Amends TCA Title 67.

Under present tobacco tax law, wholesale cost price means the manufacturers' or processors' actual sales price of any tobacco product, delivered to Tennessee dealers, exclusive of any discounts, rebates, allowances, or the privilege tax imposed by existing law. This bill provides that the wholesale cost price of open-system vapor products must be treated the same tobacco products are, as described above. As used in this bill, an "open-system vapor product" means any vapor product containing consumable material that can be opened by the consumer and refilled with consumable material. TAX IMPOSED Present law requires every dealer or distributor of tobacco products to pay the department of revenue ("department") for exclusive state purposes, taxes in addition to all other taxes or fees, for the privilege of selling cigarettes and tobacco products in this state. This bill removes the language above and requires, instead, that each dealer or distributor of tobacco products or vapor products must pay to the department, for exclusive state purposes, taxes in addition to all other taxes or fees for the privilege of selling cigarettes, tobacco products, and vapor products in this state. TAX LEVIED ON CONSUMER Present law provides that the tobacco tax is declared to be a levy on the consumer, and the consumer is liable for the tax and subject to the incidence of the tax. Present law also requires that the distributors must add the amount of tobacco taxes levied to the price of cigarettes or other tobacco products, and the distributor may state the amount of the taxes separately from the price of such cigarettes or other tobacco products on all price display signs, sales or delivery slips, bills and statements that advertise or indicate the price of such cigarettes or tobacco products. Finally, present law requires that the provisions mentioned above do not affect the method of collection of cigarette or tobacco taxes as now provided by existing law in any way. This bill provides that a vapor product tax must be treated in the same manner that a tobacco tax is treated as described above. RATE ON OTHER TOBACCO PRODUCTS Present law provides the rate all other tobacco products like cigars, cheroots, stogies, beedies, bidis, manufactured tobacco, and snuff of all descriptions made of tobacco or any substitute for tobacco, is 6.6 percent of the wholesale cost price. However, this does not apply to smokeless nicotine products. This bill adds to the existing law mentioned above by adding the following: (1) The rate on all closed-system vapor products is 15¢ per milliliter of consumable material and a proportionate tax at the like rate on all fractional parts thereof; and (2) The rate on all open-system vapor products is six and 6.6 percent of the wholesale cost price.