The Alabama House of Representatives on Thursday passed legislation giving the Alabama Department of Revenue more power to confiscate untaxed tobacco products.

House Bill 440 (HB440) is sponsored by State Rep. Kyle South (R-Fayette). Its companion bill in the Senate is Senate Bill 216 (SB216).

South explained that this bill was brought to him by the Alabama Department of Revenue.

“People are bringing in untaxed tobacco products and are selling [them] in the state,” South said. “What’s happening is that tobacco products are entering Alabama without the proper tax stamps.”

Investigators periodically find the outlawed tobacco products at retail stores.

“This eliminates the waiting period before they can confiscate the products,” South explained. “They can immediately confiscate them at the point that they find them if this passes.”

South explained that under the current situation, by the time that the Alabama Department of Revenue agents are finished with the statutorily required process to obtain permission to seize the products, many times the products are no longer there to seize.

Before passage of HB440, South asked that HB440 be replaced by SB216.

Senate Bill 216, as passed the Senate, would increase receipts to the State General Fund by an undetermined amount dependent upon the number and amount of civil penalties assessed against: (1) a non-registered seller who fails to obtain a tobacco account, and report the sales for resale and (2) the individuals that fail to present proof of destination of tobacco products.

The fiscal note was prepared by House Ways and Means General Fund Chairman Steve Clouse (R-Ozark).

“This bill authorizes vehicles used in the transportation of undocumented tobacco products to be confiscated by law enforcement officers and sold at public auction,” Clouse wrote. “This could increase receipts to: (1) county general funds of counties in which a sale is made, by an undetermined amount dependent upon the cost to sell confiscated vehicle, less the costs of repair, towing, and storage; or (2) the municipal general fund, if the municipality is a Class 2 municipality that owns and operates an impound facility and the cost to sell the vehicle at public auction.

“Also, this bill as introduced could increase receipts to the State General Fund and municipal general funds from fines; increase receipts to the State General Fund, county general funds, municipal general funds, and other funds to which court costs are deposited; and could increase the obligations of the State General Fund, local jails, the district attorneys, the Department of Corrections, community corrections programs, and the Bureau of Pardons and Paroles by an undetermined amount dependent upon the number of persons failing to obtain a tobacco permit or transporter permit and failing to provide proof of destination, that are charged with and convicted of the offenses provided by this bill and the penalties imposed,” Clouse wrote.

The House of Representative's clerks verified that the two bills are identical and then the members of the House voted to substitute the House bill with the bill that has already passed the Senate.

The House voted to pass SB216 by a vote of 99 to 0. The legislation now goes to Gov. Ivey’s desk for her consideration.

Tuesday will be Day 27 of the 2022 Alabama Regular Legislative Session. There are, at most, four days left in the regular session.

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