Virginia Senate Bill SB748

Virginia 2022 Regular Session

• Introduced: 1/21/22
• Refer: 1/21/22
• Report Pass: 2/1/22
• Engrossed: 2/3/22
• Refer: 2/18/22
• Report Pass: 2/21/22
• Enrolled: 2/28/22
• Chaptered: 4/27/22

Caption

Tobacco products tax; remote retail sales.

Impact

If passed, SB748 will significantly impact state laws governing the sale of tobacco products, particularly those sold remotely. The bill formalizes the state's authority to impose taxes on sales made over the internet, which aligns with a growing trend of states looking to capture revenue from online sales. By requiring remote vendors to obtain licenses and comply with age verification processes, the bill ensures that the sales of tobacco products are regulated and that the state can effectively monitor and control these transactions. This also includes specific penalties for non-compliance aimed at maintaining the integrity of the tax system.

Summary

Senate Bill 748 (SB748) seeks to implement a tax on tobacco products sold through remote retail sales in the Commonwealth. The bill establishes a taxation structure specifically targeting sales of cigars and pipe tobacco, whereby a distributor or remote retail seller is liable for the excise tax upon each sale. This legislation introduces specific tax rates based on the product type and encourages compliance by mandating rigorous record-keeping and reporting from remote sellers to ensure proper tax collection. Moreover, it aims to streamline the registration of remote sellers and distributors, ensuring that all operations comply with state laws.

Sentiment

Discussions surrounding SB748 have shown a generally favorable sentiment among legislators who advocate for increased tax revenues and regulatory measures targeted at tobacco sales. Supporters argue that the bill not only facilitates additional funding for public health initiatives related to tobacco use but also enforces necessary regulations that could deter underage access to tobacco products. Critics, however, raise concerns about the burden that increased reporting and licensing might place on small businesses, potentially limiting their ability to compete with larger players in the market.

Contention

One notable point of contention is the balance between ensuring compliance and not over-regulating remote sellers, which could lead to an unintentional drawback in market participation. The bill specifies various record-keeping requirements and penalties for failure to comply, including potential criminal charges for fraud, which some legislators argue could lead to an intimidating atmosphere for small remote retailers who may lack the resources to navigate these new regulations effectively. The overall debate encapsulates larger discussions around taxation and regulation in the digital market landscape.