New Mexico 2025 Regular Session

New Mexico Senate Bill SB20 Compare Versions

Only one version of the bill is available at this time.

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28	28	SENATE BILL 20
29	29	57
30	30	TH LEGISLATURE
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33	33	STATE
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35	35	OF
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39	39	MEXICO
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42	42	FIRST SESSION
43	43	,
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45	45	2025
46	46	INTRODUCED BY
47	47	Martin Hickey
48	48	FOR THE REVENUE STABILIZATION AND TAX POLICY COMMITTEE
49	49	AN ACT
50	50	RELATING TO TAXATION; INCREASING THE RATE OF THE CIGARETTE TAX
51	51	AND PROPORTIONALLY ADJUSTING THE DISCOUNTS ON CIGARETTE TAX
52	52	STAMPS; INCREASING THE RATE OF THE TOBACCO PRODUCTS TAX;
53	53	INCLUDING NICOTINE, REGARDLESS OF SOURCE, IN THE DEFINITION OF
54	54	"TOBACCO PRODUCT" IN THE TOBACCO PRODUCTS TAX ACT; DISTRIBUTING
55	55	THE REVENUE FROM THE INCREASES IN THE TAXES TO A NEW NICOTINE
56	56	USE PREVENTION AND CONTROL FUND; MAKING AN APPROPRIATION.
57	57	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
58	58	SECTION 1. [NEW MATERIAL] NICOTINE USE PREVENTION AND
59	59	CONTROL FUND.--The "nicotine use prevention and control fund"
60	60	is created in the state treasury. The fund consists of
61	61	appropriations, donations, interest from investment of the fund
62	62	and other money distributed to the fund. The fund shall be
63	63	administered by the department of health, and money in the fund
64	64	.229292.2 underscored material = new
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91	91	is subject to appropriation by the legislature to provide funds
92	92	to that department to, in collaboration with the public
93	93	education department and the higher education department,
94	94	develop programs, educational materials and social and
95	95	traditional media advertising on nicotine use prevention and
96	96	control for persons five to twenty-five years of age.
97	97	Disbursements from the fund shall be made by warrant of the
98	98	secretary of finance and administration pursuant to vouchers
99	99	signed by the secretary of health or the secretary's designee.
100	100	Any unexpended balance remaining at the end of a fiscal year
101	101	shall revert to the general fund.
102	102	SECTION 2. Section 7-1-6.11 NMSA 1978 (being Laws 1983,
103	103	Chapter 211, Section 16, as amended) is amended to read:
104	104	"7-1-6.11. DISTRIBUTIONS OF CIGARETTE TAXES.--
105	105	A. A distribution pursuant to Section 7-1-6.1 NMSA
106	106	1978 shall be made to the board of regents of the university of
107	107	New Mexico for the benefit of the comprehensive cancer center
108	108	at the university of New Mexico health sciences center in an
109	109	amount equal to seventy-one hundredths percent of the net
110	110	receipts, exclusive of penalties and interest, attributable to
111	111	the cigarette tax.
112	112	B. A distribution pursuant to Section 7-1-6.1 NMSA
113	113	1978 in an amount equal to [seven and fifty-two hundredths ]
114	114	five and one-half percent of the net receipts, exclusive of
115	115	penalties and interest, attributable to the cigarette tax,
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144	144	shall be made on behalf of and for the benefit of the
145	145	university of New Mexico health sciences center for its
146	146	comprehensive cancer center, until payment of all principal,
147	147	interest and other expenses or obligations related to the bonds
148	148	authorized pursuant to Section [3 of this 2021 act ] 6-21-6.15
149	149	NMSA 1978 and the New Mexico finance authority certifies to the
150	150	secretary of taxation and revenue that all obligations for the
151	151	bonds have been fully discharged, to the credit enhancement
152	152	account.
153	153	C. A distribution pursuant to Section 7-1-6.1 NMSA
154	154	1978 in an amount equal to [three and seventeen hundredths ] two
155	155	and seven-tenths percent of the net receipts, exclusive of
156	156	penalties and interest, attributable to the cigarette tax shall
157	157	be made to the New Mexico finance authority for land
158	158	acquisition and the planning, designing, construction and
159	159	equipping of department of health facilities or improvements to
160	160	such facilities.
161	161	D. A distribution pursuant to Section 7-1-6.1 NMSA
162	162	1978 in an amount equal to [eight and twenty-six hundredths ]
163	163	six and three-tenths percent of the net receipts, exclusive of
164	164	penalties and interest, attributable to the cigarette tax shall
165	165	be made to the New Mexico finance authority for deposit in the
166	166	credit enhancement account created in the authority.
