FY2021-12 Amending Chapter 3.80 Excise Tax On Cigarettes and Tobacco Productions1
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Introduced by: Assembly Member Dennis Symmons
Drafted by: Borough Attorney, Scott Brandt-Erichsen
Introduced on: 07/16/2020
Postponed to: 08/20/2020
Postponed to: 09/17/2020
Public Hearing Date: 12/03/2020
Adopted on: 12/03/2020
KODIAK ISLAND BOROUGH
ORDINANCE NO. FY2021-12
AN ORDINANCE OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH AMENDING
KIBC TITLE 3 REVENUE AND FINANCE, CHAPTER 3.80 EXCISE TAX ON CIGARETTES
AND TOBACCO PRODUCTS SECTIONS .020 DEFINITIONS AND SECTION .030 EXCISE TAX
ON CIGARETTES AND TOBACCO PRODUCTS.
WHEREAS, the Kodiak Island Borough has authority granted to it by AS 29.35.010 to levy a
tax; and
WHEREAS, Ordinance No. FY2018-04 assessed a new excise tax on tobacco and tobacco
products effective October 1, 2017; and
WHEREAS, the fees of the Borough are to be reviewed annual per KIBC 3.10.190; and
WHEREAS, the assembly desires to increase the fee rate for tobacco and tobacco products.
WHEREAS, the assembly desires to expand the definition of 'other tobacco products',
NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
BOROUGH THAT:
Section 1: This ordinance is of permanent nature and shall become a part of the Kodiak
Island Borough Code of Ordinances.
Section 2: That Section 3.80.020 Definitions of the Kodiak Island Borough Code of
Ordinances is amended to read as follows:
The following words, terms, and phrases, when used in this chapter, shall have the meanings
ascribed to them in this section, except where the context clearly indicates a different meaning:
A. "Borough" means the Kodiak Island Borough, Alaska.
B. "Brought into or acquired" includes all manners, ways, and modes of bringing into or
obtaining cigarettes or tobacco products in the borough.
C. "Buyer" means a person who brings into or acquires in the borough cigarettes or other
tobacco products for his own consumption from any source other than a manufacturer,
distributor, direct -buying retailer or retailer.
Kodiak Island Borough, Alaska Ordinance No. FY2021-12
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D. "Cigarette' means a roll for smoking of any size or shape, made wholly or partly of tobacco,
whether the tobacco is flavored, adulterated, or mixed with another ingredient, if the
wrapper or cover of the roll is made of paper or a material other than tobacco.
E. "Department" means the borough finance department.
F. "Direct -buying retailer' means a person who is engaged in the sale of the cigarettes or
other tobacco products at retail in the borough, and who brings or causes them to be
brought into the borough.
G. "Distributor" means a person who brings cigarettes or other tobacco products or causes
them to be brought into the borough, and who sells or distributes them to others for resale
in the borough.
H. "Inventory count" means the effective date and details of a count by description, including
the trade name and brand, purchase price and total quantity on hand of all cigarettes and
other tobacco products. Detail must be subtotaled and distinguished between cigarettes
and other tobacco products which are taxable and cigarettes and other tobacco products
which were acquired exempt of the borough excise tax under this chapter.
I. "Licensee" means a person licensed under this chapter.
J. "Manufacturer' means a person who makes, fashions or produces cigarettes or other
tobacco products for sale to distributors or other persons within the borough.
K. "Other tobacco products" means:
a. A cigar;
b. A cheroot;
c. A stogie;
d. A perique;
e. Snuff and snuff flour;
f. Smoking tobacco, including granulated, plug -cut, crimp -cut and ready -rubbed
tobacco, and any form of tobacco suitable for smoking in a pipe or cigarette;
g. Chewing tobacco, including cavendish, twist, plug, or scrap tobacco and tobacco
suitable for chewing; or
h. An article or product made wholly or in part of tobacco or a tobacco substitute or
otherwise containinq nicotine that is expected or intended for human
consumption, whether smoked, heated, chewed, absorbed, dissolved,
inhaled or ingested by any other means, but not including a cigarette as defined
in this section or a tobacco substitute prescribed by a licensed physician or drugs,
devices or combination products authorized for sale by the United States
Food and Drug Administration, as those terms are defined in the Federal
Food, Drug and Cosmetic Act; or
i. Any Electronic Smoking Product as defined in AS 43.70.110, and any
noncombustible device that can be used to deliver aerosolized or vaporized
nicotine to the person inhaling from the device, including, but not limited to,
an e-cigarette, e-cigar, a -pipe, vape pen, or e-hookah. An electronic smoking
device includes any component, part, or accessory of such a device, whether
or not sold separately, and includes any substance intended to be
aerosolized or vaporized during the use of the device. Electronic smokinq
device does not include any battery or battery charger when sold separately.
