§ 58.1-439.15:01. Tax incentives for use of domestic tobacco.
A. Definitions. - As used in this section, unless the context requires a different meaning:
"Domestic tobacco" means tobacco grown, produced, and processed entirely within the United States of America.
"Master Settlement Agreement" means the same as that term is defined in § 3.1-336.1.
"Small tobacco product manufacturer" means an entity making an assignment pursuant to § 3.1-336.2:1 that directly (and not exclusively through any affiliate) manufactures fewer than 5 billion cigarettes in the calendar year in which the assignment is made, whose manufactured cigarettes contain a minimum of 75 percent domestic tobacco, who is not participating in the Master Settlement Agreement, who is in compliance with all obligations imposed pursuant to Article 5 (§ 3.1-336.1 et seq.) and Article 6 (§ 3.1-336.3 et seq.) of Chapter 18 of Title 3.1, and who has executed an assignment and payment to the Commonwealth in accordance with Article 5.1 (§ 3.1-336.2:1 et seq.) of Chapter 18 of Title 3.1.
B. Any small tobacco product manufacturer who intends to apply for incentive payments pursuant to this section shall, by January 31 of the applicable year, provide in a written certification to the Department such information as the Department may require to establish: (i) the percentage of domestic tobacco contained in cigarettes produced by such manufacturer; and (ii) the amount paid for domestic tobacco purchased by the manufacturer on or after January 1, 2005, which was used by the manufacturer in manufacturing cigarettes in the immediately preceding year. For all such certifications made by an eligible manufacturer that are approved by the Department, the Department shall cause incentive payments to be made to the small tobacco product manufacturer. Incentive payments shall first be made pursuant to this section in calendar year 2007 for calendar year 2006 manufacturing.
The Tax Commissioner shall, as soon as practicable but no later than 30 days after the manufacturer's certification, make a written certification to the Comptroller of the amount of the incentive payment to be made to the small tobacco product manufacturer. As soon as practicable after receipt of the Tax Commissioner's certification, but no later than 15 days after receipt of such certification, the Comptroller shall draw his warrant from funds in the appropriate escrow account pursuant to §§ 3.1-336.2 and 3.1-336.2:2 on the Treasurer of Virginia in the proper amount in favor of the small tobacco product manufacturer.
C. 1. For incentive payments made in 2007 for calendar year 2006, the incentive payments shall equal the amount paid by the small tobacco product manufacturer for domestic tobacco that was purchased by the manufacturer on or after January 1, 2005, and was used by the manufacturer in manufacturing cigarettes in 2006, provided that the aggregate incentive payments for which a small tobacco product manufacturer may be eligible for such purchases shall not exceed a total sum equal to 25 percent of the amount that the manufacturer paid in calendar year 2005 into a qualified escrow account established pursuant to Article 5 (§ 3.1-336.1 et seq.) of Chapter 18 of Title 3.1 net of any escrow funds released and reverted back to the small tobacco product manufacturer that are attributable to calendar year 2005 escrow payments pursuant to subdivision B 2 of § 3.1-366.2 as it was in effect on June 30, 2005. The amount paid into a qualified escrow account in calendar year 2005 shall also include the amount that the small tobacco product manufacturer paid into a qualified escrow account for all calendar years prior to 2005 net of any escrow funds released and reverted back to the manufacturer for such years pursuant to subdivision B 2 of § 3.1-366.2 as it was in effect on June 30, 2005.
The aggregate amount of incentive payments to all small tobacco product manufacturers pursuant to this subdivision shall not exceed $9 million. However, if the amount of the incentive payments computed by the Tax Commissioner pursuant to the provisions of this subdivision without regard to such $9 million limitation is in excess of $9 million, the share of the $9 million to be paid to each qualifying small tobacco product manufacturer shall be determined as provided in subsection D.
2. For incentive payments made in 2008 for calendar year 2007, the incentive payments shall equal the amount paid by the small tobacco product manufacturer for domestic tobacco that was purchased by the manufacturer on or after January 1, 2005, and was used by the manufacturer in manufacturing cigarettes in 2007, provided that the aggregate incentive payments for which a small tobacco product manufacturer may be eligible for such purchases shall not exceed a total sum equal to 20 percent of the amount that the manufacturer paid in calendar year 2006 into a qualified escrow account established pursuant to Article 5 (§ 3.1-336.1 et seq.) of Chapter 18 of Title 3.1.
The aggregate amount of incentive payments to all small tobacco product manufacturers pursuant to this subdivision shall not exceed $8 million. However, if the amount of the incentive payments computed by the Tax Commissioner pursuant to the provisions of this subdivision without regard to such $8 million limitation is in excess of $8 million, the share of the $8 million to be paid to each qualifying small tobacco product manufacturer shall be determined as provided in subsection D.
