Local Governments May Regulate Nicotine Products

Regulation of cigarettes, tobacco products, or nicotine products - local government regulation - state cigarette tax revenue apportionment to local governments - local governments' special sales taxes. Sections 1, 2, and 4 of the act authorize a county to enact a resolution or ordinance that prohibits a minor from possessing or purchasing cigarettes, tobacco products, or nicotine products. Sections 1 and 2 also authorize a county to impose regulations on cigarettes, tobacco products, or nicotine products that are more stringent than statewide regulations, including prohibiting sales to a person under 21 years of age, and section 4 expressly authorizes a county to enact a resolution or ordinance regulating the sale of cigarettes, tobacco products, or nicotine products to minors. Section 3 expressly authorizes a statutory or home rule city or town to enact an ordinance regulating the sale of cigarettes, tobacco products, or nicotine products to minors.

From state income tax money, the state currently apportions an amount equal to 27% of state cigarette tax revenues to cities, towns, and counties in proportion to the amount of state sales tax revenues collected within their boundaries. In order to receive their allocation of this money, cities, towns, and counties are prohibited from imposing their own fees, licenses, or taxes on cigarette sales or from attempting to impose a tax on cigarettes. Section 5 removes this prohibition with respect to fees or licenses that a city, town, or county imposes or with respect to a tax that a city, town, or county attempts to impose, thus allowing cities, towns, and counties to impose fees or licenses or to attempt to impose taxes on cigarette sales without losing their apportioned state cigarette tax revenues. A city, town, or county that successfully imposes a tax on cigarette sales loses its apportioned state cigarette tax revenues.

Section 6 authorizes a statutory or home rule city or town, city and county, or county, if approved by a vote of the people within the statutory or home rule city or town, city and county, or county, to impose a special sales tax on the sale of cigarettes, tobacco products, or nicotine products. Section 6 also provides a mechanism by which a county's special sales tax applies to a municipality within the boundary of the county unless the municipality, if approved by a vote of the people within the municipality, enacts its own such special sales tax; however, the county and municipality may then enter into an intergovernmental agreement authorizing the county to continue to levy, collect, and enforce its special sales tax within the corporate limits of the municipality.
(Note: This summary applies to this bill as enacted.)