167	167	E. A distribution pursuant to Section 7-1-6.1 NMSA
168	168	1978 in an amount equal to fifty-three hundredths percent of
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197	197	the net receipts, exclusive of penalties and interest,
198	198	attributable to the cigarette tax shall be made, on behalf of
199	199	and for the benefit of the rural county cancer treatment fund,
200	200	to the New Mexico finance authority.
201	201	F. A distribution pursuant to Section 7-1-6.1 NMSA
202	202	1978 in an amount equal to twenty-eight and one-half percent of
203	203	the net receipts attributable to the cigarette tax shall be
204	204	distributed to the nicotine use prevention and control fund. "
205	205	SECTION 3. A new section of the Tax Administration Act is
206	206	enacted to read:
207	207	"[NEW MATERIAL] DISTRIBUTION--TOBACCO PRODUCTS
208	208	TAX--NICOTINE USE PREVENTION AND CONTROL FUND.--A distribution
209	209	pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the
210	210	nicotine use prevention and control fund in an amount equal to
211	211	sixty-five percent of the net receipts attributable to the
212	212	tobacco products tax."
213	213	SECTION 4. Section 7-12-3 NMSA 1978 (being Laws 1971,
214	214	Chapter 77, Section 3, as amended) is amended to read:
215	215	"7-12-3. EXCISE TAX ON CIGARETTES--REDUCTION OF RATE FOR
216	216	CERTAIN CIGARETTES.--
217	217	A. For the privilege of selling, giving or
218	218	consuming cigarettes in New Mexico, there is levied an excise
219	219	tax at a rate of [ten cents ($.10) ] fifteen cents ($.15) for
220	220	each cigarette sold, given or consumed in this state.
221	221	B. The tax imposed by this section shall be
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250	250	referred to as the "cigarette tax".
251	251	C. The tax imposed by this section shall be reduced
252	252	by fifty percent for a cigarette for which a modified risk
253	253	tobacco product order has been issued by the United States
254	254	secretary of health and human services pursuant to Section 21
255	255	U.S.C. 387k(g)(1).
256	256	D. The tax imposed by this section shall be reduced
257	257	by twenty-five percent for a cigarette for which a modified
258	258	risk tobacco product order has been issued by the United States
259	259	secretary of health and human services pursuant to Section 21
260	260	U.S.C. 387k(g)(2)."
261	261	SECTION 5. Section 7-12-7 NMSA 1978 (being Laws 1971,
262	262	Chapter 77, Section 7, as amended) is amended to read:
263	263	"7-12-7. SALE OF STAMPS--PRICES.--
264	264	A. Only the department shall sell stamps. Stamps
265	265	may be sold by the department only to a distributor.
266	266	B. Stamps shall display a serial number. Stamps
267	267	bearing the same serial number shall not be sold to more than
268	268	one distributor. The department shall keep records of the
269	269	serial numbers of the stamps provided to each distributor.
270	270	C. A stamp shall be affixed to a package of
271	271	cigarettes in such a manner as to clearly display the serial
272	272	number at the point of sale.
273	273	D. Tax stamps shall be sold at their face value
274	274	with the following discounts:
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303	303	(1) [forty-six] thirty-one hundredths percent
304	304	less than the face value of the first thirty thousand dollars
305	305	($30,000) of stamps purchased in one calendar month;
306	306	(2) [thirty-six] twenty-four hundredths
307	307	percent less than the face value of the second thirty thousand
308	308	dollars ($30,000) of stamps purchased in one calendar month;
309	309	and
310	310	(3) [twenty-two] fifteen hundredths percent
311	311	less than the face value of stamps purchased in excess of sixty
312	312	thousand dollars ($60,000) in one calendar month.
313	313	E. Tax-credit stamps shall be provided only to
314	314	distributors and shall be provided free of charge; provided
315	315	that the distributor is in full compliance with the reporting
316	316	requirements of the Cigarette Tax Act and rules adopted
317	317	pursuant to that act.
318	318	F. If the face value of tax stamps sold in a single
319	319	sale is less than one thousand dollars ($1,000), the discount
320	320	provided for in this section shall not be allowed.
321	321	G. Payment for tax stamps shall be made on or
322	322	before the twenty-fifth day of the month following the month in
323	323	which the sale of stamps by the department is made.
324	324	H. Tax-exempt stamps shall be provided only to
325	325	distributors and shall be free of charge; provided that the
326	326	distributor is in full compliance with the reporting
327	327	requirements of the Cigarette Tax Act and rules adopted
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356	356	pursuant to that act."