3. For incentive payments made in 2009 for calendar year 2008, the incentive payments shall equal the amount paid by the small tobacco product manufacturer for domestic tobacco that was purchased by the manufacturer on or after January 1, 2005, and was used by the manufacturer in manufacturing cigarettes in 2008, provided that the aggregate incentive payments for which a small tobacco product manufacturer may be eligible for such purchases shall not exceed a total sum equal to 15 percent of the amount that the manufacturer paid in calendar year 2007 into a qualified escrow account established pursuant to Article 5 (§ 3.1-336.1 et seq.) of Chapter 18 of Title 3.1.
The aggregate amount of incentive payments to all small tobacco product manufacturers pursuant to this subdivision shall not exceed $6 million. However, if the amount of the incentive payments computed by the Tax Commissioner pursuant to the provisions of this subdivision without regard to such $6 million limitation is in excess of $6 million, the share of the $6 million to be paid to each qualifying small tobacco product manufacturer shall be determined as provided in subsection D.
4. For incentive payments made in 2010 for calendar year 2009, the incentive payments shall equal the amount paid by the small tobacco product manufacturer for domestic tobacco that was purchased by the manufacturer on or after January 1, 2005, and was used by the manufacturer in manufacturing cigarettes in 2009, provided that the aggregate incentive payments for which a small tobacco product manufacturer may be eligible for such purchases shall not exceed a total sum equal to 10 percent of the amount that the manufacturer paid in calendar year 2008 into a qualified escrow account established pursuant to Article 5 (§ 3.1-336.1 et seq.) of Chapter 18 of Title 3.1.
The aggregate amount of incentive payments to all small tobacco product manufacturers pursuant to this subdivision shall not exceed $4 million. However, if the amount of the incentive payments computed by the Tax Commissioner pursuant to the provisions of this subdivision without regard to such $4 million limitation is in excess of $4 million, the share of the $4 million to be paid to each qualifying small tobacco product manufacturer shall be determined as provided in subsection D.
5. For incentive payments made in 2011 for calendar year 2010, the incentive payments shall equal the amount paid by the small tobacco product manufacturer for domestic tobacco that was purchased by the manufacturer on or after January 1, 2005, and was used by the manufacturer in manufacturing cigarettes in 2010, provided that the aggregate incentive payments for which a small tobacco product manufacturer may be eligible for such purchases shall not exceed a total sum equal to five percent of the amount that the manufacturer paid in calendar year 2009 into a qualified escrow account established pursuant to Article 5 (§ 3.1-336.1 et seq.) of Chapter 18 of Title 3.1.
The aggregate amount of incentive payments to all small tobacco product manufacturers pursuant to this subdivision shall not exceed $3 million. However, if the amount of the incentive payments computed by the Tax Commissioner pursuant to the provisions of this subdivision without regard to such $3 million limitation is in excess of $3 million, the share of the $3 million to be paid to each qualifying small tobacco product manufacturer shall be determined as provided in subsection D.
6. For incentive payments made in 2012 for calendar year 2011, the incentive payments shall equal the amount paid by the small tobacco product manufacturer for domestic tobacco that was purchased by the manufacturer on or after January 1, 2005, and was used by the manufacturer in manufacturing cigarettes in 2011, provided that the aggregate incentive payments for which a small tobacco product manufacturer may be eligible for such purchases shall not exceed a total sum equal to five percent of the amount that the manufacturer paid in calendar year 2010 into a qualified escrow account established pursuant to Article 5 (§ 3.1-336.1 et seq.) of Chapter 18 of Title 3.1.
The aggregate amount of incentive payments to all small tobacco product manufacturers pursuant to this subdivision shall not exceed $3 million. However, if the amount of the incentive payments computed by the Tax Commissioner pursuant to the provisions of this subdivision without regard to such $3 million limitation is in excess of $3 million, the share of the $3 million to be paid to each qualifying small tobacco product manufacturer shall be determined as provided in subsection D.
7. No incentive payments shall be made in calendar years subsequent to 2012.
D. If the aggregate amount of the incentive payments to all small tobacco product manufacturers to be made in any calendar year exceeds the aggregate limitation for incentive payments for the year, the payment to each qualifying small tobacco product manufacturer for such year shall be a pro rata share of such aggregate limitation based upon the amount of the incentive payment that would have been made to each qualifying manufacturer for such year if there were no such aggregate limitation.
E. A small tobacco product manufacturer shall not be eligible for any incentive payment under this section for purchases of domestic tobacco that is grown by an agent or director of the small tobacco product manufacturer.
F. The provisions of Chapter 18 (§ 58.1-1800 et seq.) shall apply to the administration of this section, mutatis mutandis.
(2005, cc. 899, 901.)
Sections: Previous 58.1-439.11 58.1-439.12 58.1-439.12:01 58.1-439.12:02 58.1-439.13 58.1-439.14 58.1-439.15 58.1-439.15:01 58.1-439.16 58.1-439.17 58.1-439.18 58.1-439.19 58.1-439.20 58.1-439.21 58.1-439.22 NextLast modified: April 16, 2009