Bill Description: House Bill 314 would impose new taxes, fees, and regulations on sellers of electronic smoking devices.

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Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

House Bill 314 would create Section 63-2552C, Idaho Code, to impose a new tax "upon the sale, use, handling, or distribution of all electronic smoking devices that contain nicotine in this state at the rate of three cents ($0.03) per milliliter of any solution or substance contained in or used with an electronic smoking device that contains nicotine and a proportionate tax at the like rate on all fractional parts of a milliliter thereof." 

The bill's fiscal note estimates this tax will cost taxpayers $1.4 million annually. 

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House Bill 314 would amend Section 63-2552B, Idaho Code, to require any person who purchases electronic smoking devices online or otherwise has them shipped from out of state (even for personal use) to pay a use tax (separate from normal sales tax) equivalent to the new tax imposed above. 

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In addition to imposing new taxes, House Bill 314 would amend Section 63-2554, Idaho Code, to require sellers of electronic smoking devices to obtain a permit from the state tax commission. This permit carries a $50 application fee.

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Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

In addition to imposing new taxes and fees and requiring a special permit, House Bill 314 would amend sections 63-2555 through 63-2559, Idaho Code, to impose a variety of recordkeeping mandates. Among the records required would be "itemized invoices" of all "electronic smoking devices held, purchased, manufactured, brought in or caused to be brought in from without the state, or shipped or transported to retailers in this state." Sellers would also be required to keep "records of all deliveries or shipments" and when selling to anyone other than the ultimate consumer, "render with each sale itemized invoices showing the seller's name and address, the purchaser's name and address, the date of sale, and all prices and discounts."

Sellers would be required to keep all records for a minimum of 5 years.

The bill also says, "At any time during usual business hours, the [tax] commission, or its duly authorized agents or employees, may enter any place of business of a distributor, without a search warrant, and inspect the premises, the records required to be kept under this chapter … and electronic smoking devices contained therein, to determine whether or not all the provisions of this chapter are being fully complied with."

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