357	357	SECTION 6. Section 7-12A-2 NMSA 1978 (being Laws 1986,
358	358	Chapter 112, Section 3, as amended) is amended to read:
359	359	"7-12A-2. DEFINITIONS.--As used in the Tobacco Products
360	360	Tax Act:
361	361	A. "department" means the taxation and revenue
362	362	department, the secretary or any employee of the department
363	363	exercising authority lawfully delegated to that employee by the
364	364	secretary;
365	365	B. "cigar" means a roll for smoking made wholly or
366	366	in part of tobacco and weighing greater than four and one-half
367	367	pounds per thousand;
368	368	C. "distribute" means to sell or to give;
369	369	D. "closed system cartridge" means a single-use,
370	370	pre-filled disposable cartridge containing five milliliters or
371	371	less of e-liquid for use in an e-cigarette;
372	372	E. "e-cigarette" means [any electronic oral device,
373	373	whether composed of a heating element and battery or an
374	374	electronic circuit, that provides a vapor of nicotine or any
375	375	other substance the use or inhalation of which simulates
376	376	smoking and includes any such device, or any part thereof,
377	377	whether manufactured, distributed, marketed or sold as an
378	378	e-cigarette, e-cigar, e-pipe or any other product, name or
379	379	descriptor. "E-cigarette" does not include any product
380	380	regulated as a drug or device by the United States food and
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409	409	drug administration under the Federal Food, Drug, and Cosmetic
410	410	Act] a device that can be used to deliver aerosolized or
411	411	vaporized nicotine to the person inhaling from the device and
412	412	includes any component, part or accessory of such a device that
413	413	is used during the operation of the device but does not include
414	414	a battery or battery charger ;
415	415	F. "e-liquid" means liquid or other substance
416	416	intended for use in an e-cigarette [not including any substance
417	417	containing cannabis or oil derived from cannabis ];
418	418	G. "engaging in business" means carrying on or
419	419	causing to be carried on any activity with the purpose of
420	420	direct or indirect benefit;
421	421	H. "first purchaser" means a person engaging in
422	422	business in New Mexico that manufactures tobacco products or
423	423	that purchases or receives on consignment tobacco products from
424	424	any person outside of New Mexico, which tobacco products are to
425	425	be distributed in New Mexico in the ordinary course of
426	426	business;
427	427	I. "little cigar" means a roll for smoking made
428	428	wholly or in part of tobacco, using an integrated cellulose
429	429	acetate or other similar filter, and weighing not more than
430	430	four and one-half pounds per thousand;
431	431	J. "person" means any individual, estate, trust,
432	432	receiver, cooperative association, club, corporation, company,
433	433	firm, partnership, joint venture, syndicate, limited liability
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462	462	company, limited liability partnership, other association or
463	463	gas, water or electric utility owned or operated by a county or
464	464	municipality or other entity of the state; "person" also means,
465	465	to the extent permitted by law, a federal, state or other
466	466	governmental unit or subdivision or an agency, department or
467	467	instrumentality;
468	468	[K. "product value" means the amount paid, net of
469	469	any discounts taken and allowed, for tobacco products or, in
470	470	the case of tobacco products received on consignment, the value
471	471	of the tobacco products received or, in the case of tobacco
472	472	products manufactured and sold in New Mexico, the proceeds from
473	473	the sale by the manufacturer of the tobacco products; and
474	474	L.] K. "tobacco product":
475	475	(1) means:
476	476	[(1) any] (a) a product, other than
477	477	cigarettes, [cigars and little cigars ] made from or containing
478	478	tobacco or nicotine, whether natural or synthetic, that is
479	479	intended for human consumption or is likely to be consumed,
480	480	whether smoked, heated, chewed, absorbed, dissolved or inhaled ;
481	481	[(2)] (b) e-liquid;
482	482	[(3)] (c) e-cigarettes; and
483	483	[(4)] (d) closed system cartridges; and
484	484	(2) does not mean a product regulated as a
485	485	drug or device by the United States food and drug
486	486	administration pursuant to the Federal Food, Drug, and Cosmetic
487	487	.229292.2
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515	515	Act; and
516	516	L. "wholesale price" means the amount paid, net of
517	517	any discounts taken and allowed, for tobacco products or, in
518	518	the case of tobacco products received on consignment, the value
519	519	of the tobacco products received or, in the case of tobacco
520	520	products manufactured and sold in New Mexico, the proceeds from
521	521	the sale by the manufacturer of the tobacco products ."
