatory seizure of a vehicle used in the first or subsequent offenses. This Act also increases from 10 to 20 the number of packs of cigarettes a person may possess on which the Delaware tax has not been paid or tax stamp has not been affixed. Cigarette trafficking is addressed in both Title 11 and Title 30 of the Delaware Code. To implement the updated penalties, this Act amends the following statutes: (1) Title 11, § 1121, by providing that violation of § 1120(a), which prohibits the sale of a tobacco product unless it has the required tax stamp, is subject to the updated penalties. See Section 1 of this Act. (2) Title 11, §§ 2322 and 2326, by adding § 1120(a) to the list of offenses for which a vehicle may be seized. See Sections 2 and 3 of this Act. (3) Title 30, § 5328, by providing that a person who possesses or transports 21 or more packs of unstamped tobacco products in this State to delivery, sell, or dispose of tobacco products and does not have in their possession invoices or delivery tickets and purchase orders is subject to the updated penalties. See Section 4 of this Act. (4) Title 30, § 5341, by providing that the following offenses are subject to the updated penalties: a. Sale or any pack of tobacco product to which the proper amount of Delaware tax stamps is not affixed. b. A dealer’s refusal to allow the Department of Finance to examine the dealer’s books and records, stock, premises, or equipment. c. Making, forging, altering, or counterfeited a tax stamp to evade the tobacco product tax. See Section 5 of this Act. (5) Title 30, § 5342, by providing that a person who possesses 21 or more packs of unstamped tobacco products, or a dealer who has at the dealer’s place of business any tobacco product that does not have the proper amount stamps or a product for which the tax has not been paid within 72 hours of receiving the product is subject to the updated penalties. See Section 6 of this Act. (6) Title 30, § 5346(b), by providing that a person who sells, acquires, holds, owns, or possesses a cigarette package to which a tax stamp is affixed in violation of a specified list of conditions listed in § 5346(a) is subject to the updated penalties. See Section 7 of this Act. This Act also makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual. This Act takes effect 60 days after the date of enactment.
Who sponsors SB 67?
SB 67 is sponsored by Brian Pettyjohn (Republican), Timothy D. Dukes (Republican), Dave G. Lawson (Republican), William R. Outten, and Ruth Briggs King.
What is the current status of SB 67?
This bill died with 149th General Assembly (2017-2018). It reached “Passed Senate” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track SB 67?
Track SB 67 free on One Click Politics — get push/email alerts when it moves.

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