Session of 1998
By Committee on Assessment and Taxation
            9             AN ACT relating to the taxation of cigarettes; increasing the rate thereof;
10             amending K.S.A. 79-3310 and 79-3311 and repealing the existing
11             sections.
13       Be it enacted by the Legislature of the State of Kansas:
14           Section 1. K.S.A. 79-3310 is hereby amended to read as follows:
15       79-3310. There is imposed a tax upon all cigarettes sold, distributed or
16       given away within the state of Kansas. The rate of such tax shall be $.24
17       $.74 on each 20 cigarettes or fractional part thereof or $.30 $.925 on each
18       25 cigarettes, as the case requires. Such tax shall be collected and paid
19       to the director as provided in this act. Such tax shall be paid only once
20       and shall be paid by the wholesale dealer first receiving the cigarettes as
21       herein provided.
22           The taxes imposed by this act are hereby levied upon all sales of ciga-
23       rettes made to any department, institution or agency of the state of Kan-
24       sas, and to the political subdivisions thereof and their departments, insti-
25       tutions and agencies.
26           Sec. 2. K.S.A. 79-3311 is hereby amended to read as follows: 79-
27       3311. The director shall design and designate indicia of tax payment to
28       be affixed to each package of cigarettes as provided by this act. The di-
29       rector shall sell water applied stamps only to licensed wholesale dealers
30       in the amounts of 1,000 or multiples thereof. Stamps applied by the heat
31       process shall be sold only in amounts of 30,000 or multiples thereof,
32       except that such stamps which are suitable for packages containing 25
33       cigarettes each shall be sold in amounts prescribed by the director. Meter
34       imprints shall be sold only in amounts of 10,000 or multiples thereof.
35       Water applied stamps in amounts of 10,000 or multiples thereof and
36       stamps applied by the heat process and meter imprints shall be supplied
37       to wholesale dealers at a discount of 2.65% .086% from the face value
38       thereof, and shall be deducted at the time of purchase or from the re-
39       mittance therefor as hereinafter provided. Any wholesale cigarette dealer
40       who shall file with the director a bond, of acceptable form, payable to the
41       state of Kansas with a corporate surety authorized to do business in Kan-
42       sas, shall be permitted to purchase stamps, and remit therefor to the
43       director within 30 days after each such purchase, up to a maximum out-

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  1       standing at any one time of 85% of the amount of the bond. Failure on
  2       the part of any wholesale dealer to remit as herein specified shall be cause
  3       for forfeiture of such dealer's bond. All revenue received from the sale
  4       of such stamps or meter imprints shall be remitted to the state treasurer
  5       daily. Upon receipt thereof, the state treasurer shall deposit the entire
  6       amount thereof in the state treasury. The state treasurer shall first credit
  7       such amount thereof as the director shall order to the cigarette tax refund
  8       fund and shall credit the remaining balance to the state general fund. A
  9       refund fund designated the cigarette tax refund fund not to exceed
10       $10,000 at any time shall be set apart and maintained by the director from
11       taxes collected under this act and held by the state treasurer for prompt
12       payment of all refunds authorized by this act. Such cigarette tax refund
13       fund shall be in such amount as the director shall determine is necessary
14       to meet current refunding requirements under this act.
15           The wholesale cigarette dealer shall affix to each package of cigarettes
16       stamps or tax meter imprints required by this act prior to the sale of
17       cigarettes to any person, by such dealer or such dealer's agent or agents,
18       within the state of Kansas. The director is empowered to authorize whole-
19       sale dealers to affix revenue tax meter imprints upon original packages of
20       cigarettes and is charged with the duty of regulating the use of tax meters
21       to secure payment of the proper taxes. No wholesale dealer shall affix
22       revenue tax meter imprints to original packages of cigarettes without first
23       having obtained permission from the director to employ this method of
24       affixation. If the director approves the wholesale dealer's application for
25       permission to affix revenue tax meter imprints to original packages of
26       cigarettes, the director shall require such dealer to file a suitable bond
27       payable to the state of Kansas executed by a corporate surety authorized
28       to do business in Kansas. The director may, to assure the proper collection
29       of taxes imposed by the act, revoke or suspend the privilege of imprinting
30       tax meter imprints upon original packages of cigarettes. All meters shall
31       be under the direct control of the director, and all transfer assignments
32       or anything pertaining thereto must first be authorized by the director.
33       All inks used in the stamping of cigarettes must be of a special type
34       devised for use in connection with the machine employed and approved
35       by the director. All repairs to the meter are strictly prohibited except by
36       a duly authorized representative of the director. Requests for service shall
37       be directed to the director. Meter machine ink imprints on all packages
38       shall be clear and legible. If a wholesale dealer continuously issues illeg-
39       ible cigarette tax meter imprints, it shall be considered sufficient cause
40       for revocation of such dealer's permit to use a cigarette tax meter.
41           A licensed wholesale dealer may, for the purpose of sale in another
42       state, transport cigarettes not bearing Kansas indicia of tax payment
43       through the state of Kansas provided such cigarettes are contained in

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  1       sealed and original cartons.
  2           New Sec. 3. On or before June 30, 1998, each wholesale dealer, retail
  3       dealer and vending machine operator shall file a report with the director
  4       in such form as the director may prescribe showing cigarettes, cigarette
  5       stamps and meter imprints on hand at 12:01 a.m. on June 1, 1998. A tax
  6       of $.50 on each 20 cigarettes or fractional part thereof or $.625 on each
  7       25 cigarettes, as the case requires and $.50 or $.625, as the case requires
  8       upon all tax stamps and all meter imprints purchased from the director
  9       and not affixed to cigarettes prior to June 1, 1998, is hereby imposed and
10       shall be due and payable on or before June 30, 1998. The tax imposed
11       upon such cigarettes, tax stamps and meter imprints shall be imposed
12       only once under this act. The director shall remit all moneys collected
13       pursuant to this section to the state treasurer who shall credit the entire
14       amount thereof to the state general fund.
15           Sec. 4. K.S.A. 79-3310 and 79-3311 are hereby repealed.
16           Sec. 5. This act shall take effect and be in force from and after June
17       1, 1998, and its publication in the Kansas register.