In addition, electronic smoking device does not include drugs, devices or
combination products authorized for sale by the United States Food and
Kodiak Island Borough, Alaska
Ordinance No. FY2021-12
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Drug Administration, as those terms are defined in the Federal Food, Drug
and Cosmetic Act.
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L.
"Person' includes an individual, company, partnership, joint venture, joint agreement,
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association (mutual or otherwise), corporation, estate, trust, business trust, receiver or
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trustee, syndicate, or political subdivision of this state, or combination acting as a unit,
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including individuals who are employees or officers of any of the such entities who are
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under a duty to perform an act concerning which a violation of this chapter could occur. It
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is the intent of this chapter that such persons be personally liable for unremitted taxes.
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M.
"Place of business" means a place where cigarettes or other tobacco products are sold,
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or where they are brought or kept for the purpose of sale or consumption, including a
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vessel, vehicle, airplane or train.
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N.
"Purchase" means the acquisition of ownership or possession of cigarettes or other
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tobacco products from any source.
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O.
"Record" means a group of logically related fields of information concerning events
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affecting an organization, which is an integral part of an accounting information system,
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where separate, identifiable transaction data is entered as historical data.
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P.
"Retail" means a sale to a consumer or to any person for any purpose other than for resale.
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Q.
"Retailer" means a person in the borough who is engaged in the business of selling
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cigarettes or other tobacco products at retail.
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R.
"Sale" includes a sale, barter, exchange and every other manner of transferring the
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ownership of personal property.
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S.
"Tax' means the cigarette and other tobacco products excise tax assessed pursuant to
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this chapter.
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T.
"Tax return' means the quarterly report to be submitted to the department as required by
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this chapter.
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U.
"Vending machine operator" means a person who brings or causes cigarettes or tobacco
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products to be brought into the borough and who owns or operates a vending machine
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that dispenses cigarettes, whether the vending machine is installed on the person's own
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premises or installed elsewhere.
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V.
"Wholesale price" means the established price for which a manufacturer sells a tobacco
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product to a distributor or other person, after deduction of a discount or other reduction
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received by the distributor for quantity or cash. [Ord. FY2018-04 §2, 2017].
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Section 3: That Section 3.08.030 Excise tax on cigarettes and other tobacco products of
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the Kodiak Island Borough Code of Ordinances is amended to read as follows:
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A.
Excise Tax on Cigarettes. The borough hereby levies an excise tax of $0. 5 $0.10 on
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each cigarette brought into the borough for distribution or sale in the borough beginning
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on ^^'„-oo be 4, 20 47. after January 1, 2021. Cigarettes upon which the tax is imposed are
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not again subject to the tax when acquired by another person.
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B.
Excise Tax on Other Tobacco Products. The borough hereby levies an excise tax on other
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tobacco products at the rate of 25 50 percent of the wholesale price of tobacco products
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brought into the borough for distribution or sale in the borough after 0GtebeT=017
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January 1, 2021.
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Kodiak Island Borough, Alaska Ordinance No. FY2021-12
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Section 4: That Section 3.08.030 Excise tax on cigarettes and other tobacco products of
the Kodiak Island Borough Code of Ordinances is amended to read as follows:
A. Excise Tax on Cigarettes. The borough hereby levies an excise tax of $0 05 $0.15 on
each cigarette brought into the borough for distribution or sale in the borough beginning
e^ ^^'goer 4�-2017; after July 1, 2021. Cigarettes upon which the tax is imposed are not
again subject to the tax when acquired by another person.
B. Excise Tax on Other Tobacco Products. The borough hereby levies an excise tax on other
tobacco products at the rate of 2-5 75 percent of the wholesale price of tobacco products
brought into the borough for distribution or sale in the borough after ^^'oo neF 1, 201m July
1 2021.
Section 5: That Section 3.08.040 Exemptions of the Kodiak Island Borough Code of
Ordinances is amended to read as follows:
3.80.040 Exemptions.
The tax imposed under this chapter does not apply to:
A. Cigarettes and other tobacco products if the United States Constitution or other federal
laws prohibit the levying of this tax on such products within the borough.
B. Cigarettes and other tobacco products brought into the borough by an exchange,
commissary, or ship's stores operated by one of the uniformed services of the United
States as defined in 5 USC 2101.
Effective Date: That sections 1, 2, 3, and 5 of this ordinance shall become effective January 1,
2021, and section 4 of this ordinance shall take effect July 1, 2021.
ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
THIS THIRD DAY OF DECEMBER, 2020.
KODIAK ISLAND BOROUGH gVNNU e0
�� A EST:
William Roberts, Mayor
ise L. Rice, E
VOTES: q�'gSKM1�°fo�'
Ayes: Kavanaugh, Smith, Symmons, ams, Arndt, and Dvorak.
Noes:
Kodiak Island Borough, Alaska
Ordinance No. FY2021-12
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