STAND. COM. REP. 2649

Honolulu, Hawaii

, 2004

RE: S.B. No. 2840

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2840, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TOBACCO,"

begs leave to report as follows:

The purpose of this measure is to increase cigarette tax revenues by capturing tax revenues that are being evaded via the Internet, telephone sales, or mail order sales.

Your Committee finds that due to this State's high cost of cigarettes, smokers are gravitating toward telephone, mail, Internet, and other on-line cigarette purchases. These unregulated sources for cigarettes are resulting in a loss of revenue to the State and are a source from which minors can purchase cigarettes.

Your Committee believes that this measure will help in preventing further revenue loss and underage purchases by:

(1) Adding a new section to prohibit the distribution of untaxed cigarettes via telephone, mail order, the Internet, or other on-line sources;

(2) Clarifying the current law to provide more measures to regulate cigarette sales and provide criminal sanctions for noncompliance; and

(3) Requiring an external notice to be placed on the shipping container stating that this State prohibits the sale of cigarettes to minors and that the buyer is responsible for paying all applicable state taxes.

Your Committee has amended this measure by making technical, nonsubstantive changes.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2840, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2840, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair