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| SPONSOR: | Feldman | DATE TYPED: | 02/04/00 | HB | |||
| SHORT TITLE: | Eliminate Volume Cigarette Discount | SB | 166 | ||||
| ANALYST: | Eaton | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY00 | FY2001 | |||
| $ 332.4 | Recurring | General Fund | ||
| $ 32.1 | Recurring | NMFA | ||
| $ 21.4 | Recurring | UNM Cancer Center | ||
| $ 42.8 | Recurring | Local Govt. GF | ||
| $ 21.4 | Recurring | Local Govt. Rec. | ||
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
This bill eliminates the price discount allowed cigarette distributors when they purchase cigarette tax stamps.
The value of the discount during fiscal year 1998-1999 was $550 thousand; however, there have been significant decreases in the volume of tax stamps sold since the Attorneys General Settlement Agreement and the resulting cigarette price increases imposed by manufacturers. A January, 2000 increase in the federal cigarette tax rate should contribute to further declines in the volume of tax stamps sold.
The current cigarette tax stamp discount is: 4% on the first $30,000 of stamps purchased in a month, 3% on the second $30,000 purchased, and 2% on purchases over $60,000. The overall effective discount rate for all distributors is currently about 2.6%.
FISCAL IMPLICATIONS
The total estimated impact in FY2001 is $450.0 thousand, affecting the general fund by approximately $332.0 thousand.
ADMINISTRATIVE IMPLICATIONS
Not significant.
JBE/gm