522	522	SECTION 7. Section 7-12A-3 NMSA 1978 (being Laws 1986,
523	523	Chapter 112, Section 4, as amended) is amended to read:
524	524	"7-12A-3. IMPOSITION AND RATES OF TAX--REDUCTION OF RATE
525	525	FOR CERTAIN TOBACCO PRODUCTS--DENOMINATION AS "TOBACCO PRODUCTS
526	526	TAX"--DATE PAYMENT OF TAX DUE.--
527	527	A. For the manufacture or acquisition of tobacco
528	528	products in New Mexico [not including cigars, little cigars, e-
529	529	liquid, e-cigarettes or closed system cartridges ] to be
530	530	distributed in the ordinary course of business and for the
531	531	consumption of tobacco products in New Mexico, there is imposed
532	532	an excise tax at the rate of [twenty five ] sixty-seven and
533	533	one-half percent of the [product value ] wholesale price of the
534	534	tobacco products; provided that for the following tobacco
535	535	products, the rate shall be:
536	536	(1) for cigars, thirty-seven and one-half
537	537	percent, not to exceed one dollar fifty cents ($1.50) per
538	538	cigar; and
539	539	(2) for little cigars, the rate equal to the
540	540	.229292.2
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568	568	rate imposed on cigarettes pursuant to Section 7-12-3 NMSA
569	569	1978.
570	570	[B. For the manufacture or acquisition of cigars in
571	571	New Mexico to be distributed in the ordinary course of business
572	572	and for the consumption of cigars in New Mexico, there is
573	573	imposed an excise tax at a rate equal to twenty-five percent of
574	574	the product value of the cigar, not to exceed fifty cents
575	575	($.50) per cigar.
576	576	C. For the manufacture or acquisition of little
577	577	cigars in New Mexico to be distributed in the ordinary course
578	578	of business and for the consumption of little cigars in New
579	579	Mexico, there is imposed an excise tax at a rate equal to the
580	580	rate imposed on cigarettes pursuant to Section 7-12-3 NMSA 1978
581	581	per package of little cigars.
582	582	D. For the manufacture or acquisition of e-liquid
583	583	in New Mexico to be distributed in the ordinary course of
584	584	business and for the consumption of e-liquid in New Mexico,
585	585	there is imposed an excise tax at a rate equal to twelve and
586	586	one-half percent of the product value of the e-liquid.
587	587	E. For the manufacture or acquisition of closed
588	588	system cartridges in New Mexico to be distributed in the
589	589	ordinary course of business, there is imposed an excise tax at
590	590	a rate of fifty cents ($.50) per closed system cartridge.
591	591	H.] B. The taxes imposed by this section may be
592	592	referred to as the "tobacco products tax".
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621	621	[I.] C. The tobacco products tax shall be paid by
622	622	the first purchaser on or before the twenty-fifth day of the
623	623	month following the month in which the taxable event occurs."
624	624	SECTION 8. Section 7-12A-4 NMSA 1978 (being Laws 1986,
625	625	Chapter 112, Section 5, as amended) is amended to read:
626	626	"7-12A-4. EXEMPTION--TOBACCO PRODUCTS TAX.--
627	627	A. Exempted from the tobacco products tax is the
628	628	[product value] wholesale price of tobacco products sold:
629	629	(1) to or by the United States or any agency
630	630	or instrumentality thereof;
631	631	(2) to the governing body or any enrolled
632	632	tribal member licensed by the governing body of an Indian
633	633	nation, tribe or pueblo to be distributed on the reservation or
634	634	pueblo grant of that Indian nation, tribe or pueblo; or
635	635	(3) to the state of New Mexico or any
636	636	political subdivision thereof.
637	637	B. As used in this section, the term "agency or
638	638	instrumentality" does not include persons who are agents or
639	639	instrumentalities of the United States for a particular purpose
640	640	or only when acting in a particular capacity or corporate
641	641	agencies or instrumentalities."
642	642	SECTION 9. Section 7-12A-5 NMSA 1978 (being Laws 1986,
643	643	Chapter 112, Section 6) is amended to read:
644	644	"7-12A-5. DEDUCTION--INTERSTATE SALES.--The [product
645	645	value] wholesale price of tobacco products sold and shipped or
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659	659	11
660	660	12
661	661	13
662	662	14
663	663	15
664	664	16
665	665	17
666	666	18
667	667	19
668	668	20
669	669	21
670	670	22
671	671	23
672	672	24
673	673	25
674	674	given and shipped to a person in another state may be deducted
675	675	from the [product value ] wholesale price subject to the tax
676	676	imposed by the Tobacco Products Tax Act; provided that the
677	677	department may require the person to submit proof satisfactory
678	678	to the department that the tobacco products have been sold and
679	679	shipped or given and shipped to a person in another state."
680	680	SECTION 10. APPROPRIATION.--Five hundred thousand dollars
681	681	($500,000) is appropriated from the general fund to the
682	682	regulation and licensing department for expenditure in fiscal
683	683	year 2026 to expand the department's licensure and enforcement
684	684	duties in regard to nicotine sales and use. Any unexpended or
685	685	unencumbered balance remaining at the end of fiscal year 2026
686	686	shall revert to the general fund.
687	687	SECTION 11. EFFECTIVE DATE.--The effective date of the
688	688	provisions of this act is July 1, 2025.
689	689	- 13 -
690	690	.229292.2