House Bill 2674 - Tobacco Tax Summary

• Amends Arizona's tobacco tax laws to implement the federal Master Settlement Agreement and enforce compliance with nonparticipating tobacco manufacturers through licensing, reporting, and certification requirements for distributors.

• Requires tobacco product distributors to obtain licenses listing all places of business, with fees of $25 per location, and prohibits unstamped cigarettes and untaxed tobacco products from being held or transported in vehicles except by licensed distributors.

• Establishes a directory of approved cigarette brands and manufacturers maintained by the Attorney General, prohibiting sale or stamping of cigarettes from manufacturers not listed in the directory and creating civil penalties up to 500% of retail value for violations.

• Modifies cigarette stamp discount rates to 96% of face value after September 30, 2014, requires electronic filing and payment of tobacco taxes by distributors beginning July 1, 2015, and expands the Department of Revenue's authority to disclose confidential tobacco tax information to the Attorney General for enforcement purposes.

• Creates new requirements for nonparticipating manufacturers to make quarterly escrow deposits, post bonds, and maintain detailed records; allows tribes to enter into agreements with the state for coordinated tobacco tax administration on Indian reservations.