Bill Description: House Bill 331 would expand the definition of tobacco products to allow the 40% tax imposed on them to also apply to all "electronic smoking products and devices," even if such devices are not used for tobacco. It would redistribute the increased tax revenue to a property tax relief fund.
NOTE: House Bill 331 is related to House Bill 199, introduced earlier this session.
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 331 would amend Section 63-2551, Idaho Code, which is the definitions section of the law imposing an unwarranted torrent of taxes on this category of consumer products.
The bill would declare that "electronic smoking products and devices" are "tobacco products" if they are "brought into this state from without the state for sale;" "made, manufactured, or fabricated in this state for sale in this state;" or "shipped or transported to retailers in this state, to be sold by those retailers."
The bill would define "electronic smoking products and devices" as "any device that can be used to deliver aerosolized or vaporized substances to the person inhaling from the device, including but not limited to an electronic cigarette, electronic cigar, electronic pipe, electronic hookah, or vape pen. Electronic smoking products and devices 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.”
The bill would make exceptions for "any battery or battery charger when sold separately" and "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, 21 U.S.C. 301 et seq."
Vaping products should not be categorized as "smoking" products because they involve neither flame nor smoke.
Additionally, some vaping products and devices are not made or used for tobacco, yet this bill contains no exceptions for them. This means that a vaping device that is neither made or used for tobacco would be legally considered a "smoking device" and a "tobacco product" even though it is neither.
Even though vaping products and devices have only a limited limited nexus to tobacco products, this bill would incorrectly and illogically classify them in order to give government another way to impose additional taxes on a certain class of Idaho consumers.
Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?
Unlike House Bill 199, House Bill 331 contains a provision that would allocate the increased revenue anticipated from this tax hike (estimated at $10 - $15 million annually by the bill's fiscal note) to "the school district facilities fund, if established by the first regular session of the sixty-seventh Idaho legislature; otherwise, to the tax relief fund established pursuant to section 57-811, Idaho Code, for the purpose of school property tax relief to be determined by the legislature."
(The "school district facilities fund" would be established if House Bill 292 passes.)
The inclusion of this provision makes it clear that the anticipated tax revenue from this tax hike is not needed and serves no purpose related to enforcing the laws associated with regulating tobacco products.
Instead, under this law, Idahoans who choose to use vaping products as a far less harmful alternative to smoking tobacco would be heavily extorted and their money redistributed to property tax payers.
This bill would use a targeted tax policy to redistribute wealth away from consumers of a certain product disfavored by some in government.